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‘YOU CAN BE SURE OF SHELL’: The biggest confidence trick in history

By John Donovan

Many people fondly remember the advertising slogan…

“You can be Sure of Shell”

The legendary crooner, Bing Crosby, sung the praises of Shell in the 1950’s.

MICHAEL HOLIDAY VERSION

httpv://www.youtube.com/watch?v=1IdhOXh_g7s

Our research indicates that the slogan

“YOU CAN BE SURE OF SHELL”…

was first used in Great Britain by Shell in 1937 (right) months after the forced resignation of Sir Henri Deterding, the man most responsible for the creation and global success of the Royal Dutch Shell Group.

Sir Henri in his latter years as the undisputed strong man ruler of Royal Dutch Shell, had become a fascist and an ardent Nazi, who provided massive financial support to his friend Adolf Hitler and the Nazi party. The relationship and the financial support for the Nazis generated negative publicity for Shell.

We assume that the “YOU CAN BE SURE OF SHELL” slogan was designed to rebuild confidence in the company and its products and was no doubt directed at consumers and potential investors.

Fortunately, we have a comprehensive explanation from a Shell Chairman, Mark Moody-Stuart. It is in the form of a letter from him published by The Guardian newspaper on 2nd December 1997.

As can be seen, basically the slogan was meant to get across the message that Shell now has principles that it will not sacrifice to profit. It supposedly respects human rights and is trustworthy because it follows an ethical framework.

His illuminating letter, partly the product of the Shell PR propaganda department, was in response to a truly extraordinary indictment of the oil giant, in a Guardian article:

Unlovable Shell: The Goddess of Oil

Reference was made in the article to Shell’s double-dealings (secret negotiations) with Hitler and the Nazis, a relationship which continued long after the resignation of Sir Henri Deterding as Director-General of Royal Dutch Dutch.

Ironically, the Moody-Stuart letter was published at the time when Shell so-called “value creation teams”, were already engaged in activities leading to the falsification of Shell’s oil and gas reserves and one of the biggest investor frauds in history.

I assume that the regret for what was done “in a different historical or social context” was a reference to the historical fact that Shell conspired directly with Hitler, heavily financed the Nazi Party, was at times anti-Semitic and sold out its own Dutch Jewish employees to the Nazis.

At the time the slogan was introduced in 1937, Shell was already in bed with Hitler and the Nazi Party. Royal Dutch Shell Director General, Sir Henri Deterding, had a very close relationship with Hitler. There was a report in a gossip column that his wife, Lady Lydia, had an even closer relationship with Hitler.

Hitler’s special envoy, Dr. Alfred Rosenberg, known as “Hitler’s mouthpiece” was a house guest of Deterding in the UK.

Deterding later spent 4 days as Hitlers guest at Berchtesgaden.

Deterding and Shell gave huge financial support to Nazi Germany while Deterding was a director of Royal Dutch Shell.

It was said: “Deterding Orders-Hitler acts”.

Some of this happened in 1937, the year the “YOU CAN BE SURE OF SHELL” advertising campaign was launched.

Shell was stabbing Great Britain in the back, dealing with and funding the most evil regime in history, while treacherously pretending that Shell could be trusted by the British public.

It was for good reason that a deputy of Hitler stepped forward at Deterding’s funeral in 1939 and placed a wreath at his grave which said: ” In the name of Adolf Hitler, I greet you, Henri Deterding, the great friend of the Germans.”

It’s about time that Shell issued a full formal apology for its past corporate sins, which contributed to the horrific deaths of millions of people, instead of including an apology for unspecified misdeeds within a carefully contrived letter attempting to defend the indefensible.

No wonder Shell has ceased using the slogan.

Earlier this month, Royal Dutch Shell threatened legal proceedings against us in relation to these matters.

