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World oil not running out but difficult to exploit – Shell

World oil and gas reserves will not run out in the near future, even though exploiting remaining reserves will become increasingly difficult, Royal Dutch Shell chief executive Jeroen van der Veer said last Tuesday.

Speaking at the company’s annual general meeting, Van der Veer said the majority of easily exploited resources were already in production. But the company had for years been working on exploiting other reserves, such as Canadian tar sands, Deutsche-Presse-Agentur (dpa) quoted him as saying.

Current high oil prices made these reserves viable, as well as exploiting reserves in inhospitable regions, like the east Russian Sachalin-II project. Higher investment was required in such projects, Van der Veer said, noting that Shell had announced in May that it was investing USD 19 billion. Van der Veer said that the Sachalin-II project, in which Shell has a majority stake, was now 70 percent ready. Shell expects to be producing oil and gas from the project by 2008.

Van der Veer acknowledged that Shell had underestimated the difficulties with Sachalin-II, but said the project remained an “attractive investment.” Meanwhile, Shell is thinking about using alternative sources to generate power in Russia, Graeme Sweeney, CEO of Shell Renewables, told reporters. Interfax quoted him as saying Shell doesn’t have any current plans, but is holding talks on what kinds of businesses to include in its asset portfolio in Russia.

He said that Duncan Macleod, Shell Hydrogen vice president, was expected to be in Moscow this week to discuss this issue. The possibility has appeared to use hydrogen considering Russia’s large coal reserves, Sweeney said. Big wind energy centres could also be built in Russia, he said.

Using renewable sources of energy will help create energy safety by diversifying sources of supply, Sweeney said. Renewable sources of energy only account for one percent of Shell’s portfolio. Shell used USD one billion on projects to develop renewable sources of energy over the past five years.

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