Very usefull links


News links




Dow Jones

Oil price



Views and News





As reserves life shrinks, Shell does not see a risk of "stranded assets"


By Dmitry Zhdannikov

Petroleumworld 04 13 2018

Royal Dutch Shell said on Thursday it saw little risk of having “stranded assets” in its portfolio as the world shifts to low carbon energy because the oil major will have four-fifths of its current oil and gas reserves extracted before 2030 anyway.

Shell has one of the lowest reserves life ratio among its peers and last year it saw reserves plunging to new lows after divesting a large number of assets.

The major now sits on 12.2 billion barrels of oil equivalent, down from 13.2 billion at the end of 2016, and enough to sustain the current annual production of 1.383 billion barrels for less than nine years.

Reserves life has long been one of the key metrics monitored by investors to assess oil firms' future resilience.

Long reserve life was especially important during years when oil was seen as a finite asset and analysts predominantly believed in the theory of “peak oil”, suggesting the world will soon run out of good oil reserves.

But as the United States, the world's largest oil consumer, discovered at the start of this decade it had abundant reserves of shale oil and as demand patterns also began to shift toward greener energy, the “peak oil” theory faded.

Instead it was replaced by a “peak demand” theory suggesting oil consumption will plateau and start declining soon due to electric vehicles, while large quantities of oil will not be produced and remain stranded under the ground.

In such circumstances, having a short reserve life arguably makes more strategic sense as it allows companies to adjust faster to quickly changing consumption patterns.

Shell said its assessments indicated “a low risk of stranded assets in the current portfolio”.

“As of 31 December 2017, Shell estimates that around 80 percent of its current proved oil and gas reserves will be produced by 2030, and only 20 percent after that time,” it said.

It said it was confident it would thrive through potential changes in the energy system to 2030 while growing new businesses to reduce costs and improve emissions.

“The company is expanding in the power market ... This includes investments in areas such as wind generation in the Netherlands, supplying power to retail customers in the UK and offering hydrogen refuelling and electric-car charging.”

“Longer term there is great uncertainty in how the energy transition will unfold, but Shell believes its strategic flexibility will allow it to adapt in step with society.”

Out of Shell's total proved reserves of 12.2 billion barrels, oil constitutes 4.6 billion, synthetic Canadian crude another 0.65 billion barrels while the rest is natural gas.

Shell has previously announced ambition to reduce net carbon footprint of the energy products it sells by around half by 2050.

The plan is fairly unique for the industry as it covers not only emissions from the production of energy products, but also those from the consumption of Shell's products by its customers.

Hit your target - Advertise with us

Story by Dmitry Zhdannikov; Editing by David Evans from Reuters. 04 12 2018

We invite all our readers to share with us
their views and comments about this article.
Write to

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to:

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels






Editor & Publisher:Elio Ohep/
Contact Email:

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld ™  / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.