How a gripe website kicked the world’s greediest oil giant where it hurts

How a gripe website kicked the world’s greediest oil giant where it hurts: the Donovan playbook that helped expose Shell’s 2004 reserves fraud

Royal Dutch Shell’s 2004 reserves scandal was not just a numbers fiasco; it was a morality play in hard hats. Shell—ultimate sin stock and serial planet-frier—admitted it had been boasting about barrels it didn’t actually have. Regulators pounced, executives walked (some under escort), investors sued worldwide, and a pesky website run by John Donovan became an improbable clearinghouse for witnesses, whistleblowers, and the lead shareholder who fronted a global class action.

The fraud in one line (Shell’s own regulators said it)

The U.S. Securities and Exchange Commission put it starkly: Shell overstated proved reserves “by 4.47 billion barrels of oil equivalent, or approximately 23%.” Shell paid a $120 million civil penalty to settle. That’s not commentary, that’s the government.

The U.K. Financial Services Authority (now FCA) also issued a Final Notice (and fine) over the misstatements, the kind of reading that pairs well with a strong coffee and stronger compliance program.

Donovan’s website: the unexpected switchboard for justice

From the outset of the U.S. litigation, Bernstein Liebhard & Lifshitz (lead counsel) used the Donovans’ anti-Shell website to generate witnesses and evidence—that’s their contemporaneous account of how they worked the case.

The site wasn’t just a megaphone; it was a net. An Oxford-published case study records that a non-U.S. shareholder, Peter M. Wood, was recruited into the U.S. class action “through an appeal on the website.” Wood went on to serve as lead plaintiff for the class in key proceedings, with Bernstein Liebhard appearing for him in depositions and filings.

And Donovan’s archives still host a library of court papers and depositions (Shell insiders under oath) from In re Royal Dutch/Shell Transport Securities Litigation (D.N.J.)—a paper trail Big Oil would prefer you didn’t browse.

The site didn’t just surface Peter M. Wood; it also chronicled the work of his son, James G. Wood—“a tenacious litigant against Shell”—who, as Donovan records, “brought proceedings against Shell in the USA for alleged IP theft” and later pursued related action in the Netherlands. See: The untimely death of Mr James G. Wood, tenacious litigant against Shell (May 12, 2019). 

The whistleblower Shell tried to gag: Dr John Huong

If you want to know how Shell treats inconvenient truth-tellers, read the Malaysian court papers aimed at Dr John Huong, a former Shell geologist and early reserves-scandal whistleblower. In 2006, Shell entities pursued contempt against him over postings and an affidavit circulated via the Donovan site. The “Notice to Show Cause” quotes Huong’s message to Shell’s ethics chief: “I am being sued by eight companies of the Royal Dutch Shell Group for alleged defamation.” It goes on to record that Huong “sent a detailed write-up… which [he] called an ‘affidavit’, to Alfred Donovan,” and that Donovan published “The Persecution of Dr John Huong by a Multinational Giant.” Shell wasn’t amused; the court record speaks for itself.

What the emails said (and why investors revolted)

Contemporaneous reporting captured the internal panic vividly. One headline tells the story: “Trail of emails reveals depths of deceit at the heart of Shell.” Among the exhibits was an internal warning that a memo was “absolute dynamite, not at all what I expected and needs to be destroyed.” This was not a great look for a company that likes to talk about “trust.”

The payouts (and who got paid)

• U.S. SEC case: $120 million penalty; later, the SEC announced a $113.5 million Fair Fund distribution to more than 84,000 investors worldwide.

• European (non-U.S.) investors: Shell agreed to pay $352.6 million (WCAM settlement later declared binding by the Amsterdam Court of Appeal).

• U.S. shareholder class action (D.N.J.): Bernstein Liebhard reports a $161.6 million recovery for U.S. shareholders (plus $28.34 million for members of a European class that separately settled with Shell for > $350 million).

Add it up and you’re looking at hundreds of millions in fines and settlements flowing from a single, very creative approach to “proved” reserves.

The executive fallout: who left, and how

The heads rolled quickly: Chairman Sir Philip Watts and E&P chief Walter van de Vijver resigned in March 2004; CFO Judy Boynton left in April. Multiple outlets reported that Sir Philip Watts was escorted from Shell Centre by security—not exactly the farewell tour he had in mind.

And in a twist made for British satire, Watts later took holy orders and became a Church of England priest (ordained 2011; Priest-in-Charge at Waltham St. Lawrence by 2013). Forgive us, Father, for we have audited.

Who still bankrolls Shell?

Despite the scandals and the smoke, Big Finance can’t quit Big Oil. BlackRock and Vanguard sit among Shell’s largest shareholders by recent disclosures—an institutional embrace that ensures the dividend checks clear while externalities pile up.

“The Donovan effect” in plain terms

• Donovan’s site gave lead counsel a living database—witnesses, insiders, and the lead non-U.S. shareholder (Peter M. Wood)—all in one place, at speed.

• It offered whistleblowers like Dr Huong a platform when conventional channels failed—documented in black-and-white court filings.

• It preserved an open archive of legal documents that journalists, regulators, and investors could (and still can) quote chapter and verse.

Some of the most telling headlines (with links)

• “SEC Settles Securities Fraud Case… Involving Proved Reserves Overstatement of 4.47 Billion Barrels”(Aug. 24, 2004).

• “FSA Final Notice” imposing a market-abuse fine on Shell (Aug. 24, 2004).

• “Trail of emails reveals depths of deceit at the heart of Shell.” (The Guardian, Apr. 20, 2004).

• “Sacked Shell boss ‘escorted from HQ’.” (The Telegraph, Apr. 23, 2004).

• “Shell to pay $353 million in overbooking settlement.” (Reuters, Apr. 11, 2007).

Key legal documents you can still read

• SEC Litigation Release / Order (facts, figures, violations).

• FSA/FCA Final Notice (the U.K. regulator’s view).

• U.S. case materials: deposition transcripts and filings (e.g., counsel appearances on behalf of lead plaintiff Peter M. Wood).

• Memorandum supporting Peter M. Wood’s intervention (D.N.J.).

• Dutch WCAM settlement analyses / reports (Shell’s non-U.S. settlement made binding in Amsterdam).

• Dr John Huong “Notice to Show Cause” filings (Malaysia).

What this adds up to

A 23% phantom-reserves bulge; emails that read like a corporate true-crime script; executives resigning and one re-emerging in a dog collar; hundreds of millions in fines and settlements—and, at the center of the information flow, a modest website that helped plaintiffs’ lawyers stitch together the case, surface whistleblowers, and recruit the very shareholder who became the class’s public face. If you’re looking for a case study in how accountability is actually built—slowly, publicly, and sometimes cheekily—this is it.

Related:

Christopher Hodges, The Reform of Class and Representative Actions in European Legal Systems: A New Framework for Collective Redress in Europe (Hart Publishing: Oxford and Portland, Oregon, 2008), esp. pp. 75–76. The case study includes the line: “A non-US shareholder, Mr Peter M Wood, was recruited into that action through an appeal on the website (http://www.royaldutchshellplc.com accessed 10 June 2008).” 

For reference:

• Publisher/book page (Bloomsbury / Hart): 

• Extract as posted on the Donovan site: 

Disclaimer

Warning: satire ahead. The criticisms are pointed, the humour intentional, and the facts stubbornly real. Quotes are reproduced word-for-word from trusted sources. As for authorship—John Donovan and AI both claim credit, but the jury’s still out on who was really in charge.

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net, and shellwikipedia.com, are owned by John Donovan - more information here. There is also a Wikipedia segment.