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Posts from ‘August, 2004’

Shell’s auditors in firing line as US lawyers prepare class action

Sunday Telegraph: Shell’s auditors in firing line as US lawyers prepare class action

“Shell had ignored internal warnings for several years that it was overstating its reserves to maintain the appearance of having a strong oil and gas reserves base”

By Sylvia Pfeifer (Filed: 29/08/2004)

The US law firm leading class action lawsuits against Shell is considering targeting the oil giant’s external auditors, KPMG and PricewaterhouseCoopers, over their alleged role in the overbooking of reserves.

Stanley Bernstein, the senior partner with Bernstein Liebhard & Lifshitz, which is heading the class actions as “lead plaintiff” on behalf of investors, said that his firm was considering including the auditors when it files an amended complaint against Shell next month. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

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. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

The Guardian: He’s no Hector

The Guardian: He’s no Hector

David Varney, executive chairman of Revenue and Customs: “Varney admits to being “very concerned” about seeing Shell immersed in a reserves scandal.”

Terry Macalister

Saturday August 28, 2004

David Varney is not anybody’s idea of a typical taxman, but from next week he will become the top public face of both the Inland Revenue and of the Customs people who search your car at Dover.

The state-educated south Londoner could not be further removed from bowler-hatted cartoon character Hector the Tax Inspector, who used to exhort us to get our end of year forms in. Relaxed and chirpy, the bearded 58-year-old is willing to comment on pretty much anything – including troubled Shell, where he worked for 28 years and is still viewed by some as a potential chairman. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Buoyant E&P sector

Financial Times: Buoyant E&P sector

“Shell has a particular problem at the moment. It is running out of oil in the ground and has lost a chairman and faced public humiliation following surprise cuts in its oil reserve estimates earlier this year.”

Posted 28 August 04

From Antrim Energy, through Cairn Energy and Paladin Resources, to Tullow Oil and Venture Production, the 20 oil and gas exploration and production companies that represent about 97 per cent of the sector by capitalisation have increased in value by an average of about 70 per cent this year.

And the superlatives do not stop there. Canaccord Capital analyst Charlie Sharp points out that the E&P (exploration and production) index has outperformed the FTSE All-Share consistently over the past five years. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Shell-shocked

Financial Times: Shell-shocked

“Shell was found to have “announced false or misleading reserves and reserves replacement ratios throughout the period 1998 to 2003″…: “three heads have rolled… other people in key positions during that time remain. They include Jeroen van der Veer… and Sir Mark Moody-Stuart”

By Jane Fuller

Published: August 28 2004 0

Speaking of oil companies, Royal Dutch/Shell endured another pasting from regulators this week.

We already knew it had been fined $120m by the US Securities and Exchange Commission and £17m by the Financial Services Authority for market abuse. But we had not been treated to the full reasons.

Shell was found to have “announced false or misleading reserves and reserves replacement ratios throughout the period 1998 to 2003”. While three heads have rolled for covering up or failing to act on this problem, other people in key positions during that time remain. They include Jeroen van der Veer, newly installed as chairman of the committee of managing directors, who has been an MD since 1997; and Sir Mark Moody-Stuart, who preceded the departed Phil Watts as chairman of the CMD and is still a non-executive director. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

FSA’s report accuses Shell of market abuse

The Times: That was the week: “FSA’s report accuses Shell of market abuse by announcing false oil reserves between 1998 and 2003, implicating several major executives in the scandal, including Sir Mark Moody-Stuart”

August 28, 2004

The Financial Services Authority says that the misreporting of a quarter of Shell’s oil and gas reserves was part of an attempt over several years to boost its poor exploration performance.

The FSA’s report accuses Shell of market abuse by announcing false oil reserves between 1998 and 2003, implicating several major executives in the scandal, including Sir Mark Moody-Stuart, former chairman of Shell’s committee of managing directors.

The FSA imposes a £17 million fine, the largest in its history, for misconduct amounting to market abuse. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

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. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Petrobras Executives Continue In Chile, Mulling Takeover

THE WALL STREET JOURNAL: Petrobras Executives Continue In Chile, Mulling Takeover

…considering an asset swap involving Petrobras upstream assets and Shell downstream operations, including service stations in Chile and Argentina and refining in the latter country.

DOW JONES NEWSWIRES

August 26, 2004 10:03 a.m.

SANTIAGO — Executives from Brazilian state energy company Petroleo Brasileiro (PBR) continue in Chile, meeting peers and mulling a possible asset purchase in the Andean country, one of only three South American countries in which it isn’t yet active and whose energy market is a declared target.

“Any commitment undertaken leading to the acquisition of any asset in Chile will be announced to the market and the shareholders at the appropriate time in accordance with the company’s disclosure practices,” the company said in a statement distributed from its Rio de Janeiro headquarters. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Oil companies must be made to follow UN on human rights

The Independent: Oil companies must be made to follow UN on human rights

“Shell and BP the leaders in building a human rights responsibility into their business principles and recognising that explicit adherence to the Universal Declaration of Human Rights”

LETTER From Sir Geoffrey Chandler

United Kingdom; Aug 27, 2004

Sir: As oil prices reach new heights it would be as well to realise that stability of price and security of supply will be achieved not by the geographical diversification of sources, but by political justice and economic equity in the producing countries. Unfortunately it is the former course that consuming countries, with the US in the lead, appear to be pursuing.

