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10th ANNIVERSARY OF ROYAL DUTCH SHELL RESERVES SCANDAL

Since Royal Dutch Shell has apparently forgotten to mark the tenth anniversary of news breaking on 10 January 2004, that Shell had cooked its books by wildly inflating its claimed oil and gas reserves, it seems appropriate for me to do so on Shell’s behalf. The then Shell Group chairman, Sir Philip Watts was forced to resign, but to buy his silence was handsomely  rewarded for screwing Shell shareholders, receiving a financial package reportedly worth $18.5 million. He later repented his sins and became a priest. His chief of Exploration & Production, Walter van de Vijver was knifed in the back by his director colleagues, including John Hofmiester and Jeroen van der Veer, in what can fairly be described as a sadistic sacking. Plenty of scope and evidence if Martin Scorsese is planning a follow-up movie to The Wolf of Wall Street featuring another huge scam involving outlandish but real events and overpaid, ethically challenged individuals, driven by ego and unbridled greed.

By John Donovan

Screen Shot 2014-01-15 at 08.41.45Since Royal Dutch Shell has apparently forgotten to mark the tenth anniversary of news breaking on 10 January 2004, that Shell had cooked its books by wildly inflating its claimed oil and gas reserves, it seems appropriate for me to do so on Shell’s behalf.

The then Shell Group chairman, Sir Philip Watts was forced to resign, but to buy his silence was handsomely  rewarded for screwing Shell shareholders, receiving a financial package reportedly worth $18.5 million. He later repented his sins and became a priest. His chief of Exploration & Production, Walter van de Vijver was knifed in the back by his director colleagues, including John Hofmiester and Jeroen van der Veer, in what can fairly be described as a sadistic sacking.

Plenty of scope and evidence if Martin Scorsese is planning a follow-up movie to The Wolf of Wall Street featuring another huge scam involving outlandish but real events and overpaid, ethically challenged individuals driven by ego and unbridled greed.

A brief selection of headlines from the most dramatic day in the history of Royal Dutch Shell:

The Times: How Shell blew a hole in a 100-year reputation

Daily Telegraph: Shell drops ‘bombshell’ on reserves

The Independent: Reserves shock wipes £8bn from value of oil giant Shell

The Guardian: Sir Philip ducks out as Shell cuts its reserves

The scandal was subsequently described in the BBC TV Money Programme as the biggest investor fraud in history.

Extracts from a transcript:

Introduction: One of the world’s oldest and biggest companies is engulfed in scandals… its tarnished the reputation of British business

Unidentified Shell shareholder interviewed at Shell Transport London AGM: “the board should be fired”

The oil giant Shell has been forced to admit that it exaggerated the amount of oil it had in reserves – a deceit that has left millions of pension holders and investors out of pocket

Stanley Bernstein, New York Class Action Lawyer: “There are a lot of investors and many maybe more investors that were affected by this fraud than any other fraud in history”
 
The following words and phrases were used in relation to the Shell reserves scandal during the course of the programme: –
 
“deceit”; “false pretences”; “falsely exaggerating”; “misled the world”; “basically they had been told a lie”; “embellished on the numbers”; “exaggerated the numbers”; “basically we lied to you”; “cover it up”; “doctoring the books”; “inventing numbers”; “certifying the reserve which he knows doesn’t exist”; “reserves replacement and production growth were inflated”; “I am becoming sick and tired of lying about the extent of our reserves”; “cover-up”; “actually destroyed documents”; “the scandal blew up and the company’s reputation carefully nurtured over a century was destroyed”; “Shell has lied intentionally and deceived the public”; “now they know that Shell lied to them and cost them money”; “a fraud perpetrated over a long period of time”; “a fraud perpetrated by the very heads of the company”.

As I said, plenty of material for a follow-up to The Wolf of Wall Street.

One of the original class action court documents. This one filed Sept 13 2004 (252 searchable pages) Shell Reserves Case Doc13 Sept 2004

Screen Shot 2014-01-12 at 21.54.29Comment posted on our Shell Blog by “an old EP hand” on Jan 12th, 2014 at 20:36

John,

Good idea to commemorate the reserves scandal. But I prefer the idiot Watts in his spacesuit. As a priest he almost looks human. He is not, he is one of the great bullies that Shell bred over the years. Just lest we forget!

(Sir Philip Watts donned a space suit at a 1998 Shell meeting in Maastricht that was meant to enthuse the troops. Many probably thought he was beginning to lose touch with reality and that proved to be the case)

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