Shell reassures on oil and gas reserves

By Tom Bergin

LONDON (Reuters) - Royal Dutch Shell said its oil and gas reserves held stable in 2007 despite expectations of a drop, but told investors they may have to wait until 2010 to see production growth.

The world's second-largest non-government controlled oil company by market value on Monday put total net reserves at 11.9 billion barrels of oil equivalent (boe) at the end of 2007, in line with the level at the end of 2006, supporting its shares in a weak market.

"There's cause for more optimism ... the reserves seem like they're there," oil analyst Jason Kenney at financial group ING said.

Some feared the sale of part of its stake in the Sakhalin-2 project in Russia, after a Kremlin campaign of pressure, and writedowns in Nigeria would push reserves lower but new finds and acquisitions managed to make up for these losses.

Investors have been concerned about Shell's ability to add reserves since it said in 2004 that it had exaggerated its reserves by around a third.

Oil prices around $100 have made it hard for oil companies to add reserves as resource-holding nations, flush with cash, increasingly keep their best oil and gas fields for their state oil companies.

Shell's larger rival, Exxon Mobil, and industry number three, London-based BP, also only managed to hold reserves stable in 2007.

Industry number four, France's Total, had a 6 percent drop while Chevron, the fifth of the super majors, as the top tier of the industry are called, had a 7 percent fall.