Financial Times: Shell chief explains absence
By Carola Hoyos and Joanna Chung
Jan 17, 2004
Sir Philip Watts, embattled chairman of Royal Dutch/ Shell, yesterday broke his silence for the first time since failing to appear when the oil company announced it was slashing its proved reserves by 20 per cent.
In a letter to employees, he acknowledged the unprecedented move had caused "significant concern" and "in some quarters, outrage".
The chairman, whose future was put in doubt this week when some shareholders called for his resignation, assured his staff that he was "committed to the full resolution of this issue as soon as possible".
He also offered a reason for his absence during the announcement last week, hinting that his strained relations with investors could have overshadowed the facts.
"Since the announcement involved a technical recategorisation, and we could not add any further market-sensitive information, I did not participate in the 9 January teleconference," he wrote.
"Given subsequent reactions, to some this might not seem to have been the correct decision but we did achieve the objective of giving the facts unclouded by personality issues in the first instance."
In the past, shareholders had criticised Sir Philip for having poor communication skills, a "brusque" manner, and a defensive reaction to difficult questions.
He admitted that process of reserves accounting, one of the most important things an oil company does, had been flawed at Shell.
Sir Philip said the decision to recategorise the reserves was triggered by internal processes rather than by the US Securities and Exchange Commission.
About half of the reclassified reserves were in Nigeria and Australia.
Sir Philip said individuals who worked on the bookings had done so "in good faith". There was "no evidence of any misconduct", he said.
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