Royal Dutch Shell Plc  .com Rotating Header Image

No Criminal Charges for Shell over Oil Reserves

The Scotsman: No Criminal Charges for Shell over Oil Reserves

“The prosecutor also cited the fine by the SEC for violations of reporting, record-keeping and anti-trust rules.”: “Any further penalties “would likely have a severe and unintended disproportionate economic impact upon thousands of innocent Shell employees,” Mr Kelley said.”

Thursday 30 June 2005

By David Winning, PA City Staff

Oil giant Shell learned today that it would not face criminal charges from federal authorities in the United States over the overstatement of its oil and gas reserves.

A federal prosecutor in the US said regulatory fines imposed on Shell and its willingness to co-operate with the investigation meant a prosecution would not be in the public interest.

Shell stunned the market in January last year when it disclosed its reserves were 20% lower than previously thought, causing a serious slump in its shares.

It subsequently cut its estimates four more times in a crisis that claimed the scalps of chairman Sir Philip Watts, exploration and production boss Walter van de Vijver, and finance chief Judy Boynton.

The fiasco also led Shell to propose ending its twin-board structure in the biggest shake-up in its history – a move which won the backing of UK investors at the annual meeting of the oil giant in London on Tuesday.

Shell paid 120 million US dollars (£65.7m) in a settlement with the Securities and Exchange Commission in the US last year and was also hit with a £17 million fine by the Financial Services Authority – the heaviest penalty ever imposed by the UK regulator.

In a statement overnight, US attorney David Kelley announced that he had concluded “a criminal prosecution of Shell would not serve the public interest at this time”.

Mr Kelley credited Shell with co-operating with the probe launched last year into the overbooking of its proven oil and natural gas reserves by 4.47 billion barrels from 1997 to 2002.

The prosecutor also cited the fine by the SEC for violations of reporting, record-keeping and anti-trust rules.

As part of its settlement with the SEC, Shell agreed to spend five million US dollars (£2.7m) on developing a comprehensive internal compliance programme.

Any further penalties “would likely have a severe and unintended disproportionate economic impact upon thousands of innocent Shell employees,” Mr Kelley said.

A Shell spokesman said: “We are aware of the decision taken by the Department of Justice and pleased that our co-operation has been appreciated, but can’t comment any further.”

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.

0 Comments on “No Criminal Charges for Shell over Oil Reserves”

Leave a Comment

%d bloggers like this: