Rosneft's Reserves Increased 2.8% in '08

03.03.2009 (13:01) | The Moscow Times

Rosneft's oil and gas reserves rose 2.8 percent in 2008 under PRMS rules, allowing the company to keep top position for oil reserves despite a fall under more stringent U.S. Securities and Exchange Commission methods.

State-controlled Rosneft said Monday that oil and gas reserves rose to 22.307 billion barrels of oil equivalent last year from 21.699 billion in 2007 under the Petroleum Resources Management System (PRMS) methodology, formerly known as SPE.

This brought its reserves replacement ratio to 172 percent under PRMS rules, Rosneft said in a statement.

Under the more stringent SEC methodology, Rosneft's reserves fell to 14.448 billion boe last year from 14.495 billion boe in 2007, a fall of 0.3 percent.

Rosneft did not give a replacement ratio to SEC standards. Denis Borisov, an analyst at Solid brokerage, estimated that the 2008 data brought the SEC reserves replacement ratio to 95 percent.

"SEC uses the year-end prices, while SPE is based on the average price for the year. That's why we have minus for SEC and plus for SPE," Borisov said.

The price for Russia's mainstay crude blend Urals fell to $41.8 per barrel by Dec. 31, from $91.3 at the end of 2007. The average Urals price was $95.1 per barrel in 2008, compared with $69.5 in 2007, Borisov said.

Analysts typically expect oil and gas firms to replace at least 100 percent of their annual production as a sign that they are able to maintain growth.

The sharp fall in spot prices at the end of 2008 was also responsible for TNK-BP, Russia's No. 3 oil firm, reporting on Friday an 82 percent reserves replacement ratio to SEC standards while recording a 146 percent ratio under PRMS rules.

Rosneft said its PRMS reserves included 17.694 billion boe of oil and 27.680 trillion cubic feet of gas as of Dec. 31. In 2007, the figures were 17.513 billion boe and 25.116 tcf, respectively.

Rosneft said its oil reserves replacement ratio was 123 percent in 2008.

Under the SEC classification, which takes into account reserves extractable during the life of companies' existing licenses, Rosneft's oil reserves fell to 13.275 billion boe from 13.365 billion boe in 2007 and gas reserves rose to 7.035 tcf from 6.780 tcf.

The reserves audit, performed by DeGolyer and MacNaughton, confirmed that Rosneft was first among public oil companies in terms of oil reserves, under both PRMS and SEC standards, the company said.

U.S. oil major Exxon Mobil said last month that it added 1.5 billion boe to its proved reserves in 2008. It gave neither a total figure for reserves nor separate figures for its oil and gas reserves in 2008.

In 2007, Exxon's total proved reserves were 22.7 billion boe under the SEC classification, and the firm said these were split almost evenly between liquids and gas.

Rosneft said its hydrocarbon reserve life was 26 years, 23 years for oil and 69 years for gas, under the PRMS rules.

Shares of Rosneft closed down 3.05 percent on the MICEX, outperforming the broader MICEX oil and gas index, which fell by 4.08 percent.

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