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Daily Telegraph: Shell accounts change brings $226m upgrade

Daily Telegraph: Shell accounts change brings $226m upgrade

“Shell has been plunged into crisis after admitting that it had overstated its “proven” oil and gas reserves by 23pc”

By Christopher Hope (Filed: 14/07/2004)

Shell said yesterday that its first quarter profits should be increased by $226m because of an accounting change brought about by the crisis over the oil and gas giant’s “lost” reserves.

Shell has been plunged into crisis after admitting that it had overstated its “proven” oil and gas reserves by 23pc or 4.47 billion barrels.

The first quarter net income rise to $4.7 billion came after Shell decided to file accounts based on US accounting rules, or GAAP.

This meant all its barrel sales will be reported on the same “first in first out” basis. The change had been signalled to analysts – but not quantified – after the first quarter results in May.

Separately, Shell announced that its non-executive directors who are looking at changes to Shell’s complicated Anglo-Dutch structure had hired Citigroup and NM Rothschild “to deepen its analysis of key options”.

These advisers would help the committee deal with the legal and technical problems which might spring from changes to Shell’s structure.

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