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Posts from ‘July, 2004’

JULY 2004 ROYAL DUTCH SHELL NEWS

The Guardian: British watchdog catches up with US hare

The Guardian: British watchdog catches up with US hare

“Shell faces the prospect of a string of civil actions from shareholders who feel duped.”

Shell case is a rare example of the FSA applying American-style rapid justice – but why the transatlantic gulf in size of fines?

Edmond Warner

Saturday July 31, 2004

It is not just burgers, buildings and election advertising budgets that are bigger in the United States, it seems. The same is true of fines meted out by financial regulators, and regulatory justice gets administered much more swiftly, too. Those on the receiving end of these fast-track punishment beatings can console themselves that their wounds will be more superficial and swifter to heal than in Britain’s tortuously slow system. read more

The Guardian: See Shell

The Guardian: See Shell

Ian Wylie

Saturday July 31, 2004

Many students try to makes themselves more attractive to employers by gaining work experience as well as a good degree. But oil giant Shell claims to offer two programmes that go beyond the average work placement.

In its Gourami Business Challenge, teams of undergraduates battle to develop a five-year business plan which will be presented to senior Shell leaders. The game, says Shell, allows students to gain first-hand knowledge about the energy business, test their management potential and develop valuable skills along the way. At the end of the challenge, successful students are invited to a Shell recruitment day when the Gourami performance will contribute to the overall evaluation. read more

New Zealand City: Fuel price hike expected says Shell

New Zealand City: Fuel price hike expected says Shell

Oil company not surprised production problems in Russia can drive up world fuel prices-expected to happen here too

31 July 2004

It is no surprise to one major oil company that production problems in Russia can drive up world fuel prices.

US light crude has hit a new all-time high, closing at $US43.80 a barrel. The price is tipped to hit $US45 soon.

Shell spokesman Simon King says a range of international events can affect world prices.

He says events in the Middle East can affect it as well as disruption to supplies in Russia. read more

UK Market Regulator Earns Stripes With Shell Fine

The Wall Street Journal: UK Market Regulator Earns Stripes With Shell Fine

“”The Shell case, by raising the stakes so dramatically for the FSA, is kind of another way of rattling the handcuffs.”

By JACK GRONE

Of DOW JONES NEWSWIRES

July 30, 2004 11:07 a.m.

Posted 31 July 04

LONDON — The U.K.’s Financial Services Authority has hit the big time.

By slapping Royal Dutch/Shell Group (RD, SC) with a GBP17 million fine Thursday over the company’s misreporting of its oil and gas reserves earlier this year, the FSA did little damage to the oil giant’s bottom line.

But the penalty, announced alongside a bigger fine that Shell will pay to the U.S. Securities and Exchange Commission, should send a clear warning to the broader market, observers said. read more

Shell Transport And Trading Buys Back 2M Shares

The Wall Street Journal: Shell Transport And Trading Buys Back 2M Shares read more

Shell SEC Deal Fails To Solve Governance Issues – Lawyer

The Wall Street Journal: Shell SEC Deal Fails To Solve Governance Issues – Lawyer

“accuses executives and board members of numerous wrongdoings – including breach of fiduciary duty and fraud”

DOW JONES NEWSWIRES

July 30, 2004 5:27 a.m.

Posted 31 July 04

LONDON — Royal Dutch/Shell Group’s (RD, SC) agreement to pay a fine to the U.S. Securities and Exchange Commission over the company’s reserves overstatements fails to correct corporate governance flaws, the attorney for two large U.S. institutional shareholder groups said Thursday.

“The fine is the exact type of damage to the company that should be paid by the defaulting executives or board members,” Bill Lerach, a partner at the San Diego-based law firm Lerach Coughlin Stoia & Robbins, said in a statement. read more

Moody’s Cuts Deer Park Refining L-T Rating To A2

The Wall Street Journal: Moody’s Cuts Deer Park Refining L-T Rating To A2

“The long-term rating downgrade primarily reflects the impact of Moody’s downgrade in May 2004 of Deer Park’s 50% owner, Shell Oil Company”

DOW JONES NEWSWIRES

July 30, 2004 5:48 p.m.

