Forbes.com: Nigeria says Shell cut 1.9 bln bbls of its reserves

Reuters, 01.04.04,

By Jonathan Leff

VIENNA, April 1 (Reuters) - Royal Dutch/Shell's oil reserves in Nigeria have fallen by 1.9 billion barrels as part of its shock cut this year, more than earlier thought, the country's top energy official said on Thursday.

Nigerian Presidential Adviser on Petroleum Edmund Daukoru told reporters on Thursday that the move, earlier believed to have affected only 1.3 billion barrels in Nigeria, has reduced the country's reserves by 1.9 billion barrels.

"The Shell figure means that Nigeria's total reserves are down by six percent, which is considered to be within the margin of error," he said in a briefing after an OPEC meeting.

Nigeria's national reserves have fallen from 33 billion barrels to around 31 billion barrels as a result, he said.

Daukoru had said in February that Nigeria accounted for about a third -- or 1.3 billion barrels -- of Shell's global 3.9 billion barrel reduction to proven reserve estimates in January. In March, Shell made a second much smaller downgrade.

In Vienna, Daukoru reiterated that much of the reserve downgrade was due to oil trapped under gas caps, which are expected to be exploited but have not yet been approved.

"Because the gas cap development has not progressed to the FID (final investment decision) stage...the oil that was to be developed in association with that has not been booked," he said.

Shell accounts for about 40 percent of Nigeria's more than 2.3 million barrels per day of production and is set this year to bring onstream the country's biggest offshore oil project yet, Bonga.

Daukoru, a former group managing director for Shell Nigeria, also said he was satisfied with Shell's explanation of the reserve downgrade to the government.