ExxonMobil Corp. said Friday that it added 1.8 billion boe of oil and gas reserves in 2004, which beat its 2003 additions of 1.7 billion boe. Last year reserves replaced 112% of its production, compared to 2003 when its production replacement rate was 105%. The company reported 22.2 billion boe of total proved reserves at the end of 2004.

“This represents the eleventh consecutive year of greater than 100% reserve replacement, demonstrating the outstanding capability of our upstream organization and the corporation’s commitment to long-term growth,” said CEO Lee Raymond.

However, the new guidelines from the Securities and Exchange Commission require the company to measure reserves utilizing Dec. 31, 2004 liquids and natural gas prices. This results in a reserves addition of only 1.3 billion boe in 2004 and a reserve replacement ratio of only 83%, ExxonMobil said.

The company disputed this new reserves calculation methodology. “The use of prices from a single date is not relevant to the investment decisions made by the corporation, and annual variations in reserves based on such year-end prices are not of consequence in how the business is actually managed,” ExxonMobil said.

It said the SEC’s new guidelines resulted in a misleading calculation. “The most significant single impact of employing Dec. 31 prices occurred for the Cold Lake field (heavy oil-bitumen steam project in Canada), where approximately 0.5 billion barrels were removed from the proved category while still remaining part of our total resource base. Prices for Cold Lake were strong for most of 2004. However, on the day of Dec. 31, 2004, prices were unusually low due to seasonally depressed asphalt sales and industry upgrader problems in Western Canada. Prices quickly rebounded from Dec. 31, and through January 2005, returned to levels that have restored the reserves to the proved category,” the company said.

ExxonMobil said the bulk of its proved reserves came from Qatar, where it is developing a massive natural gas liquefaction project with Qatar Petroleum. It made proved reserve additions in Qatar totaled 1.7 billion boe. “ExxonMobil’s commitment of capital to this growing LNG business, which is underpinned by our confidence in the demand for gas and the liquidity of our targeted gas markets, has been the subject of several press announcements during 2004,” the company noted.

Proved additions were also made in West Africa from developments in Nigeria, Equatorial Guinea and Angola and from new developments and established operations in Europe and the Caspian region.

Production totaled 1.6 billion boe in 2004. Liquids production was 935 million bbl, and natural gas production totaled 3.9 Tcf.

For total resources, ExxonMobil said it added 2.9 billion net boe from new fields in 2004 to its resource base, which it estimates at 73 billion boe, including proved reserves and other discovered resources that will likely be developed.

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