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The Guardian: Shell executives may face charges over oil reserves

 

Terry Macalister

Thursday March 18, 2004

 

Sir Philip Watts and other former or present Shell executives could face criminal charges related to the downgrading of oil reserves under a United States justice department investigation.

 

The inquiry is being conducted by the US attorney's office in Manhattan.

 

The investigation centres on the timing of disclosures by Shell of a 20% reduction in the scale of proven assets in locations such as Nigeria.

 

There has been speculation that internal company memos showed former chairman Sir Philip and others such as finance director Judy Boynton knew two years ago that there were difficulties over the way reserves were booked.

 

The company is already facing questions from the securities and exchange commission and other regulators about the 3.9bn barrels that have been "lost".

 

The justice department's interest ratchets up the pressure on Shell because it has the power to bring criminal as well as civil charges.

 

The US department said "we never confirm criminal investigations" while Shell declined to comment.

 

Meanwhile the Anglo-Dutch oil group said it has sold off $750m (414m) of shares in Chinese petroleum company Sinopec, the bulk of its holding in Asia's biggest refiner.

 

The move follows a similar sell-off by Shell's British rival, BP, which disposed of its 2.1% holding in Sinopec for $742m a month after divesting a similar stake in PetroChina for $1.66bn.

 

Sinopec was listed in October 2000 at HK$1.59 per share and the stock has risen 126% this year on the back of higher oil prices and heavy demand for refined products in China.

 

Shell has pretty much doubled its money, a rare success for the company in what has been probably the most turbulent year in its history.

 

On Friday the company will come under scrutiny again when it publishes its 2003 annual report.

 

The Financial Times reported yesterday that neither Sir Philip nor his ousted colleague Walter van de Vijver received bonuses last year but both men were likely to receive their contractual three months' salary.

 

http://www.guardian.co.uk/oil/story/0,11319,1172052,00.html


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