London Evening Standard: Shell scandal ‘could be repeated’
“Findings by regulators have widened the scandal by accusing Shell of giving false reserve figures from 1998 to 2003, raising questions about the role of executives, including Sir Mark Moody-Stuart”
Steve Hawkes,
25 August 2004
REPEAT of the reserves crisis at Shell may be unavoidable despite moves by the US regulators to force oil and gas majors to hire third parties to check the size of their discoveries.
Ryder Scott, the US firm brought in to requantify Shell’s reserves earlier this year, claims there are simply too few of its type around to cover the number of companies operating in the energy industry.
Ryder Scott chief executive Ron Harrell said: ‘Clearly there are not enough of us qualified to serve the needs of companies reporting to the Securities and Exchange Commission in conducting annual, meaningful reserve certifications.’
Calls for an international reporting standard for reserve bookings have increased since the Shell scandal, where it was forced to slash its proven reserves by 25% – or 4.7bn barrels.
The SEC provides guidance for reporting reserves but companies have to prove only that there is a ‘reasonable certainty’ a field will pump out a specified amount of oil or gas.
The SEC slammed Shell yesterday when confirming it was fining the Anglo-Dutch group £65m for market abuse.
The SEC penalty was four times the size of the Financial Services Authority’s own £17m penalty.
Findings by regulators have widened the scandal by accusing Shell of giving false reserve figures from 1998 to 2003, raising questions about the role of executives, including Sir Mark Moody-Stuart and Sir Philip Watts.
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