The Independent: SEC steps up inquiry into Shell oil reserves row
By Saeed Shah
20 February 2004
American regulators have launched a formal investigation into Shell's decision to slash the company's oil and gas reserves. The news increases the pressure on Shell, which is already facing a possible shareholder revolt and a raft of class-action lawsuits in the US.
The shift from an informal to a formal inquiry by the Securities and Exchange Commission gives the regulator the power to subpoena witnesses to extract information.
The future of Shell's chairman Sir Philip Watts has been a matter of debate since Shell made its shock announcement last month that proven reserves were a fifth less than previously stated. Investors have also called for Shell's complicated management structure to be streamlined.
Shell said yesterday: "The SEC has now advised Shell's legal representatives that its enquiry would proceed as a formal non-public investigation. Shell will continue to co-operate fully with the SEC's investigation."
A Shell spokesman said he did not know how long the SEC inquiry would take. Mr Watts is doing a road-show, in which he will meet many of Shell's largest institutional investors.
At the presentation of Shell's full-year results earlier this month, Mr Watts said: "On the matter of resignation, I came to my own personal decision that I should not do that. This thing happened on my watch and I have the will and determination to see us through this difficult patch."