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Whistleblower 2004 email on Shell reserves scandal

Honesty and Integrity once the pillars of culture in the Shell Group, no longer appear to exist.

John Scruton

Extracts from an email we received from Shell Whistleblower Dr John Huong (some personal information omitted)

From: huong john <[email protected]>
Date: 18 August 2004 14:00:32 GMT+01:00
To: John Donovan <[email protected]
Subject: RE: FW: SHELL WHAT ELSE no3

Dear Mr. Donovans,

Good evening. I pray that you are both in the best and that Mr. Donovans Senior have been to see the doctor for a check up.

I got news from my lawyers that the affidavit that was filed was acknowledged by the High Court and that they have written to the Shell Lawyers informing them of the application.  The Shell Lawyers have two weeks to respond from yesterday and the hearing will take place on 21st September 2004. After the case is set aside I will again start to contribute to your website if Shell is not going to start talking like gentlemen!

Since I am unable to read the official Chinese language (Mandarin), I will get someone to translate them.

So Mr. Richard Wiseman was very unhappy with the news postings of the no nonsense evidence against Shell Senior Management?

Just now I was surfing through Tell Shell and I came across two postings which I believe I have not seen before. The article by John Scruton is very telling on the timeline and Shell Leadership when the crisis started to evolve and develop and subsequently erode staff who carried many years of Shell’s memory as a long time employee.

The article by Lloyd Taylor, he is probably the same person whom I knew when he was the Exploration Manager for Sarawak Shell Berhad/Sabah Shell Petroleum Co., Ltd when the Kinabalu Field was discovered.

These articles are very interesting in shedding much light into the leadership pertaining to strategic and operational aspects of adding and/or not adding reserves in Shell Operations.

I hope you find this story and many more interesting to the complex business of adding/reducing hydrocarbon reserves.

Thanks,
John

POSTINGS ON TELL SHELL

John Scruton: Current Crisis in the Shell Group – Delve Deep: 21 Apr 2004 07:55

I would suggest that the current crisis is but a symptom of greater underlying problems within the Shell Group. The move over the past 10 years to restructure the organisation and centralise control at levels where there is little understanding of the real issues at local operational levels, is probably a major factor in contributing to the management style currently prevailing in the Group. Honesty and Integrity once the pillars of culture in the Shell Group, no longer appear to exist.

As a major corporate shareholder has stated, the Group has under performed in then past 10 years!

The past 10 years have been a disaster within the Group as changes have been forced upon the organisation, without course to the consequences of such changes. Centralised control is not a culture that should prevail in an organisation where good initiatives and sound planning principles should be normal practice. Too much power is placed in the hands of individuals who do not have the necessary skills or disciplines to manage such a wide scope of responsibilities.

A once great organisation has allowed itself to be hijacked by the politically correct and so called innovative thinkers of modern organisational structure. This has been a disaster for the company not only in E & P but, in other areas of its business, and also on the effect on employees. The continual changes imposed without any thought of the real benefits has had a detrimental effect on the Group’s business and reputation.

There are many managers in the Shell Group and not enough good leaders (there is a difference!). It is time to review the management structure and organisation of the Group, not only at the top but throughout its organisation, down to national levels.

The current crisis is deeper than the problems at the top, and management behaviour throughout the organisation needs to be overhauled. There needs to be an acceptance of much greater accountability at all levels of management (Leadership!) throughout the company

John Scruton

********************************************************

L Taylor: Credibility and Reputation: Reserves Booking Responsibilities: 17 Apr 2004 02:00

Rightly, the response of the two Boards of Directors of Shell to the matter of the substantive and recurring overstatement of oil and gas reserves, and the subsequent poor process of disclosure to the market, has been to hold accountable two of the most senior leaders of the company. These leaders played a pivotal role in defining the business culture and in ensuring the inadequate oversight of the systems, processes and people that led to the situation.

However, the problem is clearly larger than the two dismissed leaders, and is not solved by the dismissals.

Shell E&P runs extensive peer review processes, under the direction of Regional Business Directors and a Technical Director, all of whom were members of the EP Executive Committee at the time the oil and gas reserves of the company were overstated. Were these people asleep on the job? Were they complicit in the overstatement of reserves, receiving financial and or career incentives as a result? If not, then what is the explanation for the failure of the governance process in the Shell EP business and what is to be done?

I suggest that the solution involves fundamental attitudinal change, to address the requirement for greater individual accountability at all levels of leadership in the company. This is at the heart of the current credibility crisis and the degree to which it is met will determine the long-term viability of the Shell EP business.

Regards
Lloyd Taylor

Dr John Huong: an employee of Shell Malaysia for 29 years.  Dr Huong was the Shell Production Geologist who blew the whistle internally on senior managements deliberate inflation of claimed proven hydrocarbon reserves.

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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