Nearly 70 per cent of the world’s proven reserves of oil and gas lie in countries with poor human rights records. The growth of oil wealth has fuelled the ability of governments to invest in armaments and to transform small-scale corruption into personal or political gain on a scale hitherto undreamt of. The contrast between oil wealth and national poverty is nowhere more evident than in Angola and Equatorial Guinea, countries which may be considered secure from the turbulence of the Middle East. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Managers look for the moral dimension: ‘Post-Enron, post-Shell, post-WorldCom, post-Parmalat’

Financial Times: Governance: Managers look for the moral dimension: ‘Post-Enron, post-Shell, post-WorldCom, post-Parmalat’

By Thomas Stewart

Posted 27 August 04

In a theatre lobby at intermission, I spotted a half-familiar face, looking at me with the “is that you?” expression people wear when they have not seen someone in a long time. He had worked for me 15 years earlier. He had left to accept a job in another city; I had changed employers, too. Since then he had married, had children and made a great success of his new job.

When I congratulated him and facetiously claimed credit for his achievements, he startled me by agreeing. He said: “You told me something that made an enormous difference in my life.” He repeated it – something about how he had strong organising skills – but I could not remember having said it. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Shell Chairman responsible for Shell’s descent into cover-up, scandal and shame – Sir Mark Moody-Stuart

The Shell Chairman responsible for Shell’s descent into cover-up, scandal and shame on an epic scale – Sir Mark Moody-Stuart

By Alfred Donovan, 27 August 2004

(This article was written at the kind invitation of Mr Charles Wiwa, the nephew of Ken Saro-Wiwa, for publication in a US newsmagazine circulated to university students. Charles Wiwa is one of the parties in a U.S. Class Action lawsuit being brought against Shell in respect of its misdeeds in Nigeria.)

It is now confirmed by the reports by the U.S. Securities & Exchange Commission and the UK Financial Services Authority that the deception regarding Shell reserves started during the tenure of Shell Chairman Sir Mark Moody-Stuart. He is identified in many newspaper reports as being implicated in the reserves debacle. As will become obvious when reading this article, the news stories naming Moody-Stuart came as no surprise to me. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Royal Dutch/Shell told to pay compensation

Financial Times: R Dutch/Shell told to pay compensation

“Nigeria accounts for about 10 per cent of Shell’s production but the company’s position is seen as increasingly precarious”

By Michael Peel, FT.com, Aug 26 2004 11:40

Nigeria’s Senate has ordered Royal Dutch/Shell, the oil company, to pay $1.5bn compensation for environmental damage allegedly caused by exploration and production in the violent and polluted Niger Delta region.

The call, which comes after a similar but still unenforced recommendation by a judicial panel set up by the parliament’s lower house last year, demands a $1bn payment by Shell “forthwith” for problems including “severe health hazards”, “economic hardship” and “avoidable deaths”. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Irish Independent: Good addresses, interesting gamble

Irish Independent: Good addresses, interesting gamble

“When the oil price goes up the value of their reserves goes up, the share price goes up… and vice versa. However, Shell’s recent performance – where its reserves had to be written down and the oil giant was fined – turned that market truism on its head.”

Aug 26, 2004

THERE’S just no satisfying some investors/speculators. Undeterred by the collapse of the dotcom bubble, some risk-aware investors have been rediscovering oil companies in general and the exploration and production sector of the oil industry in particular.

Traditionally, the oil majors have been a pretty safe bet. When the oil price goes up the value of their reserves goes up, the share price goes up . . . and vice versa. However, Shell’s recent performance – where its reserves had to be written down and the oil giant was fined – turned that market truism on its head. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

The Guardian: Shell hit by $1.5bn Nigeria spill claim

The Guardian: Shell hit by $1.5bn Nigeria spill claim

Senate action on pollution adds to damage from reserves scandal

Terry Macalister

Thursday August 26, 2004

Shell has been hit by a $1.5bn (£840m) pollution claim from the Nigerian parliament 24 hours after being fined in Britain and the United States by financial regulators for “unprecedented misconduct”.

The latest bombshell was delivered by the Nigerian senate after it reviewed a compensation demand from the Ijaw tribe in the oil-rich Niger Delta.

Shell has been under fire in Nigeria for many years over its environmental record, which has been made worse by sabotage in the politically turbulent south of the country. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Shareholders could be damaged beyond repair

The Times: Shareholders could be damaged beyond repair

“Several lawyers specialising in class actions on behalf of aggrieved investors are circling the Anglo-Dutch group, which is well within the orbit of American law.”

By Graham Searjeant

August 26, 2004

AMERICA’S Securities and Exchange Commission promises to deliver even more embarrassment to the corporate heart of Royal Dutch/Shell than to its London equivalent.

For shareholders, however, the agreement of fines and the switch in emphasis to errant individuals should be an enormous relief.

Other regulators can have their say, but the main damage is clear, quantifiable, done and over with.

Except that it isn’t. The unquantifiable peril for shareholders, the one that could wreck their investment, comes from themselves. Several lawyers specialising in class actions on behalf of aggrieved investors are circling the Anglo-Dutch group, which is well within the orbit of American law. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

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. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.
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