The Scotsman: Troubled Shell ousts exploration unit's finance chief
Fri 9 Apr 2004
FURTHER senior level upheaval at troubled oil major Shell was announced yesterday, with the ousting of Frank Coopman as chief financial officer of the group’s exploration and production unit.
The division has been at the heart of a controversy about over-estimated oil reserves that has already claimed the scalps of the former executive chairman of Shell, Sir Philip Watts, and the head of exploration and production, Walter van de Vijver.
The British-Dutch group said yesterday that Coopman will be replaced by Simon Henry, 42, currently head of Shell’s investor relations.
It is unclear whether Coopman will be reassigned to a new position within the oil group or leave with a payoff.
A spokesman declined to comment on the reasons for the proposed reassignment of Coopman.
But disclosures this year about Shell’s flawed accounting of reserves in its exploration and production division have prompted investigations of the company by the Securities and Exchange Commission in the US, the Financial Services Authority in the UK, and their Dutch counterpart. A company statement yesterday said: "Frank has been offered a key alternative position in Shell which he chose not to accept.
"We will continue to work towards a mutually acceptable alternative."
Coopman, the chief financial officer for the exploration and production unit since 2002, could not be reached for comment. A Shell spokesman would not comment on Coopman’s remuneration or contractual details "because he is not a board member".
As the top financial executive for Shell’s E&P upstream business, Coopman reported to van de Vijver until his boss’s departure.
Shell admitted in January that an internal audit had discovered that it had overstated its reserves, primarily in Nigeria and Australia, by 20 per cent - sending its shares on the stock market spiralling down.
The company issued another reserves cut in March which, while not as radical as the first, again undermined investor confidence.
Ironically, Shell has also been criticised by shareholders over its handling of investor relations, Henry’s previous domain.
Shell said yesterday that it would fill the investor relations position as soon as possible.
The company has appointed an audit committee with outside counsel to conduct an internal review into the circumstances of the reserves downgrade that severely shocked the stock market.
Proven reserves are taken as a good barometer of an oil company’s medium- to long-term profitability.
Shell has said the review will be completed in the next few weeks and will be turned over to the SEC, while the review’s main findings will be made public.
Shell’s shares closed 2.25p ahead at 369.5p. They have lost 8 per cent in value since the start of 2004.