EMAIL FROM MICHIEL BRANDJES, 3 MARCH 2011

From: [email protected]
Date: 3 March 2011 09:02:21 GMT
To: [email protected]
Subject: RE: A HISTORY OF ROYAL DUTCH SHELL

Dear Mr Donovan,

Thank you for your message. Except for this message the company does not wish to respond to you other than to convey that it strongly disagrees with your views and allegations, objects to your actions and reserves its legal rights, including with respect to copyrights.

On an exceptional basis we tested your views about history with the relevant historians. They convincingly refute with evidence what you claim in contradiction with A History of Royal Dutch Shell.

Best Regards,
Michiel Brandjes
Company Secretary and General Counsel Corporate
Royal Dutch Shell plc

Registered office: Shell Centre London SE1 7NA UK
Place of registration and number: England 4366849
Correspondence address: PO Box 162, 2501 AN  The Hague,
The Netherlands

I pointed out in my response that Shell’s paid historians provided not a single example of any factual inaccuracy. Furthermore, as I correctly predicted, no legal action has been taken. This is most definitely not a subject that Shell wants aired in open court, as the evidence confirms our published conclusion that Shell is the most evil multinational corporation in existence.

And history repeats itself.

In recent days we have seen the latest reincarnation of a ruthless Shell leader, Peter Voser (who made thousands of Shell employees reapply for their own jobs), defend Shell’s dealings with the latest reincarnation of a ruthless dictator, Gaddafi.

ENDS

COMMENT ADDED ON 1 APRIL 2011 FROM IAIN PERCIVAL, RETIRED GLOBAL CHIEF PETROLEUM ENGINEER OF SHELL INTERNATIONAL (Iain retired from Shell in 2006 after 33 years of service.)

John – in your posting dated 31 March 2011 “You can be sure of Shell – the biggest confidence trick in history”, you wrote

 

when Shell so-called “value creation teams”, were already engaged in activities leading to the falsification of Shell’s oil and gas reserves and one of the biggest investor frauds in history.

 

I wish to correct any impression the team members were in any way conducting themselves in any other way than as competent, dedicated technical professionals conducing a root and branch examination of the huge volume of hydrocarbons in Shell’s resource portfolio categorized as “Scope for Recovery”. The aim of the exercise was to identify activities & projects which could (I emphasise the word could) lead to booking volumes of hydrocarbons as “Expectation” volumes, not proved, and only if there was a reasonable level of certainty the projects would go ahead. The outcome of the Value Creation initiative was a complete change in the way the company goes about generating hydrocarbon development concepts, designing and executing well programmes, defining and executing major engineering projects and optimizing the way facilities are operated and maintained. The current suite of E&P Global Processes, operating standards, learning & development programmes, best practice sharing / knowledge management owe their existence to the pioneering work conducted by the Shell technical professionals who worked in the Value Creation Teams.

 

The implication that the Value Creation work led to the falsification of hydrocarbon reserves and investor fraud is false. The work has led to value generation for investors in Shell resulting from increased efficiency in the use of capital and increased effectiveness of the technical staff in their daily work.

 

I remain immensely proud to have been associated with the value creation effort and the implementation of the subsequent changes to how we did our work.

 

Kind regards,

 

Iain Percival

COMMENT ENDS

REPLY BY JOHN DONOVAN

I have supplied below some information from independent sources on the issue raised by Iain Percival.

CLICK ON THIS LINK TO READ FINANCIAL SERVICES AUTHORITY REPORT ON SHELL RESERVES SCANDAL: http://www.fsa.gov.uk/pubs/final/shell_24aug04.pdf (August 2004 – £17 MILLION FINE FOR “MARKET ABUSE”)

EXTRACT

Paragraph 5.

In 1998 Shell created five Value Creation Teams (‘VCTs”) to find radical new ways to improve Shell’s Exploration and Production business (“EP”) profitability and reputation and hence aid growth in the EP business. One VCT was tasked with creating the maximum value from Shell’s hydrocarbon reserves. A paper dated May 1998 entitled “Creating value through Entrepreneurial Management of Hydrocarbon Resource Values” made a number of recommendations including changing Shell’s reserves guidelines. On 16 September 1998 the revised guidelines were issued to Shell’s operating units. These revised guidelines resulted in an overstatement of Shell’s proved reserves of 940 million boe for the two years ended 31 December 1999.

Below is a link to the “REPORT OF DAVIS POLK & WARDELL TO THE SHELL GROUP AUDIT COMMITTEE: EXECUTIVE SUMMARY” dated 31 March 2004. Every page of the 202 page report is marked “HIGHLY CONFIDENTIAL”

I invite readers to download the report and run a search on “value creation team” and read the information on the related ten pages.  I will provide a few extracts here, but recommend that the entire 10 pages are read so the information can be seen in context.

From page 32 (or Court numbering – page 52 of 202)

The Value Creation Team prepared a report for EP BusCom that was widely distributed within EP entitled “Creating Value through Entrepreneurial Management of Hydrocarbon Resource Volumes.”

From pages 45 & 46 (Using Court numbering – pages 66 and 67 of 202)

In 1998 and 1999, a diagram known as the “cascade model” developed by the Value Creation Team appeared in the Guidelines. The”cascade model” illustrated the “migration of volumes between resource categories during the development life cycle.” In the diagram, “undeveloped reserves” appeared before “final investment decision” or FID (although the diagram does not make clear whether these volumes include proved undeveloped reserves).

Beginning in 1993, the Guidelines also introduced the concept of “commercial viability” (or later,”commercial maturity”) as a counterpart to technical maturity. As explained in the 1996 Guidelines, commercial viability implied that the project would yield an expected positive net present value (NPV) based on “advised Group reference criteria for commerciality.” Such viability was adequate for the inclusion of “reserves,” even though a more robust demonstration of “economic viability” (i.e., positive NPV under a number of technical risk downside scenarios) was necessary to obtain investment approval. In other words, it appears that the Guidelines permitted the booking of reserves (whether proved or expectation) with respect to projects that would not survive the Group’s capital allocation process, again a result that appears to fall short of “reasonable certainty.”

Pages 7 & 8 (or Court numbering – 86 & 87 of 202)

C.    Revisions to the Shell Guidelines – “Volume Value Creation Team”

In each of 1997 and 1998, Shell’s RRR performance significantly exceeded 100%. During these years Shell’s proved reserves were significantly boosted, not by exploration and development activity, but rather by significant modification to Shell’s methodologies for booking proved developed reserves. This change was at least partly the result of a review that was conducted under the auspices of a “Hydrocarbon Resource Volume Value Creation Team” (the “Value Creation Team”) within EP that was, in turn, established as part of Shell’s Leadership and Performance “LEAP” Focused Results Delivery Project. Similar to the relaxation in standards for booking proved gas reserves in 1990, this initiative was driven by the perception that Shell’s approach to booking proved developed reserves was more conservative than its competitors’, and that Shell’s reserves were therefore not maximizing value.

Footnote of page 4  (or Court numbering page 83 of 202)

It should be noted that the main increases in proved reserves resulting from the Value Creation Team’s revised Guidelines in 1997/1998 (See Section II C, below) related to proved developed reserves.  Such proved developed reserves did not make up a significant portion of the reserves recategorization announced on January 9, 2004.

RELATED ARTICLE

THE NEW YORK TIMES: At Shell, New Accounting and Rosier Oil Outlook: 12 March 2004

Extract

 

The problems at Royal Dutch/Shell can be traced to the first half of the 1990’s, when executives and investors began to grow concerned that the group’s reserves were not keeping pace with production. Their concern led them in 1997 to instruct the leadership and performance group, known within the company as LEAP, to “create value through entrepreneurial management of hydrocarbon resource volumes,” according to one company document.

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