BP plc revised downward its proved oil and gas reserves at the end of 2003 by 445 million boe, or 2.5%, according to information in its annual report, released earlier this month. The disclosure follows the controversy over the 20% negative revision by Royal Dutch/Shell Group in January and El Paso Corp.’s 41% cut, which was announced last month.

However, BP noted in the report that its total reserves grew last year, up 4.4% to 18.34 billion boe from 17.57 billion boe at the end of 2002. Most of its growth came from acquisitions in Russia, new discoveries worldwide and other gains that offset the negative revision. A BP spokesman told the Wall Street Journal that the revision was “normal practice” and not prompted by regulatory requirements. The Securities and Exchange Commission launched a formal inquiry into Shell’s revisions last month (see Daily GPI, Feb. 20).

In 2001, BP cut 97 million bbl from its proved oil numbers, and in 2000, it added 112 million bbl. On the natural gas side, BP increased its reserves by 153.8 MMcf in 2002, and it downgraded its gas reserves by 125.2 MMcf in 2001.

According to the annual report, after taking into account production, reserve purchases, discoveries and improved recovery, BP’s direct subsidiaries’ oil reserves ended 2003 with a decline to 7.45 billion bbl from 7.76 billion bbl in 2002. Gas reserves on the same basis declined to the equivalent of 7.6 Bcf from 7.9 Bcf in 2002. Nearly all of the downward revisions in the oil reserves — and most of the gas reserves — were located in the United States, BP noted.

BP’s oil reserves in companies in which it has an equity interest jumped last year after taking a 50% stake in a large Russian joint venture, TNK-BP. These oil reserves more than doubled to 2.88 billion bbl at the end of 2003 from 1.40 billion bbl in 2002. However, sales of natural gas equity assets sent reserves in this category lower to the equivalent of 440 MMcf from 507 MMcf in 2002.

In 2003, BP said its reserve-replacement ratio was 122%, rising to 158% taking into account the stake in the Russian TNK-BP.

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.