BP is preparing to downgrade up to 3 per cent of its oil reserves, according to investment bank Goldman Sachs.
One City analyst said: “This would be pretty embarrassing after everything Shell has been through.” There is no question of wrongdoing on BP’s part.
BP must file its annual report for the US regulator by the end of the month, stating its financial performance, including its oil and gas reserves, based on Securities & Exchange Commission (SEC) guidelines.
Unlike US oil majors and Anglo-Dutch rival Shell, when BP reports results, it books reserves based on a measure known as UK Statement of Recommended Practice (Sorp).
In the past, it has argued that there is no material difference between Sorp and SEC reporting requirements. But Goldman Sachs, which has close ties to BP, said that because of the intense scrutiny of reserves, following the Shell reserve misreporting scandal, BP “may be required to provide a detailed reconciliation” between the two measures.
Goldman Sachs said that, under Sorp, BP could show a higher reserve estimate than under the SEC system. It added that the company could downgrade reserves by up to 3 per cent. This would bring them down by 400 million barrels of oil, from 13.3 billion in total reserves.
BP declined to comment.