Posted 31 July 04

The following is a press release from Moody’s Investors Service:

New York, July 30, 2004 — Moody’s Investors Service downgraded Deer Park Refining L.P.’s (Deer Park) long-term debt to A2 from A1 and confirmed the company’s Prime-1 commercial paper rating. The rating outlook is stable. Deer Park is a refinery project joint-venture owned 50% by Shell Oil Company and 50% by P.M.I. Norteamerica, a subsidiary of Petroleo Mexicano (PEMEX, rated Baa1 foreign currency). It is financed on a non-recourse basis to its owners. The long-term rating downgrade primarily reflects the impact of Moody’s downgrade in May 2004 of Deer Park’s 50% owner, Shell Oil Company to Aa2 from Aa1. read more

Moody’s Cuts Motiva Enterprises L-T Debt To A2

The Wall Street Journal: Moody’s Cuts Motiva Enterprises L-T Debt To A2

“The long-term rating downgrade primarily reflects the impact of Moody’s downgrade in May 2004 of Motiva’s 50% owner, Shell Oil”

DOW JONES NEWSWIRES

July 30, 2004 4:44 p.m.

Posted 31 July 04

The following is a press release from Moody’s Investors Service:

New York, July 30, 2004 — Moody’s Investors Service downgraded Motiva Enterprises LLC’s long-term debt to A2 from A1 and confirmed the company’s Prime-1 commercial paper rating. The rating outlook is stable. Motiva Enterprises is a refining and marketing joint-venture owned 50% by Shell Oil Company (Aa2, stable) and 50% by Saudi Refining Inc. (not rated). Motiva is financed on a non-recourse basis to its owners. The long-term rating downgrade primarily reflects the impact of Moody’s downgrade in May 2004 of Motiva’s 50% owner, Shell Oil Company, to Aa2 from Aa1. read more

Moody’s Confirms Aa1 Ratings Of Royal Dutch Shell Entities

The Wall Street Journal: Moody’s Confirms Aa1 Ratings Of Royal Dutch Shell Entities

“the negative outlook reflects uncertainties”: “Another factor implicit in the negative outlook”

DOW JONES NEWSWIRES

Posted 31 July 04

The following is a press release from Moody’s Investors Service:

New York, July 30, 2004 — Moody’s Investors Service confirmed the Aa1 long-term debt ratings of the guaranteed subsidiaries of the Royal Dutch/Shell Group of companies with a negative outlook. Ratings confirmed included the Aa1 long-term securities of Shell Finance (Netherlands) B.V. and Shell Finance (U.K) PLC. The Prime-1 guaranteed commercial paper ratings of both entities were not under review and are affirmed. At the same time, Moody’s confirmed the Aa2 Issuer Rating and certain IRBs of Shell Oil Company and the A1 preferred stock of Shell Frontier Oil & Gas, both with a stable outlook. The Issuer Rating of Coral Energy Holding, L.P. was downgraded to A2 from A1, also with a stable outlook maintained. read more

The Guardian: A slap on the wrist for Shell

The Guardian: A slap on the wrist for Shell

“Nor can it yet draw a line under the costs of the affair. That lies with the US justice department and the American courts.”

Reserves fine won’t dent bottom line

Friday July 30, 2004

Posted 31 July 2004

The $120m it cost Royal Dutch/ Shell to settle with the securities and exchange commission over the reserves scandal sounds a lot. Even the significantly more modest £17m slapped on by the Financial Services Authority dwarfs the previous record fine (£4m) imposed by the British regulator. But when a company is the world’s third-largest oil company, will it really notice fines on this scale?

Not surprisingly, Royal Dutch/Shell says it will. “Eye watering” was the term used by one executive yesterday. But pause a moment. A quick back-of-the-envelope calculation shows the fines equate to less than four days of the group’s second-quarter net income of $4bn. read more

The Guardian: Shell fined £84m over reserves scandal

The Guardian: Shell fined £84m over reserves scandal

“Shell is facing a criminal investigation by the US department of justice, ongoing inquiries by the Dutch financial market regulator and the Euronext stock exchange as well as litigation in the US”

Mark Milner

Friday July 30, 2004

Posted 31 July 2004

Royal Dutch/Shell said yesterday it had agreed in principle to pay £83.6m in fines to regulators in Britain and the US to settle investigations into the oil reserves scandal that broke this year.

