The Guardian (UK): Shell escapes charges over reserves reporting
Mark Tran
Thursday June 30, 2005
Shell escaped criminal charges in the US today after a federal prosecutor decided that bringing the Anglo-Dutch oil giant to court over last year’s reserves scandal would not be in the public interest.
US lawyer David Kelley said yesterday that the world’s third-largest publicly traded oil company had cooperated with an investigation after admitting to an overstatement of its proven oil and natural gas reserves by 4.47bn barrels, or about 23%, from 1997 to 2002.
The prosecutor also cited Shell’s payment of a $120m (£66.9m) fine imposed by the securities and exchange commission (SEC), the US financial watchdog, for accounting fraud.
Under the SEC settlement, Shell also agreed to spend $5m on an internal compliance program. Any further penalties “would likely have a severe and unintended disproportionate economic impact upon thousands of innocent Shell employees,” Mr Kelley said.
The reserves debacle triggered the gravest crisis in Shell’s history, leading to the resignation of the chairman Sir Philip Watts, the exploration and production boss Walter van de Vijver, and the finance chief Judy Boynton.
Because of the crisis, Shell scrapped its unwieldy dual board structure, a move that was overwhelmingly approved by shareholders in the UK and the Netherlands earlier this week. Royal Dutch Shell, as it will be called, will now have just one board of directors.
Royal Dutch Petroleum owned a 60% interest in the group and Shell Transport and Trading in the UK had a 40% interest. The company will now have one share instead of two and will be listed in London but headquarted will be in the Hague.
“Shell appreciates US attorney Kelley’s decision. The conclusion of this investigation is a most important step toward putting the matter of the reserves recategorisations behind us,” said the company’s chief executive, Jeroen van der Veer.
http://www.guardian.co.uk/business/story/0,3604,1518254,00.html
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