The Wall Street Journal: Ex-Shell Official Says He Warned About Reserves
By CHIP CUMMINS
Staff Reporter of THE WALL STREET JOURNAL
April 14, 2004; Page B2
LONDON -- Walter van de Vijver, ousted last month as Royal Dutch/Shell Group's chief of exploration and production, said he took repeated action as early as 2001 to bring the company's energy-reserves problems to the attention of the oil giant's top management.
In the first public comments from one of the two executives at the center of Shell's reserve troubles, Mr. van de Vijver points blame at the highest levels of the company, saying he urged public disclosure of shortcomings in the reserve estimates early on.
Read Walter van de Vijver's statement; Adobe reader is required.
Shell disclosed on Jan. 9 that it had overbooked oil and natural-gas reserves that it reports to the Securities and Exchange Commission and would slash its tally by 20%. Reserves are deposits of oil and gas that a company expects to economically exploit, and they are an important gauge for investors of an oil company's performance and value.
The SEC and other regulators are investigating.
Earlier this year, Shell's audit committee, along with a team of outside lawyers, began an internal review. Last month, the boards of Shell's two parent companies ousted Chairman Philip Watts and Mr. van de Vijver, citing a loss of confidence in the two men. The boards acted after being briefed on the initial findings of the review. The parents are Royal Dutch Petroleum Co., of The Hague, and London-based Shell Transport & Trading Co.
Mr. van de Vijver, in a nine-paragraph statement released by his attorney Tuesday afternoon, said recent news reports have portrayed his role in the reserve controversy "inaccurately or incompletely." The Wall Street Journal reported Monday that the audit committee's draft report about the reserves overbooking faults Sir Philip and Mr. van de Vijver for failing to disclose the reserves problems early enough, citing a person familiar with the situation. (See Monday's article.)
Shell's two boards haven't yet signed off on the report's findings.
In his statement, Mr. van de Vijver said he identified shortcomings in Shell's reserve reporting at the beginning of his tenure as head of exploration and production, which started in July 2001. He said that he immediately reported his findings to Shell's Committee of Managing Directors, the company's top management team.
Mr. van de Vijver's attorney said he wasn't available for further comment and had nothing more to add to his statement. Repeated attempts to reach Sir Philip and Mr. van de Vijver in the weeks following their ouster have been unsuccessful.
A Shell spokesman declined to comment on the reserves issue until the completion of the audit committee's review.
---- Alexei Barrionuevo in Brussels contributed to this article.
Write to Chip Cummins at email@example.com