March 17 (Bloomberg) -- Royal Dutch Shell Plc, Europe's biggest producer, relied on the enlargement of its share of a Canadian oil sands project to offset the loss of half its oil and gas reserves in Russia's Sakhalin-2 venture.
Shell's total proved oil and gas reserves plus minable oil sands reserves declined 0.2 percent in 2007 to the equivalent of 11.92 billion barrels of oil, from 11.94 billion barrels in 2006, the company said in a strategy statement and annual report today.
Shell ceded half of its 55 percent stake in Russia's Sakhalin- 2 venture in April, losing the equivalent of 402 million barrels of oil in proven reserves, the report showed.
This was mainly offset by the acquisition of the 22 percent interest in Shell Canada that was previously held by minority stakeholders. That added the equivalent of 322 million barrels of reserves, mostly oil sands, to Shell's total.
Total proven reserves are calculated as the oil, gas and minable oil sands reserves run by Shell companies, except the portion owned by minority stakeholders, plus Shell's equity interests in other companies' projects.
In April last year, Shell completed the C$8.7 billion ($7.7 billion) takeover of the 22 percent of Shell Canada it didn't already own. In doing so, the minority interests of 72 million barrels of proven oil and gas reserves plus 250 million barrels of oil sand reserves was added to the total attributable to Shell.
Shell and its Japanese partners last year sold Russia's state- controlled OAO Gazprom a controlling stake in the Sakhalin-2 oil and gas venture after Russia threatened to halt development because of environmental violations.
The Sakhalin-2 project is now carried as an equity-owned investment on Shell's books, rather than a Shell-run project. Gazprom now owns 50 percent stake of Sakhalin-2 and Shell 27.5 percent.
