The Wall Street Journal: Shell: US Dept Of Justice Now Involved In Reserves Flap
DOW JONES NEWSWIRES
March 23, 2004 1:57 p.m.
LONDON -- Embattled oil company Royal Dutch/Shell Group (RD, SC) on Tuesday said that it had been contacted by the U.S. Department of Justice, potentially opening a new investigative front on its handling of a massive cut in its estimated oil and gas reserves.
Shell spokesman Andy Corrigan said DOJ officials contacted the Anglo-Dutch oil company's lawyers Friday, just a day after Shell 's chairman denied he was aware of a new probe by the judicial authority.
"On Friday, March 19, a representative of the U.S. attorney's office in Manhattan contacted our outside counsel in the U.S. and asked to be briefed on information we have previously provided to the SEC," he said.
"We have agreed to meet and to do so," Corrigan added, declining to field any questions.
Shell is being represented by U.S. lawyers Debevoise & Plimpton.
The admission that the DOJ has asked to become involved in the circumstances of Shell 's reserves downgrade represents a fresh blow to the company's under-pressure managers.
The Department of Justice has the authority to launch criminal proceedings against current and former company directors suspected of breaking the law. The authority of the U.S. Securities and Exchange Commission, the U.S. securities watchdog, extends only to suspected civil wrongdoing.
Corrigan said he was unaware whether the DOJ's contact last week had led to the launch of criminal proceedings.
The DOJ couldn't immediately be reached for comment.
Shell 's reserves woes began Jan. 9 when it shaved its proved oil and gas reserves - deposits to be developed within a short time frame - by 20%, or 3.9 billion barrels of oil and gas.
Company shares fell 8%, and last week dropped another 5% when the company said another 470,000 barrels of proved oil and gas reserves would have to be downgraded after a preliminary internal review.
Shell 's actions have sparked a flurry of lawsuits in the U.S. alleging the company willfully misled the public about its reserves position between December 1999 and January 2004.
The company has dismissed two top executives connected with issue and is under pressure to remove more, as well as to overhaul its cumbersome, dual-board corporate structure.