Marketing Week: SHELL SMART LEGAL NOTICE

MUSAINT: The speed with which some projects take to get to first oil etc. because some rather poor project management skills in Shell, they should be OK as by then the oil price may have come back up again.

Visitor: Looks like Shell bet the farm on sustained high oil prices, while Exxon waited... How long can Shell survive with oil prices at ~$40/bbl? Many new projects were being screened at $50-$70/bbl prices. Increased prices will return, but with a deepening recession it may be a few years before we see $100/bbl again. In the meantime, where will the cash for the dividends, buybacks, and investments be found?

Guest: Ed Cooks of the FT paying compliments to Linda Crook...

Shell employee: Ed Crooks of the FT: who are your sources? Claiming Linda Cook is admired for her knowledge, I wonder which knowledge? She may have some dirt on many because she surely does not have great know-how on the business itself. She can smear many for the old Tejas Gas debacle. Believe me, she is the most senior 'token women' in the business world. And Brinded used to be a nice guy but the last few years he does not like anyone holding a different opinion. Those who do are removed swiftly. He has a huge brain but at the same time is the ultimate micromanager in the whole world. He also is a true believer of optimism and promising more than one can deliver. He has done so since his days as MD Expro. Never once did he meet his business targets... So, mr Crooks, better check your sources more carefully!

MUSAINT: At $30 - $50/bbl many deepwater projects are likely to be still profitable (even afetr the likes of Greedy Gordon & corrupt Nigerian officials have taken their cut). Others may wish to comment on the other "White Elephants" you mention. My humble view is that not all will be turkeys as the service industries / rigs / construction yards now have to drop their rates to reflect this present economic environment and thereby lower the break-even $ price.

Guest: It looks as though Brent is about to fall through $50... Tar Sands? GTL? Shale Oil? Deep Water? These might be long term investments, but in the short term they are "white elephants" - the days of record oil company profits are now behind us.

Guest: If Total has $15bn to spend on a friendly takeover, they should perhaps visit The Hague... with Shell's US liabilities now under control, and friendlier relations between France and the US, Total's historical concerns about such a move would seem to have been addressed...

Guest: It's noticeable that some of the large movements in Shell's share price over the past couple of weeks involve relatively small quantities of shares being traded - are Shell's repeated share buybacks being used to (mis) lead the market? With oil below $60 there will be far less free cash available for this kind of market manipulation.

Guest: Anyone who thinks that the euphemism "reclassification" somehow justifies the fraud that was perpetrated on the market should read the attachments to the depositions published on this site. The intention throughout was to paint a rosier picture of Shell's reserves in comparison with those of their competitors than could be justified by the facts (Shell's primary competitors had to work with SEC rules too). The fact that Shell provided incentives and bonuses to those who complied with Watts' directives, and suppressed the views of their own reserves auditors should be evidence enough. Walter vd Vijver summed it up when he said that he was "sick and tired of lying" Annual reports are supposed to be prepared according to a unified set of rules to allow comparisons to be made between companies. Deliberately inflating a company's asset base (whether its oil in the ground, widgets in the warehouse, or cash in the bank) is fraud.

John Donovan: There was a reserves scandal. It wasdescribed by the US SEC as a securities fraud. The fraud by Shell executive directors cost Shell around $850 million in fines by regulatory authorities, class action settlements, and legal costs of suing parties. Add on Shell's own legal costs and the whole bill would probably amount to over a billion USD. Of course this is not a major problem for an oil giant making obscene profits.