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Posts under ‘Walter van de Vijver’

Safe sex in Nigeria

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By John Donovan

Safe Sex in Nigeria” was one of the best articles about the unfolding OPL 245 corruption scandal.  

It was published by the Economist in June 2013.

In particular, the timeline graphic at the beginning of the article shows where the blame probably lies:

Three things come from this:

(1) The machinations and intrigue go back much further than 2011

(2) ENI’s role appears to be relatively minor in comparison with that of Shell

(3) This saga dates back to the days of Phil Watts and Walter vd Vijver

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Little known key role of Michiel Brandjes in Shell reserves scandal

Screen Shot 2014-03-09 at 23.42.12However, unbeknown to Van de Vijver, Michiel Brandjes (right), who was alarmed by the findings of the report, sent a copy to a New York law firm Cravath, Swaine & Moore. This meant that events were no longer in the control of Shell. Instead, Shell’s most sensitive issue since its close association with Adolf Hitler and the Nazis several decades ago, had been disclosed to an outside firm, that had to consider and protect its own reputation.

By John Donovan

In May 2003, Frank Coopman, the then Chief Financial Officer of Shell EP, delivered bad news about Shell’s operations in Nigeria to the Chief Executive of Shell EP, Walter van de Vijver.

Van de Vijver sent Coopman back to Nigeria to investigate further.

The subsequent findings, set out in a status report, were even more devastating, revealing an overstatement of 1.1 billion boe.

Van de Vijver had instructed a team led by Coopman to work on the reserves issues.

The team included a top Shell lawyer, Michiel Brandjes, the then Company Secretary of Royal Dutch Petroleum.

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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.

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Workers Evacuated Following Blowout on Rig

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by  Karen Boman: July 23, 2013

Forty-seven workers were evacuated from the jackup Hercules 265 (250’ MC) offshore Grand Isle, Louisiana following a blowout Tuesday, according to media reports.

Efforts to regain control of the A-3 natural gas well at South Timbalier Block 220 that experienced a blowout are underway, rig owner Hercules Offshore said in a press release Tuesday. The company also has notified all necessary governmental authorities of the incident.

The U.S. Coast Guard evacuated workers on two lifeboats from the platform, according to New Orleans TV station website WDSU.com. None of the workers sustained any injuries, a Coast Guard spokesperson confirmed to Rigzone. The workers are being transported to a secure location, Hercules said in a statement. A Coast Guard cutter and two aircraft are headed out to the platform to conduct an overflight assessment, WDSU reported.

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In the new Shell to lie is acceptable unless your found out

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Screen Shot 2013-05-21 at 23.30.59The crisis in my book, and we are far from the endpoint in this, is that RDS officials lied in that the decision to move Kulluk was not related to tax avoidance when it was.  Perhaps that is why the RDS CEO has taken a closer interest in his family and the sustainability of his future.

ARTICLE BY BILL CAMPBELL, RETIRED HSE GROUP AUDITOR, SHELL INTERNATIONAL

In the new Shell, that which developed in the days of post transformation, group dancing in that nice hotel near the Het Loo Palace, with the dear leader Watts arriving from space etc around the same time, who can forget those heady days.  Is that when to lie and deceive became the norm in the head sheds of The Hague. Is that when the growth of VP’s started, not the Joe Biden variety, the Shell model, we currently appear to have more VP’s than indian meals sold in Bradford on a Friday night.

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Ahead of Trial, Talk of a BP Settlement in 2010 Oil Spill

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A BP cleanup crew removing oil from a beach in May 2010 in Port Fourchon, La., after the Deepwater Horizon disaster. Photo Credit: John Moore/Getty Images

By and : A version of this article appeared in print on February 24, 2013, on page A17 of the New York edition

With a major civil trial scheduled to start Monday in New Orleans against BP over damages related to the explosion of an offshore drilling rig in 2010, federal officials and those from the five affected Gulf Coast states are trying to pull together to strike an 11th-hour settlement in the case.

A lawyer briefed on those talks said that the Justice Department and the five states — Alabama, Florida, Louisiana, Mississippi and Texas — had reportedly prepared an offer to resolve the two biggest issues central to a series of trials against BP, the first of which starts Monday.

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Starring Role of Shell CFO Simon Henry in Reserves Scandal

By John Donovan

On 13 March 2009, the FT published an article about Simon Henry, who was about to become Chief Financial Officer of Royal Dutch Shell Plc. It said that he had survived the Shell reserves misreporting scandal with his reputation intact. On the basis of irrefutable Shell internal evidence, we take issue with that conclusion.

We have today published evidence confirming his starring role in the scandal. It includes an email sent directly to Mr Henry by the then Chief Executive of Shell Exploration & Production, Mr Walter van de Vijver. The content removes any doubt that Simon Henry knew two years before the scandal broke that Shell had booked reserves it should not have booked.

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Verdict on Royal Dutch Shell CFO Simon Henry

Shell internal email correspondence irrefutably proves that Simon Henry was aware in March 2002 that “reserves bookings were made that should not have been made”. Walter van de Vijver, the “sick and tired” Chief Executive of Shell EP, gave the information directly to him. As can be seen in the email, Walter van de Vijver aggressively accused Mr Henry of setting targets that were near impossible to achieve. The question arises of whether Mr Henry was a culprit, an accomplice, or an innocent bystander.

By John Donovan

INTRODUCTION

We have published a series of articles about the starring role of Simon Henry in the Royal Dutch Shell reserves scandal.

