By Carola Hoyos in London
Published: September 21 2006
The costs of finding additional reserves of oil and gas have soared, an industry study shows, adding to the malaise of international oil companies.
“Reserves replacement costs surged 73 per cent as increased capital spending did not translate into incremental reserve additions,” a study of 200 oil and gas companies found.
The world’s proved reserves of oil and gas rose just 2 per cent to 257.7bn barrels, while production increased 1 per cent to just shy of 19bn barrels, the authors of the study, John S. Herold, the Houston-based research company, and Harrison Lovegrove, the London advisers, found.
While development costs rose $37bn, or 30 per cent, to $159bn in 2005, they yielded just a 1 per cent increase in output.
“They are spending 30 per cent more just to stand still,” said Rodney Schmidt, managing director at Harrison Lovegrove. “The money has been there, but the barrels have not.”
Companies spent $36bn on exploration in 2005. That meant that in 2005 the industry as a whole spent more money producing that extra 1 per cent of oil and gas than it spent exploring for the reserves that will feed the world’s economic growth in the years and decades to come.
Part of the reason is that companies are denied access to most of the world’s biggest oil and gas fields. Instead, they are having to embark on ever more ambitious, risky and costly projects as nations rich in oil and gas, such as Mexico and Saudi Arabia, are keeping their doors closed to foreign investment.
Meanwhile, growing numbers of countries in which international oil companies operate are wresting back control over the projects. This week Russian authorities moved to halt work on Royal Dutch Shell’s Sakhalin II project by withdrawing an environmental permit.
Meanwhile, in Europe and the US in particular oil companies are coming under much scrutiny because of their surging revenues, which jumped 37 per cent to $699bn in 2005 for the 200 companies in the survey. But the companies’ costs are rising even faster, meaning that a fall in the oil price would put profit margins under serious pressure, analysts warned.
“Even if oil prices remain at prices we have seen recently, we expect pressure on margins,” said Mr Schmidt. “It matters to the shareholder ultimately as it puts dividends and share buybacks under pressure.”
Copyright The Financial Times Limited 2006
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Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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