Shell’s reserve dropped by 1.972bn barrels of oil equivalent
Royal Dutch Shell (LON:RDSA) anticipates that it will have produced 75% of its current oil and gas reserves by 2030, and approximately 3% after 2040.
The oil giant also said in its Energy Transition Strategy that it will put forward a non-binding shareholder vote next month.
Taking production into account, Shell’s reserve dropped by 1.972bn barrels of oil equivalent (boe), during 2020, to 9.124bn boe by December 31.
The new level amounts to seven years worth of production, which is lower than many of its rivals.
Other major oil companies have seen their crude oil reserves plummet by 25% over the last few years. This will provide a challenge to the earning potential of Big Oil in the next few years, according to Citi.
A number of oil giants disclosed reduced reserves in their recent reports, also due to the 2020 oil price and oil demand collapse, which forced all of them to write off billions of dollars off the value of assets.
In Shell’s case, the declining reserves life is not in contradiction to its assessment from earlier this year that its oil production peaked in 2019 and is set for a continual decline over the next three decades.