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Milberg Weiss Announces Class Action Lawsuit Against Royal Dutch Petroleum Company 

(New York — January 26, 2004 —


The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on January 23, 2004, on behalf of purchasers of the securities, including the common stock traded in overseas markets and the American Depository Receipts trading on the NYSE, of Royal Dutch Petroleum Company (“Royal Dutch”) (NYSE: RD) and/or The Shell Transport and Trading Company, PLC (“Shell Transport”) (NYSE: SC) between December 3, 1999 and January 9, 2004, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”). A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss’ website at:


The action is pending in the United States District Court for the District of New Jersey against defendants Royal Dutch, Shell Transport, Shell Petroleum N.V., the Shell Petroleum Limited, Maarten van der Bergh, Judy Boynton , Malcolm Brinded, S.L. Miller, Harry J.M. Roels, Paul D. Skinner, M. Moody-Stuart, Jeroen van der Veer, and Philip R. Watts. According to the complaint, defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission, and all amendments thereto by issuing a series of material misrepresentations to the market during the Class Period.


The complaint alleges that defendants’ deliberately violated accounting rules and guidelines relating to oil and gas reserves which resulted in a shocking and unprecedented overstatement of oil and gas reserves, the eventual disclosure of which damaged purchasers of Royal Dutch and Shell Transport securities and rocked the investment community. The complaint alleges that Royal Dutch and Shell Transport had classified and reported, in SEC filings and other public documents, certain reserves as “proved reserves” from a project off the western coast of Australia called the Gorgon Joint Venture, and various projects in Nigeria. In fact, unbeknownst to investors, the reserves did not meet SEC and industry requirements necessary to be classified as “proved,” and were improperly reported as proved reserves in Royal Dutch’s and Shell Transport’s financial reports, thereby materially artificially inflating a key measure of the companies’ financial position and competitive standing. As a result of these material misrepresentations, Royal Dutch and Shell Transport’s true value in the marketplace was severely overstated and misunderstood.


On January 9, 2004, Royal Dutch announced that it was going to write-down its proved oil and gas reserves by 20%, or 3.9 billion barrels, from 19.5 billion barrels to 15.6 billion barrels. The write-down: (a) cut Shell’s reserve life from 13.4 years to 10.6 years; (b) increased its worldwide 5-year average reserve replacement cost per barrel from $5.49 to $12.57 --- $7.06, or 128% greater than the industry average of $5.51; (c) increased Shell’s finding and development costs to $7.90 per barrel -- well above the costs of its competitors; and (d) reduced Shell’s Appraised Net Worth downward by up to 7.1%, or $9.6 billion. Following the announcement, Royal Dutch ADRs fell 7.87% from $52.76 to $48.61 on the NYSE and Royal Dutch ordinary shares fell by 7.10% from the U.S. equivalent of $52.91 to $49.15 on the Amsterdam exchange. Shell Transport ADRs were down 6.96% from $44.81 to $41.69 on the NYSE and Shell Transport ordinary shares were down 6.84% on the London exchange from the U.S. equivalent of $7.36 to $6.86. In addition, Moody’s placed the Aaa rating of Royal Dutch and Shell Transport under review for possible downgrade because the write-down materially and adversely affected the companies’ reserves-to-debt ratio. Following the belated disclosure, most analysts and commentators concluded that, because of the magnitude of the write-down and the clear SEC and industry guidelines relating to reserve classification, the reserve overstatements could not have been a result of error or accident, but rather, that the reserves were knowingly overstated to preserve the companies’ credit rating and to shore up their competitive position.


If you bought the securities (including ordinary shares and/or ADRs) of Royal Dutch and/or Shell Transport, between December 3, 1999 and January 9, 2004 and sustained damages, you may, no later than March 26, 2004, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Milberg Weiss Bershad Hynes & Lerach LLP, or other counsel of your choice, to serve as your counsel in this action.


Milberg Weiss Bershad Hynes & Lerach LLP ( is a 190-lawyer firm with offices in New York City, San Diego, San Francisco, Los Angeles, Boca Raton, Philadelphia and Seattle, and is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and others, and has been responsible for more than $20 billion in aggregate recoveries. Please contact the Milberg Weiss website for more information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys:


Steven G. Schulman

Peter E. Seidman

Andrei V. Rado

One Pennsylvania Plaza, 49th fl.

New York, NY, 10119-0165

Phone number: (800) 320-5081




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