Shell internal email correspondence irrefutably proves that Simon Henry was aware in March 2002 that “reserves bookings were made that should not have been made”. Walter van de Vijver, the “sick and tired” Chief Executive of Shell EP, gave the information directly to him. Walter van de Vijver accused Mr Henry of setting targets that were near impossible to achieve.

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Desperation led to Shell’s plotting to exploit 9/11 attacks

Screen Shot 2014-02-10 at 16.29.29BUILD UP TO SHELL RESERVES SCANDAL: Comments by leading Shell execs: “…the market will want to know whose head is going to roll for what they will see as blatant deception.”; “this is potential dynamite for management credibility and the share price”; “…how you have to break the detail of this news in September, assuming that there is indeed a firestorm of hostile comment…”; “why should we have any more confidence in these numbers than the previous ones…”; “…please don’t let the people who have got us into this mess be under any illusion that there is an ‘easy’ answer…”; “You will blight the relative TSR of the Group and everyone’s score card for years to come”; ‘So “blaming”’ it on field declines and slippage on growth in emerging markets is the least we should do in order to downgrade expectations.’

By John Donovan

When we published an article about Shell executives plotting to exploit the 9/11 attacks, we said that the motive behind the discussion was well founded internal and external concern about Shell production growth and problematic reserves.

We now publish Shell internal emails circulated in the months leading up to 9/11, which provide proof of the degree of concern over these issues that led to Shell executives considering such a distasteful strategy to manipulate the markets.

Some extracts:

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9/11 Terror Attack and the Shell Reserves Scandal

By John Donovan

On Friday we published an article revealing Shell internal email correspondence, which provided proof that three weeks after the 9/11 terrorist attack on the USA, Shell executives were considering how Shell could exploit the horrific event for commercial reasons.

As can be seen from the correspondence, the objective was to “buy us a bit of time” in dealing with “production growth” … and “reserves replacement…” Both are key factors in assessing the value of an oil company. Shell was increasingly vulnerable to criticism on both issues.

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Simon Henry and the reserves time bomb

Were they aware that Simon Henry was a key player, as Head of Global Investor Relations, in dealing with the reserves data and actually had responsibility to ensure the quality/accuracy of the data before it was disclosed to analysts and investors? As we all know, it turned out that some of the data was not only inaccurate, but fraudulent. He had been warned that a Gorgon 600 million BOE reserves booking was an IR time bomb.

Introduction: A draft of the article below was supplied to Shell in advance, namely to Mr Michiel Brandjes, the Company Secretary & General Counsel Corporate of Royal Dutch Shell Plc and the CFO, Mr. Simon Henry. We invited Shell to point out any factual inaccuracy and/or supply comment for unedited publication with the article. No response other than an automated message has been received.

ARTICLE

By John Donovan

On 13 March 2009, the Financial Times published an article about Simon Henry, who was about to become Chief Financial Officer of Royal Dutch Shell Plc. It said that he had survived the reserves misreporting scandal with his reputation intact. I wonder how much investigation of the facts was undertaken before arriving at that conclusion?

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Candid testimony of Simon Henry about disgraced Shell EP Boss Walter van de Vijver

As can be seen in his testimony, Simon Henry deliberately limited the amount of time that Walter van de Vijver spent with UK and US investors, almost as if there was something to hide? Wonder what current Shell investors will make of that revelation? An insight into how Mr Henry thinks shareholders can be manipulated and shielded from potential spontaneous outpourings of the truth. The Dutchman wouldn’t learn his lines.

“I am becoming sick and tired about lying,” said Walter van de Vijver (right), senior executive at Royal Dutch/Shell. Photo Credit: Chris Ratcliffe/Bloomberg News

Candid testimony of Simon Henry about the disgraced Shell Exploration And Production Chief Executive, Walter van de Vijver (shown right).

Simon Henry became Head of Shell Group Investor Relations in March 2001. His predecessor was Walter van de Vijver.

Extracts from the sworn testimony of Simon Henry to the U. S. Securities and Exchange Commission on 19 October 2004 in Washington D.C. The reference to “one on one” meetings, was in regard to Shell senior management meetings with analysts and investors.

As can be seen in the testimony, Simon Henry deliberately limited the amount of time that Walter van de Vijver spent with UK and US investors, almost as if there was something to hide? Wonder what current Shell shareholders will make of that revelation? An insight into how Mr Henry thinks shareholders can be manipulated and shielded from potential spontaneous outpourings of the truth. The Dutchman wouldn’t learn his lines.

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Candid testimony of Shell’s Simon Henry about Sir Philip Watts

Q: Do you like Mr. Watts personally? A: It was difficult to like Phil.  He was not a guy you go for a beer with. …he was still running with that chip on his shoulder… He was a guy from the wrong side of the tracks.

Candid (some might say indiscreet) testimony of Simon Henry about the disgraced Shell Group Chairman Sir Philip Watts (shown right).

Extracts from the sworn testimony of Simon Henry to the U. S. Securities and Exchange Commission on 19 October 2004 in Washington D.C.

Mr Henry is currently Chief Financial Officer of Royal Dutch Shell Plc.

Q: With the benefit of hindsight, were there ever instances where you believed Mr. Watts provided the market with incomplete or inaccurate information?

A: With the benefit of hindsight, he answered a lot of questions about Gorgon, and with the benefit of hindsight, they could have been answered differently.

