Royal Dutch/Shell Group on Wednesday announced a $150 million increase in the amount of money it will spend in 2004 on exploration and production in Europe, bringing the total to $1.8 billion.
In addition to Italy, Ireland, Germany and Austria, Shell's European region includes the North Sea, which is made up of Britain, Denmark, Netherlands and Norway. Despite recent concerns in the oil industry of declining production in the North Sea, Shell said it remains a strategic heartland for the company.
"We have invested around 8 billion pounds ($14.3 billion) in technology, manpower and infrastructure in the past 10 years," said Tom Botts, Shell's chief executive officer of European exploration and production. "We are not going to walk away from that investment.", writes Seattle Post.
Shell shocked investors earlier this year when it admitted that it had overstated its reserves, wiping Ј2.9 billion off Shell Trading & Transport’s market capitalisation in one day. The sensation cost three executives their jobs, including former chairman Sir Philip Watts, amid allegations the issue had been covered up in the boardroom for two years.
The biggest "recategorisation" of its proven reserves came on 9 January, when it said that it had overstated its estimates from 1998 through 2002 by 3.9 billion barrels. Three smaller revisions followed, reducing the major’s proven reserves by a further 570 million barrels.
The majority of the overstatements related to its projects in Nigeria and Australia. Even when Shell’s management first became aware of the discrepancies between its methods of calculating proven reserves with that of the SEC, it sought to avert the need to make an announcement to the market, informs Scotsman.
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