Daily Mail: Shell attacked from all sides
26 April 2004
Posted 28 April 04
OIL giant Shell urgently needs to embark on a damage limitation offensive with investors before regulatory probes and lawsuits send the crisis spiralling out of control.
The company is under pressure to fast track its review into the confusing Anglo-Dutch corporate structure, which was due to be presented by the end of June. It is thought to be considering hiring a major Wall Street firm such as Citigroup or Goldman Sachs to oversee the shake-up.
Friday's announcement by the Financial Services Authority* that it is conducting a formal investigation into the overstatement of oil reserves has heightened tensions.
Reports of a Department of Trade and Industry probe have been played down by Whitehall insiders.
Some fear there are more skeletons to emerge from the damning internal report conducted by independent lawyers Davis Polk & Wardwell. Other Shell executives may be implicated.
A report in the Mail on Sunday suggested that chairman Jeroen van der Veer and deputy Malcolm Brinded were almost sacked over their role in the reserves scandal.
So far, most fingers have pointed at former chairman Sir Philip Watts, rather than the company's institutionalised culture.
To add to the gloom, rival BP is expected to announce this week that its oil and gas production will overtake Shell this year.
Shell is already facing 15 multimillion-dollar lawsuits in the US and the prospect of huge fines from regulators. Executives could be prosecuted. Auditors KPMG and PricewaterhouseCoopers are also in the spotlight.
Shell said: 'We are co-operating with various regulatory authorities including the Securities and Exchange Commission, the US Department of Justice and the FSA.'