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How Shell’s Move To Revamp Culture Ended in Scandal

FROM OUR NOVEMBER 2004 SHELL NEWS ARCHIVE

How Shell’s Move To Revamp Culture Ended in Scandal: “The root of the problem, however, goes significantly further back than Sir Philip’s reign, which began in 2001”: “These deeper roots are significant because the company has yet to make a full break with its past. Mr. van der Veer is a longtime Shell executive who sat on the committee that received — and dallied over — warnings about the accounting problems.”: “In addition to its ambitious plans to discover new oil and gas cheaply, Shell under Sir Mark was redefining how it counted existing reserves.”: “Sir Mark Moody-Stuart, chairman from 1998 to 2001, remains on the board of Shell’s English parent… He declined to comment about reserves issues. And Shell still can’t seem to get a handle on its reserves.”

As New-Age Style Came In,
Geology Skills Lost Out;
Imitating Jerry Springer
Oilmen at a Rainy Playground

By CHIP CUMMINS and ALMAR LATOUR Staff Reporters of THE WALL STREET JOURNAL

November 2, 2004; Page A1

In late 2000, the head of the Dutch exploration unit at Royal Dutch/Shell Group asked his planners to deliver five-minute skits pitching ideas for discovering oil and gas.

In one skit, a naked employee ran on stage to catch the boss’s attention, say two people who attended. Another featured a mock episode of the Jerry Springer show, the incendiary daytime TV talk program. A third, after a bit of fun and games, promised to extract large quantities of natural gas cheaply from seemingly declining Dutch fields.

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Watchdog’s bark far worse than its bite

From our November 2005 Shell News Archive

The Times: Watchdog’s bark far worse than its bite

“In the Shell case, the FSA had plenty of evidence of a conspiracy at the highest level against the interests of shareholders. The company’s own investigation unearthed compelling e-mail evidence, not least former exploration director Walter van de Vijver’s infamous complaint that he was “becoming sick and tired about lying about the extent of our reserves issues”.: “…it looks downright embarrassing that the FSA official who fought Sir Philip, former acting enforcement head David Mayhew, will later this month wave goodbye to the FSA and walk straight into a highly paid job at Herbert Smith — the firm advising Sir Philip.”

Posted Friday 11 Nov 2005

SHELL, we were told by the Financial Services Authority last summer, was guilty of “unprecedented misconduct”. For five years, from 1998 to 2003, the company had repeatedly misled shareholders over its oil and gas reserves. It was so culpable that the regulator felt it had no choice but to fine it a then-record £17 million.

Yet we are now asked to believe that no one running the company at the time was actually to blame. The FSA yesterday dropped its investigation into and proceedings against the former chairman, Sir Philip Watts, and other unnamed individuals. After an 18-month inquiry the regulator’s enforcement arm had assembled a case against the individuals. But its Regulatory Decisions Committee, which makes the final judgment, was unconvinced. Or was it simply unwilling? For years the FSA has banged the drum about how it would hold senior figures to account when companies broke the rules. Yet time and again, the FSA finds companies guilty of serious offences while failing to secure individual scalps. The Citigroup bond trading scandal ended with all the traders who had been involved reinstated and no senior figure so much as formally reprimanded by the authorities.

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Shell Seeks to Export U.S. Oil

October 12, 2012

By BEN LEFEBVRE

HOUSTON—Royal Dutch Shell RDSA +0.28% PLC said late Thursday it has applied for a permit from the U.S. Department of Commerce to export crude oil in a sign of how a boom in U.S. oil production from shale rock is reshaping the country’s role in the global energy marketplace.

The U.S. currently exports less than less than one half of 1% of its total oil imports, according to data from the Energy Information Administration. However, the revolution in hydraulic fracturing technology that has coaxed large volumes of light sweet oil from shale rock previously thought unprofitable has generated an unprecedented boom that the EIA says will bring U.S. production to its highest level in nearly two decades next year.

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Shell supertanker steers into deeper waters

FROM OUR SHELL NEWS ARCHIVE SEPT 2004

The Independent: Michael Harrison’s Outlook: Shell supertanker steers into deeper waters

“brotherly love has been notable for its complete absence inside the South Bank politburo, where the motto has been stab someone in the back before you are made to walk the plank yourself.”: Judging by the reaction in the City to the company’s strategic review, investors are not overflowing with the milk of human kindness either.”

Posted 24 September 2004

“Let brotherly love continue”, read the gilded inscription above the doorway of the livery hall where Shell yesterday unveiled its latest version of what passes for a strategy. Chance would be a fine thing. Far from continuing, brotherly love has been notable for its complete absence inside the South Bank politburo, where the motto has been stab someone in the back before you are made to walk the plank yourself.

Judging by the reaction in the City to the company’s strategic review, investors are not overflowing with the milk of human kindness either. The truth is that Shell will not begin to emerge from the black cloud which enveloped it in January until it has fundamentally changed the way the business is run and governed. That is still some months away and no amount of management gobbledegook about raising performance bars and the like, of which there was plenty on offer yesterday, will make much of a difference in the meantime.

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Retired Shell engineer played central role in reserves scandal

FROM OUR AUGUST 2004 SHELL NEWS ARCHIVE

Financial Times: Retired Shell engineer played central role

“the company had been engaged in accounting manoeuvres since 1997-98, including a flawed internal audit function”; “Shell had engaged as [group reserves auditor] a retired Shell petroleum engineer – who worked only part time and was provided with limited resources and no staff – to audit its vast worldwide operations.”

By Adrian Michaels in New York and Carola Hoyos and Andrew Parker in London

Posted 30 August 2004

US and UK regulators on Tuesday went several steps further than Royal Dutch/Shell in their dissection of what went wrong.