News of the fines came alongside results from Shell which showed higher oil prices helped the group to earn net income of $4bn (£2.2bn) in the second quarter.

Shell said it would pay $120m to the securities and exchange commission for breaches of SEC rules and US laws, and £17m to the Financial Services Authority under UK market abuse provisions. The British fine is the largest imposed by the FSA and more than four times the previous record. Shell promised the SEC it would spend another $5m on bolstering internal compliance procedures. read more

Shell fighter begins the big clean-up

Financial Times: Shell fighter begins the big clean-up

“it could itself become a bid target”; “if you get it hopelessly wrong, then people start sniffing around.”: “In answer to a question about whether they are sniffing now, he said: “You will have to ask the sniffers.”

By Deborah Hargreaves

Jul 30, 2004

Jeroen van der Veer, chairman of the committee of managing directors at Royal Dutch/Shell, has just completed the most bruising episode of his 33-year career at the Anglo-Dutch oil company.

He was appointed to the top post in March to clear up the mess left after the company downgraded its proved reserves by 20 per cent – a debacle that led to the departure of three executives, including Sir Philip Watts, his predecessor.

Mr van der Veer is now fighting on all fronts to put the reserves issue behind him and draft a future for Shell in which it clarifies its complex governance structures, opens itself up to the outside world and focuses on building the business. But he still has a long way to go to convince shareholders that the company has taken the issues seriously enough. read more

Settling the bill but not the issues

FT: Settling the bill but not the issues

“companies also tend to look to their more reputable peers, of which Shell used to be one. This is no longer the case.”: “whether a management that lied to its biggest shareholders would have any compunction doing the same to Nigerian villagers.”

Published: July 30 2004 5:00 | Last Updated: July 30 2004 5:00

Part of the bill came in yesterday for Royal Dutch/Shell’s misreporting of its reserves. The Anglo-Dutch oil group said it would pay £17m to settle the UK Financial Services Authority’s charge of market abuse, and $120m (£65.8m) to settle wider charges by the US Securities and Exchange Commission, including breaking anti-fraud and reporting rules. Two US regulatory bodies also announced fines of $38m on Coral Energy, a Shell subsidiary, to settle charges of manipulating gas and electricity prices in the US. By paying the fines, Shell has been able to get these investigations closed without having to admit any wrongdoing. read more

Shell files revised statement with SEC

FT: Shell files revised statement with SEC

The revision was necessary because of the Dutch-UK oil and gas group’s serial restatements of proved reserves earlier this year.

By Clay Harris

Published: July 3 2004 5:00 | Last Updated: July 3 2004 5:00

Royal Dutch/Shell late yesterday filed its revised 20-F financial statement for 2002 with the US Securities and Exchange Commission.

The revision was necessary because of the Dutch-UK oil and gas group’s serial restatements of proved reserves earlier this year. Shell downgraded its proven reserves by 4.47bn barrels, or 23 per cent, in four separate revisions starting in January.

The 20-F statement for 2003 was filed earlier in the week. Shell said last night that all of the financial impact of the new SEC filings had been reflected in its 2003 annual report published in late May. read more

An ocean of difference across the Atlantic

FT: An ocean of difference across the Atlantic

“It still faces a regulatory inquiry in the Netherlands, potential criminal investigation by the US Justice Department and myriad class action suits. They form a pretty powerful deterrent against following Shell’s abuse of the markets.”

By Martin Dickson

Published: July 30 2004 5:00 | Last Updated: July 30 2004 5:00

Gas guzzling cars; meal portions that would quell a giant’s hunger; tough fines by financial regulators. Is everything bigger and better in the US than the UK?

You might think so on the basis of yesterday’s news that Royal Dutch/ Shell is to pay a £17m penalty in the UK for its reserves accounting scandal, while it will pay $120m (£66m) in the US to settle with the Securities and Exchange Commission. Are the different punishments on the two sides of the Atlantic explicable and appropriate to the offence? read more

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