The Scotsman: Claim Shell bosses warned on 'over-optimistic' projections
MARTIN FLANAGAN CITY EDITOR
EMBATTLED Shell yesterday batted away allegations that its top executives knew as early as 2000 that the oil giantís projections for worldwide exploration and production projects numbers were over-optimistic.
Citing allegedly internal Shell documents, the Wall Street Journal said planners warned leading company managers that the group was in danger of disappointing financial markets with optimistic assumptions.
The warnings were part of a June 2000 internal presentation known to Shellís senior executives, said the WSJ.
But a Shell spokesman said: "We have been asked by the group audit committee to defer responding to issues related to the facts and circumstances that led to the reserves recategorisation announcement on 9 January until the completion of its review. At that time the main conclusions will be made public."
It has been reported that the key presentation in June 2000 is among documents recently uncovered and turned over to US watchdog the Securities and Exchanges Commission.
Shell shocked the City by revealing in January that it had over-estimated its proven reserves of oil and gas by 20 per cent. It then reduced its estimates again in March.
However, it is understood the latest document refers to internal concerns about overly-optimistic assumptions about wider exploration and production projects, not just estimates of reserves. Shell would not comment.
The companyís group audit committee was set up in the wake of the reserves fiasco, which has already claimed the scalps of executive chairman Sir Philip Watts and the head of exploration and production, Walter van de Vijver.
The committee is made up of six non-executive directors, with access to all internal documents and independent legal counsel.
The news came as Nigeriaís top energy official said the oil groupís reserves in the country had fallen by 1.9 billion barrels, more than the 1.3 billion barrels earlier thought.
Edmund Daukoru, the Nigerian presidential adviser on petroleum,
said: "The Shell figure means that Nigeriaís total reserves are down by 6 per cent, which is considered to be within the margin of error."
He said much of the downgrade was due to oil trapped under gas caps, which is expected to be exploited but has not yet been approved.