The Anglo-Dutch oil group had already presented the main findings of an internal investigation in April into its reserves debacle.

That report heavily criticised dismissed senior executives – Walter van de Vijver, the former head of exploration, and Sir Philip Watts, former chairman. But it had less to say on how the company had been engaged in accounting manoeuvres since 1997-98, including a flawed internal audit function. The US’s Securities and Exchange Commission and the UK’s Financial Services Authority delve into the origin of the problems. “

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The Shell Show, a tragicomedy in an unlimited number of parts

FROM OUR AUGUST 2004 SHELL NEWS ARCHIVE

The Daily Telegraph: The landslide bringing down Shell grandees

The SEC and FSA reports, however, go back to the previous regime, when Sir Mark Moody-Stuart was chairman.”: Even Shell fell for the “group bonding” mumbo-jumbo, and he was videoed stumbling blindfold around head office during one such session, talking of his desire to “encourage the creativity of people” around him. He seems to have succeeded.”

(Filed: 28/08/2004)

The Securities & Exchange Commission has announced its intention to pin the reserves scandal on individuals, writes James Moore

The Shell Show, a tragicomedy in an unlimited number of parts, featured a powerful double act this week.

On Tuesday America’s Securities and Exchange Commission and the Financial Services Authority both gave the company a good kicking for wrongly booking billions of barrels of oil and gas reserves as “proven”.

Now Harold Degenhardt, the director of the Securities & Exchange Commission’s office in Fort Worth, Texas, is hard at work on the sequel. “What people need to focus on is that companies only act through people,” he says.

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Shell settles fraud case for $150M

FROM OUR AUGUST 2004 SHELL NEWS ARCHIVE

CNN: Shell settles fraud case for $150M

Oil company agrees to pay SEC for overstating reserves, also settles market abuse case in Britain.

August 24, 2004

NEW YORK (CNN/Money) – Royal Dutch/Shell has agreed to pay about $150 million to settle charges by U.S. and British regulators that it vastly overstated oil reserves.

Under the settlement, Shell has also agreed to commit another $5 million to establish an internal compliance program under the direction and oversight of the company’s legal director, the Securities and Exchange Commission said in a statement.

The company units cited by the SEC, Royal Dutch Petroleum and Shell Transport, neither admitted to or denied any wrongdoing, the commission said.

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An oil giant’s road from Rajasthan to ruin

 FROM OUR AUGUST 2004 SHELL NEWS ARCHIVE…

Michael Harrison’s Outlook: An oil giant’s road from Rajasthan to ruin

“Shell, by contrast, has endured the most humiliating, torrid and damaging period in its 100-year history. It is hard to think of a more spectacular fall from grace or a more abject example of management failure.”: “The deeper it dug itself into this hole, the more Shell was forced to lie” 

Fortunes; Failure; Scramble

14 August 2004

It is a long way from the arid deserts of Rajasthan to the Shell Centre on London’s South Bank. But two events this week provide a link.

One was the announcement by Cairn Energy that it had made yet another significant oil discovery in a region of India hitherto better known for its sumptuous pink palaces and backpacking tourists. The other was the disclosure that Shell’s former head of exploration and production, Walter van de Vijver, is to receive a £2.5m pay-off after being sacked for his part in the company’s reserves scandal.

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Money talks for Shell’s singing director

FROM OUR AUGUST 2004 SHELL NEWS ARCHIVE…

The Independent: Michael Harrison’s Outlook: Money talks for Shell’s singing director

“Shell is hardly a byword for good corporate governance, and yesterday it lived up to its reputation by producing another stonker…”: “As usual, Shell is unable to cast any light in the darkness as to why the two men’s severance arrangements are so different in size and nature. Perish the thought that one of them is being paid to grass up the other.”

13 August 2004

Shell is hardly a byword for good corporate governance, and yesterday it lived up to its reputation by producing another stonker of a pay-off for one of the directors caught up in its reserves reporting scandal.

On this occasion, however, there is a twist in the tail. Walter van de Vijver is going to have to sing for his severance. In order to qualify for his full £2.5m package, the company’s former head of exploration and production will have to co-operate with the “relevant authorities” as they conduct their various criminal inquiries into how Shell came to invent quite so many non-existent barrels.

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Selfishness won’t pay off, says Shell

Daily Mail: Selfishness won’t pay off, says Shell

“Shell refused to comment on whether it is reviewing the role of its auditors, KPMG and PricewaterhouseCoopers. The accountants may be targeted by the US law firm leading the class action suits against the embattled oil major.”

By Ruth Sunderland

30 August 04

EMBATTLED oil giant Shell is introducing a new bonus scheme next year to stamp out a selfish ‘me-first’ culture and encourage workers to devote themselves to the greater good of the company.

The group has come under fire for its lavish payouts to former bosses ousted in the wake of the reserves scandal that dragged it into unprecedented disgrace.

Sir Philip Watts received a £lm payoff and Dutchman Walter van de Vijver got £2.5m.

Boss Jeroen van der Veer said he hoped the new incentive plan would encourage staff to prioritise ‘enterprise first’ rather than ‘self first’.

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Power struggle that cut an oil giant down to size

The Sunday Times: Power struggle that cut an oil giant down to size

‘A revealing new book lifts the lid on the boardroom manoeuvring that finally brought change to Royal Dutch/Shell: WALTER VAN DE VIJVER was worried, and was about to express his fears in an e-mail to his boss. “I am becoming sick and tired about lying about the extent of our reserves issues,” he told Sir Philip Watts.’

