Edinburgh Evening News: Damning report shows Shell hid reserves shortfalls
20 April 04
EXECUTIVES at oil giant Shell knowingly hid a shortfall in reserves from
investors for several years and then attempted to cover up the scandal by
ordering "dynamite" documents to be destroyed, an independent review of the
business has found.
The news came as Shell cut reserve estimates again and said a third senior executive, chief financial officer Judy Boynton, had stepped down.
In total, 4.35 billion barrels of reserves for 2002 have been deducted since the start of the year.
The eagerly-awaited report, commissioned by non-executive directors in the aftermath of the reserves debacle and compiled by United States law firm Davis, Polk and Wardwell, unearthed memos in which one executive talked of his "lying" and about how the firm had "fooled" the market.
It also showed that internal audits on booking reserves - a crucial measure of value in the oil industry - were undertaken by a single former Shell employee working part-time.
Shell chairman Lord Oxburgh said the "difficult findings" had been accepted in full, adding: "Shell simply cannot allow this to happen again."