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The Daily Telegraph: Figures as slippery as the black stuff

 

Shell cuts reserves by another 470m barrels

 

When things start to go wrong, they really do go wrong, and nobody is finding this out faster than the senior executives at Shell, who yesterday had to endure another public grilling after the company admitted to yet more problems with its reserves.

 

For an organisation which has traditionally treated the City with indifference bordering on contempt, this is particularly painful. Outsiders may have found the bureaucracy impenetrable, but at least, we all assumed, those inside could count. Now, it seems, we were wrong.

 

Yesterday Shell wheeled out its new top brass in force to admit that they don't yet know how much oil and gas they've really got, but it's probably less than they thought. The best guess is not reassuring. It looks as though the company replaced only four out of every five barrels of oil that it sold last year, a miserable performance from a business which must replace its reserves or die.

 

Shell is very far from death's door, and yesterday the executives even pointed to other big companies which take more optimistic views of the probability of finds turning into fields.

 

Yet the impression it gives is of a group which is paralysed by crisis, rather as the BBC was following the Hutton report.

 

This sort of thing may happen to others, but it just doesn't happen to such a long-standing institution, safe in its Thames-side ivory tower, and far too big for anyone to contemplate taking over, even if they could unlock the Royal Dutch/Shell share structure.

 

As the workers ought to be saying to each other by the water-coolers: Oh, Shell!

 

neil.collins@telegraph.co.uk

 

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2004/03/19/ccom19.xml&sSheet=/money/2004/03/19/ixcoms.html#3

 


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