Yahoo News: Shell warned in 2000 of possible overestimation of reserves
Thu Apr 1, 4:46 AM ET
LONDON (AFP) - Royal Dutch/Shell was warned four years ago that the oil giant ran the risk of overestimating its reserves, the Wall Street Journal Europe (WSJ) alleged.
The warning came in an internal presentation, dated June 2000, that has since been turned over to US regulators, according to a person familiar to the situation, the WSJ said Thursday.
The US Securities and Exchange Commission (news - web sites) has launched a formal inquiry into Shell after the group cut estimates for its oil and gas reserves in January.
The revision led to an investor backlash and the ousting of chairman Philip Watts. Shell has since announced a further cut in its reserves.
In a Shell document, entitled "Exploration: Overstated Delivery?, the group's own analysts wrote in 2000 that internal estimates for initial oil production at a number of projects were "very optimistic and unrelated to historical performances".
It went on to cite a number of new projects with "possibly overstated value promises", the WSJ said.