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THE WALL STREET JOURNAL: Shell Will Settle Claims Over Its Energy Reserves

By BENOIT FAUCON
March 7, 2008

LONDON — Royal Dutch Shell PLC agreed to pay about $118 million to settle claims regarding its energy reserves.

It said it reached a deal to settle claims from U.S. shareholders, complementing an agreement last year to pay close to $400 million to settle a Dutch case with European shareholders.

The settlements, if approved by the courts, would put an end to the years of litigation that followed a reserves restatement in 2004.

The U.S. lawsuit was brought by the Pennsylvania State Employees’ Retirement System and the Pennsylvania Public School Employees’ Retirement System after the oil group revealed it had overstated its proved reserves by about 20%.

The restatement led to the ousting of then-Chief Executive Philip Watts and an overhaul of the company’s corporate structure. Shell has already set aside $500 million for the settlements in the U.S. and Europe.

Under the proposed settlement, the U.S. shareholders would receive a base amount of $82.9 million, proportional to the amount payable to the plaintiffs in the Dutch settlement announced last year.

The plaintiffs in the U.S. and Dutch cases collectively would also receive an additional payment of $35 million. European plaintiffs would get $28.3 million, while the U.S. plaintiffs would receive $6.7 million.

Both the U.S. and Dutch plaintiffs would receive interest on their respective settlements, running from April 1.

The Dutch settlement, whereby Shell agreed to pay $352.6 million to shareholders and $47 million in fees to U.S. trial lawyers, was the result of European shareholders opting out of an initial U.S. class-action lawsuit. That suit was settled yesterday.

Write to Benoit Faucon at [email protected]

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