Sunday 2 October 2005

WALTER VAN DE VIJVER was worried, and was about to express his fears in an e-mail to his boss.

“I am becoming sick and tired about lying about the extent of our reserves issues,” he told Sir Philip Watts.

The top two executives at Shell, the Anglo-Dutch oil giant, had been locked in a bitter struggle since Watts became chairman of the committee of managing directors and Van de Vijver had succeeded him as managing director for exploration and production.

Commentators regularly voted Shell one of the world’s most admired companies. But it wasn’t a company — it was a joint venture between Royal Dutch Petroleum, which had a 60% controlling interest, and Britain’s Shell Transport and Trading, which had the rest.

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SHELL: Two radical steps could further distance Royal Dutch Shell from the reserves scandal

SHELL: Two radical steps could further distance Royal Dutch Shell from the reserves scandal

Monday 8 August 2005

By John Donovan

Although the media has welcomed the appointment of Jorma Ollila as the new Shell Chairman from June 2006, many of the news reports about his recruitment also include references to the Shell reserves debacle. This is despite the fact that over a year and a half has passed since news first broke about the scandal.

Commentary harking back to the scandal has been a regular feature of news reports about Shell. Although Shell has paid nearly a quarter of a billion dollars in regulatory fines and litigation settlements, other litigation is still proceeding, as well as on-going investigations, so there is no prospect of negative commentary abating any time soon. There is also the matter of the pending FSA tribunal ruling in respect of proceedings brought by disgraced former Shell Chairman Sir Phillip Watts.

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Shell News Archive Saturday, 8 January 2005

Shell News Archive Friday, 31 December 2004

Shell agrees to cull surplus non-execs

Sunday Telegraph: Shell agrees to cull surplus non-execs

“Executives of Royal Dutch/Shell, the Anglo-Dutch oil giant, have agreed to make a huge cull of its non-executive directors…”: “Meanwhile Judy Boynton, the discredited former finance director, is understood to be likely to agree her severance package in the next two weeks.”: “Her position was seen as untenable after the reserves debacle.”: “It is understood that her package will be close to her contractual terms, which guarantee a payoff worth at least $1m.”

By Sylvia Pfeifer (Filed: 26/09/2004)

Executives of Royal Dutch/Shell, the Anglo-Dutch oil giant, have agreed to make a huge cull of its non-executive directors – the clearest sign yet that the company will unify its two boards next year.

The boards of the two companies – Royal Dutch and Shell Transport & Trading – currently have 16 non-executives between them, far more than the average UK plc board.

The non-execs on the Royal Dutch board include some of Holland’s leading business and political figures, including Wim Kok, the country’s former prime minister. Shell Transport & Trading’s board has nine non-executives.

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Shell pumps in £25bn to restore reputation

Daily Express: Shell pumps in £25bn to restore reputation

By Andrew Johnson

Posted 24 Sept 04

OIL GIANT Shell is to step up investment by 20 per cent to $45billion (£25billion) for the next three years in a major shake-up designed to restore the group’s battered reputation.

More than $34billion has been earmarked for the group’s exploration and production arm, the division at the centre of the scandal which saw nearly 4.5 billion barrels wiped off the Anglo-Dutch oil giant’s reserves.

The focus is on bringing oil and gas fields on line and turning potential into production. However, $4.5billion will be spent searching for oil resources, an area in which Shell has under-invested until recently.

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Shell unveils $15bn recovery plan

The Guardian: Shell unveils $15bn recovery plan

“The reserves scandal forced Shell’s chairman, Philip Watts, to resign, along with Walter van de Vijver, its oil and gas chief and its chief financial officer, Judy Boynton. The company was fined by the financial services authority in the UK and the securities and exchange commission (SEC) in the US.”

Mark Tran

Posted 23 Sept 2004

The Anglo-Dutch oil giant Shell today sought to draw a line under its reserves scandal by announcing plans to spend $15bn (£8.4bn) a year to replenish reserves and develop production in its oil and gas business.

The world’s third-largest oil company also said it would sell $10-$12bn of non-core businesses over three years and would look at “focused acquisitions” to create value.

“We are focused on improving our competitive position, strong cash generation and total shareholder returns,” Jeroen van der Veer, the Shell chairman, said in the group’s strategy statement. “Replacing our reserves is a priority to support future growth.”

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Hand-outs to Sir Philip Watts and Walter van de Vijver a disgrace

The Scotsman: Comment: “Walter van de Vijver, head of exploration at Shell, got £2.5m and his boss Sir Philip Watts £1.1m. These hand-outs are a disgrace. They undermine popular capitalism. They throw goodwill down the drain.”: “Little wonder small investors are turning away in droves from the stock market.”

Posted 20 Sept 04

JUST when – if ever – will the boardroom pay bonanza come to an end?

Case after case of huge pay-outs to directors sparks shareholder fury. But the gilded, rotten caravan rolls on.

Now come two fresh cases that will stir controversy. Yesterday it emerged that Abbey National chief executive Luqman Arnold is set to make £5.1 million through Banco Santander’s likely £8.8 billion offer.

He stands to get up to £3.5m from share options. And he is also due to receive a £1.6m termination payment when he quits next June.

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Daily Mail: Shell launches charm offensive

Daily Mail: Shell launches charm offensive

“Shell shares at 417 1/2p have recouped their losses on the reserve shock. That should help in fighting US legal claims, but it is largely due to the soaring price of crude.”

