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(Source Page 157 of Shell 2007 Annual Report)

Groundwater contamination

Shell Oil Company (including subsidiaries and affiliates, referred to collectively as SOC), along with numerous other defendants, have been sued by public and quasi-public water purveyors, as well as governmental entities, alleging responsibility for groundwater contamination caused by releases of gasoline-containing oxygenate additives. Most of these suits assert various theories of liability, including product liability, and seek to recover actual damages, including clean-up costs. Some assert claims for punitive damages. As of December 31, 2007, there were 79 such suits pending against SOC and many other defendants (including major energy and refining companies). 72 of those matters have been consolidated for pre-trial proceedings in the US District Court for the Southern District of New York and seven are pending in other state and federal courts.

SOC (including its subsidiaries and affiliates) and certain other defendants have entered into an agreement in principle with certain plaintiffs to settle 59 cases (53 of which are brought by public, quasi-public, or governmental water purveyors). Upon execution of the settlement agreement, the parties will seek court approval of the settlement and dismissal of all claims against SOC and others in the 59 cases. In the fourth quarter of 2007, management of the Shell group established a provision of $35.7 million, representing an amount approximating SOC’s share of the proposed settlement. Motiva Enterprises LLC, one-half of which is owned by subsidiaries of SOC, has established a provision of $27.2 million, representing an amount approximating Motiva’s share of the proposed settlement.

If the settlement described above is approved, 26 water purveyor matters will remain. These matters are at a preliminary stage. Proceedings were effectively stayed in 24 of the cases and no discovery or other activity has occurred in them. In the other two cases, discovery has barely begun. Thus, the extent of alleged contamination and damages claimed as a result are not known. Further, it has not been determined whether product liability may be imposed and, if so, how liability might be apportioned among the many defendants or whether punitive damages might be available. At present, there are no deadlines for discovery, dispositive motions, or trials in any of the 26 cases that are not included in the settlement agreement in principle. A number of these matters assert damages from contamination threats, rather than actual contamination. Management of the Shell group believes that SOC has no liability in respect of threat-only claims. In 2007, SOC defended a suit brought by the Plainview (New York) Water District (Plainview) in which damages were sought for threats, but no actual damage, to water wells. After a multi-month trial, the Nassau County Supreme Court dismissed Plainview’s claims.

In light of the foregoing, management of the Shell group does not currently believe that the outcome of the remaining oxygenate-related litigation pending as of December 31, 2007 will have a material impact on the Shell group. and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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