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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. read more

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. “ read more

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. read more

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. read more

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. read more

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. read more

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’. read more

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. read more

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. read more

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. read more

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. read more

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.” read more

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. read more

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. read more

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