20 September 2004,

SHELL will this week beat the drum about slimming down its sprawling global empire. Chief executive Jeroen van der Veer can point to up to £5.6bn of likely proceeds from a growing list of disposals.

But his major City presentation on Wednesday needs to convince investors that the sales cash will not be soaked up in cost overruns on major projects.

The best news of all would be some sizable new discoveries. Shell has been drilling actively in the Gulf of Mexico, Nigeria, Morocco and Malaysia. It is also seeking to line up a big gas deal in Libya. Its £1.1bn share buyback programme is likely to be stepped up.

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Ex-Shell Chairman Challenges Watchdog over Oil Reserves Scandal

The Scotsman: Ex-Shell Chairman Challenges Watchdog over Oil Reserves Scandal

“The FSA found Shell guilty of market abuse and the Anglo-Dutch company last month agreed to pay £17 million to the FSA. (ShellNews.net)

By Phil Waller, City Staff, PA News

Posted 17 Sept 04

The former chairman of oil group Royal Dutch/Shell today challenged the City watchdog over its findings on the company’s oil reserves scandal.

In a letter to the Financial Services and Markets Tribunal, Sir Philip Watts sought permission to challenge some of the Financial Services Authority’s (FSA) findings on the reserves overstatement, which has led to Shell downgrading its proven reserves by 23%, or 4.47 billion barrels, since January.

The FSA found Shell guilty of market abuse and the Anglo-Dutch company last month agreed to pay £17 million to the FSA.

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Shell’s Ousted Ex-Boss Breaks Cover, Slams FSA

THE WALL STREET JOURNAL: Shell’s Ousted Ex-Boss Breaks Cover, Slams FSA

“Both of Shell ‘s parent companies – Royal Dutch Petroleum Co., of The Hague, and London-based Shell Transport & Trading Co. – as well as Watts, Van de Vijver and other individuals face purported class action law suits in the U.S. from aggrieved shareholders. Watts and other involved individuals still also face probes from the SEC and the U.S. Justice Department.” (ShellNews.net)

By MARK LONG

September 17, 2004

Of DOW JONES NEWSWIRES

LONDON — Philip Watts, the ousted former chairman of Royal Dutch/Shell Group (RD, SC), broke cover Thursday, accusing the U.K.’s financial regulator of violating his rights and running a flawed investigation into Shell ‘s downgrade of its oil reserves.

“I believe that a full and fair examination of all the facts will demonstrate that I have acted properly and in good faith at all times,” Watts said in a cover letter to a filing requesting that the U.K.’s financial regulator’s appeals board give him a chance to clear his name.

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Vision needed to revitalise Shell

London Evening Standard: Vision needed to revitalise Shell

“It is just six months since possibly the biggest post-Enron scandal erupted at Shell with the stunning admission that a group regarded as one of the most reliable in the world had lied about the health of its business.”

Steve Hawkes,

17 September 2004

SHELL chairman Jeroen van der Veer needs to give the presentation of his life next week, when he steps into the heart of the City to convince sceptics the struggling oil giant is on the way back.

After the worst year in the group’s long, proud history, van der Veer will finally spell out his vision for improving Shell’s reputation, restoring growth and, most importantly, finding more oil.

The setting is suitably ironic. Plaisterers’ Hall, one of the largest livery halls in London, is touted as reflecting the ‘grandeur of a bygone era’. Van der Veer now sorely needs to haul Shell into modern times. Deutsche Bank’s respected oil analyst JJ Traynor says: ‘The seeds of recovery are there … the right presentation could provide the catalyst.’

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Former Shell Chairman Appeals Censure

Forbes.com: Former Shell Chairman Appeals Censure

“The Financial Services Authority’s final notice, issued on Aug. 24, said Shell had made false or misleading announcements in relation to its hydrocarbon reserves and reserves replacement ratios between 1998 and 2003, and had made those announcements despite indications and warnings that they were false.”

Associated Press

09.16.2004

The former chairman of Royal Dutch/Shell Group, Sir Philip Watts, petitioned a British regulatory body for permission to challenge some of its findings on Shell’s oil reserves scandal.

In a letter submitted to the Financial Services and Markets Tribunal, Watts defended his actions as head of the company.

“I believe that a full and fair examination of all the facts will demonstrate that I have acted properly and in good faith at all times,” Watts said in the letter.

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The Guardian: Shell’s pounds 17m will be used to reduce fees levied by regulator

The Guardian: Shell’s pounds 17m will be used to reduce fees levied by regulator

“The reduction is almost entirely due to the penalty paid by Shell for “unprecedented misconduct” in misleading the markets over the reporting of its oil and gas reserves.”

JILL TREANOR

Sep 14, 2004

All companies regulated by the Financial Services Authority can expect a cut in their regulatory fees next year following the record pounds 17m fine levied on oil company Shell.

For the first time since it was formed, the City regulator plans to reduce by just under 10% the charge it levies on firms and individuals it regulates.

The reduction is almost entirely due to the penalty paid by Shell for “unprecedented misconduct” in misleading the markets over the reporting of its oil and gas reserves.

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FSA chief hits right note on investor responsibility

The Scotsman: FSA chief hits right note on investor responsibility

“In the wake of a splurge of recent fines, particularly the record £17 million penalty on Shell for the oil giant’s reserves shortfall and cover-up, there have been those who have argued that it is the culpable directors who should bear the penalty, not the companies and investors.”

