By Alfred and John Donovan
14 November 2007
The Shell Group Managing Directors present at the CMD Meeting held on 9 December 2003 included Philip Watts, Jeroen van der Veer, Walter van de Vijver, Malcolm Brinded, Judy Boynton and Rob Routs.
Every page of the minutes was marked “MOST CONFIDENTIAL” because the discussions covered Shell’s commercially sensitive plans and one potentially explosive subject, Shell hydrocarbon reserves. We will comment on just a few issues.
Gazprom will be interested in Item 9, GAZPROM ALLIANCE – STATUS AND WAY FORWARD
With hindsight, Shell should have accepted the proposal being offered by Gazprom at the time. Instead the minutes record that “an impasse had been reached over the Gazprom aspired shareholding in Sakhalin II. The Gazprom position was that they aspired to 20% whereas Shell’s aspiration was for 5-10%.” The also “Committee” still had reservations over Gazprom. However, with our help, Gazprom ended up with the majority stake holding and Shell became the humiliated junior partner.
Item 10: PROJECT ROCKFORD
Phil Watts already knew that the game was up and the reserves fraud was sure to become public knowledge very shortly. Knowing that the minutes of the CMD meeting were bound to come under scrutiny, they record that: “The Chairman stressed the importance of full disclosure and transparency of the facts and thorough legal analysis. Urgent attention was required as time was of the essence.” This was after being involved in a long term cover-up of the truth, as confirmed by incriminating email.
Item 13: Malcolm Brinded (‘him with all the aspirational targets’) said the Qatar project should be accepted although the VIR was too low, because of strategic reasons…. We understand that many years ago, Hub van Engelshoven (former head of EP and one of the Shell greats) during his farewell tour gave many speeches. In one of the speeches he told the story that some people had asked him ‘Hub, what is your strategy?’ Upon which he remarked ‘I have no strategy, strategy is an excuse to waste money’…. But Hub was from a different era. They were led by van Wachem and unlike Brinded, who puts profits first, even before employee safety, van Wachem abided by the Group Business Principles.
Another important confidential document will be published tomorrow.