Houston Chronicle: Shell hires outside legal team
Reuters News Service
March 4, 2004, 11:42PM
LONDON — Royal Dutch/Shell, which sacked its boss on Wednesday for overbooking oil and natural gas reserves, will complete an internal reserves review within weeks and has hired outside lawyers to help, a spokesman said on Thursday.
The legal team, named for the first time as lawyers from U.S.-based firm Davis, Polk and Wardwell, has joined a handful of former and current Shell employees to conduct the review. It indicates that Shell takes seriously the possibility of a full-blown legal battle over the downgrade.
The Anglo-Dutch energy giant said Wednesday that Chairman Philip Watts and his right-hand man, Walter van de Vijver, were told to go because of "facts and circumstances" surrounding the review.
"The review is still ongoing and is expected to conclude in the next few weeks," the spokesman said. "The results will be shared with the SEC and other regulatory authorities."
On Jan. 9, Shell shocked investors by saying that 20 percent of the reserves on its books as proven were not so certain of commercial viability after all.
Its group audit committee of non-executive directors launched an immediate review of bookings and the reasons behind the 3.9-billion-barrel cut in reserves.
Some analysts fear that Wednesday's sackings suggested the review had turned up more bad news that could outweigh any positive sentiment over a "fresh start."