SCRUTINEER

MARTIN FLANAGAN

CITY EDITOR

Posted 11 Sep 2004

THE comments of the head of Britain’s financial regulator about who should suffer from financial penalties for corporate wrong-doing – companies and shareholders or the errant directors themselves – is timely.

In the wake of a splurge of recent fines, particularly the record £17 million penalty on Shell for the oil giant’s reserves shortfall and cover-up, there have been those who have argued that it is the culpable directors who should bear the penalty, not the companies and investors.

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Shell Reserves Scandal: Retired Shell engineer played central role

FROM OUR AUGUST 2004 SHELL NEWS ARCHIVE

Financial Times: Retired Shell engineer played central role

“the company had been engaged in accounting manoeuvres since 1997-98, including a flawed internal audit function”;  “Shell had engaged as [group reserves auditor] a retired Shell petroleum engineer – who worked only part time and was provided with limited resources and no staff – to audit its vast worldwide operations.”

By Adrian Michaels in New York and Carola Hoyos and Andrew Parker in London

Posted 30 August 2004

US and UK regulators on Tuesday went several steps further than Royal Dutch/Shell in their dissection of what went wrong.

The Anglo-Dutch oil group had already presented the main findings of an internal investigation in April into its reserves debacle.

That report heavily criticised dismissed senior executives – Walter van de Vijver, the former head of exploration, and Sir Philip Watts, former chairman. But it had less to say on how the company had been engaged in accounting manoeuvres since 1997-98, including a flawed internal audit function. The US’s Securities and Exchange Commission and the UK’s Financial Services Authority delve into the origin of the problems. “

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Shell boss pours oil on troubled water

The Times: Shell boss pours oil on troubled water

“the scathing reports, in which the FSA accused Shell of announcing false oil-reserve figures since as far back as 1998 again drove investors to rage that not enough was being done to restore credibility.”

August 29, 2004

Posted 30 August 04

In an exclusive interview, Jeroen van der Veer spells out his plans to appease investors and analysts to Lucinda Kemeny

AFTER 33 years at Royal Dutch/Shell, Jeroen van der Veer, chairman of the oil giant’s committee of managing directors, probably would not have chosen to mark his ascension to the top by signing off £82m in fines to two of the biggest financial regulators.

Last week’s settlement with Britain’s Financial Services Authority and America’s Security and Exchange Commission over charges that Shell misled the market about the true position of its oil reserves may have at least closed one chapter in the crisis that has enveloped the company.

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The Scotsman: Concerns over potential £3m windfall

The Scotsman: Concerns over potential £3m windfall

“Ensuing investigations by the US Securities and Exchanges Commission and the UK Financial Services Authority revealed that the oil major had been over-inflating its reserves since 1998, implicating the company’s top management in the scandal.”

CATRINA STEWART

Posted 29 August 2004

A CORPORATE governance watchdog has flagged concerns over share option rewards for disgraced Royal Dutch/Shell executives Sir Philip Watts and Walter van de Vijver.

Sir Philip and Van de Vijver, who resigned this year along with chief financial officer Judy Boynton over the reserves scandal at Shell, could reap windfalls of over £3 million apiece if the dual-listed company’s share price achieves certain levels, said the Pensions Investment Research Consultancy (Pirc) this week.

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Daily Express: FAT CATS REWARD: SIR PHILIP Watts

Daily Express: FAT CATS REWARD: SIR PHILIP Watts

His deputy, Dutchman Walter van der Vijver, repeatedly warned him of the overstatement and finally exploded in an angry e-mail last November that he was “sick and tired of lying about the extent of our reserves”.

Published 28 August 2004

Company: Shell

Payoff: £1m

Anglo-Dutch oil giant Shell shocked stock markets in January by admitting that it had overstated its proven gas and oil reserves by more than 20 per cent, the equivalent of a mind-boggling 4.47 billion barrels. Shell, long considered a safe haven by private investors and pension funds, saw £3bn wiped off its share value in the subsequent furore. Almost everybody with a pension will have been hit by the fallout.

Chairman Watts initially claimed he first heard about the shortfall at the end of 2003 but it was later reported that he was warned about the dangers in February 2002. His deputy, Dutchman Walter van der Vijver, repeatedly warned him of the overstatement and finally exploded in an angry e-mail last November that he was “sick and tired of lying about the extent of our reserves”.

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Sunday Telegraph: Shell in Hell

Sunday Telegraph: Shell in Hell

29 August 2004

The oil giant has been heavily fined for overstating its reserves, but now looms the prospect of law suits against the individuals involved. Sylvia Pfeifer reports

The great and the good of the North Sea oil industry descended on the town of Stavanger in Norway last week for one of the sector’s annual get-togethers. But among the chief executives, politicians and royalty attending – Norway’s King Harald V opened the conference – there was only one man everyone wanted to see: Jeroen van der Veer.

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Daily Mail: Alarm at former Shell chiefs’ options

Daily Mail: Alarm at former Shell chiefs’ options

“Pirc says Watts could make £3.1m if the shares reach 552p”: “Regulators are still investigating those believed to have had a role in the company’s reserves scandal.”

27 August 2004

Posted 28 August 04

OVERNANCE watchdog Pirc has given Shell investors something else to worry about after warning that ousted bosses Sir Philip Watts and Walter van de Vijver could collect hefty option gains on top of their massive pay-offs.

Pirc says Watts could make £3.1m if the shares reach 552p – below their 637p peak in 2001. Any option gains for Watts would be on top of his £1.05m pay-off and £584,000 pension. Shell shares rose 3 1/4p to 399 3/4p.

Van de Vijver needs a 70% share rise to put all his options in the money. Pirc says they would then be worth £3.6m, on top of his £2.57m pay-off and £260,000 pension.

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The landslide bringing down Shell grandees

FROM OUR AUGUST 2004 SHELL NEWS ARCHIVE

The Daily Telegraph: The landslide bringing down Shell grandees

The SEC and FSA reports, however, go back to the previous regime, when Sir Mark Moody-Stuart was chairman.”: Even Shell fell for the “group bonding” mumbo-jumbo, and he was videoed stumbling blindfold around head office during one such session, talking of his desire to “encourage the creativity of people” around him. He seems to have succeeded.”

(Filed: 28/08/2004)

The Securities & Exchange Commission has announced its intention to pin the reserves scandal on individuals, writes James Moore

The Shell Show, a tragicomedy in an unlimited number of parts, featured a powerful double act this week.

On Tuesday America’s Securities and Exchange Commission and the Financial Services Authority both gave the company a good kicking for wrongly booking billions of barrels of oil and gas reserves as “proven”.

Now Harold Degenhardt, the director of the Securities & Exchange Commission’s office in Fort Worth, Texas, is hard at work on the sequel. “What people need to focus on is that companies only act through people,” he says.

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Regulators dig deeper into Royal Dutch/Shell’s problems

Financial Times: Regulators dig deeper into Royal Dutch/Shell’s problems

“The SEC is scathing about Shell’s advice to investors that it had changed its mathematics, saying in its 1998 annual report only that estimation methods “have been refined”.

By Carola Hoyos, Adrian Michaels and Andrew Parker

Published: August 25 2004 03:00

Posted 26 August 04

US and UK regulators yesterday went several steps further than Royal Dutch/ Shell in their dissection of what went wrong at the oil group.

The Anglo-Dutch group had already presented in April the main findings of an internal investigation into its reserves debacle.

That report had been heavy on its criticism of dismissed senior executives – Walter van de Vijver, the former head of exploration, and Sir Philip Watts, former chairman. But it had been less fulsome on the detail of how the company had been engaged in accounting manoeuvres since 1997-98, including the administering of an internal audit function that was riddled with flaws.

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Investigators say Royal Dutch-Shell officials in sights

Houston Chronicle: Probe aims at top: Investigators say Royal Dutch-Shell officials in sights

By TOM FOWLER

Posted 25 August 2004

U.S. and British securities regulators are focusing on senior Royal Dutch-Shell officials and the roles they may have played in the oil giant’s massive overstatement of reserves.

The Securities and Exchange Commission and England’s Financial Services Authority said Tuesday they are now pursuing senior officials from the company related to the matter, which led to numerous shareholder lawsuits and a Justice Department investigation.

“As our investigation continues, we intend to focus on, among other things, the people responsible for Shell’s failures,” said Harold Degenhardt, administrator of the SEC’s Fort Worth office.

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SEC Order Shows Many Involved In Shell Reserves Debacle

THE WALL STREET JOURNAL: SEC Order Shows Many Involved In Shell Reserves Debacle

“administrative order confirms that the scandal touched many officials beyond the senior executives who have left the company”

By JOHN M. BIERS

August 24, 2004 6:25 p.m.

Of DOW JONES NEWSWIRES

HOUSTON — After months of quietly investigating the Royal Dutch/Shell (RD,SC) accounting scandal, U.S. regulators finally weighed in Tuesday, concluding in an official report that the company “knowingly or recklessly” misrepresented its oil and gas holdings.

The government disclosed no new bombshells, but a Securities and Exchange Commission administrative order confirms that the scandal touched many officials beyond the senior executives who have left the company. Shell neither confirmed nor denied the findings in a 19-page SEC order released in tandem with $125 million settlement.

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The Guardian: Shell’s shame: FSA spells out abuse

The Guardian: Shell’s shame: FSA spells out abuse

“Fadel Gheit, an oil analyst at broker Oppenheimer & Co in New York, said the latest revelations from the regulators proved this was a corporate scandal of “historic proportions”. He added: “Short of Enron… I have not seen anything like this in 30 years of covering the market.”

Regulator confirms £17m fine and accuses group of ‘unprecedented misconduct’ in oil and gas reserves scandal

Terry Macalister

Wednesday August 25, 2004

The Financial Services Authority yesterday accused Shell of “unprecedented misconduct” for misleading the markets over the reporting of oil and gas reserves.

The searing criticism came alongside confirmation of a £17m fine for “market abuse” from the FSA plus a further $120m (£67m) from the Securities and Exchange Commission in the United States.

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Daily Telegraph: Shell takes mauling over ‘market abuse’

Daily Telegraph: Shell takes mauling over ‘market abuse’

“Shell was yesterday savaged by regulators in Britain and America for “unprecedented misconduct”: ‘The FSA said Shell “disseminated false or misleading information as to the true extent of its proved reserves” from 1998 until last July.’

By James Moore (Filed: 25/08/2004)

Shell was yesterday savaged by regulators in Britain and America for “unprecedented misconduct” that led to it mis-stating its proven oil reserves by more than a fifth.

The US Securities & Exchange Commission and the Financial Services Authority spelled out a catalogue of failings at the crisis-stricken oil company and set out their reasons for imposing penalties of $120m (£67m) in the US and a record £17m in the UK.

A further $5m will be spent by the Anglo Dutch company on developing and implementing a comprehensive internal compliance programme as part of its decision to settle an SEC fraud probe announced last month.

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