Tallahassee.com: Shell shaken by execs' dishonesty on holdings
By Beth Gardiner
THE ASSOCIATED PRESS
Posted on Wed, Apr. 21, 2004
LONDON - Revelations about dishonesty at the highest levels of the Royal Dutch/Shell Group of Cos. could prompt badly needed reforms, but the shaken oil giant will have to work hard to regain investor confidence, analysts said Tuesday.
A company-commissioned investigation released this week found some bosses knew about problems with the figures for nearly two years and exaggerated the numbers knowingly - news that stunned many in the oil and financial worlds.
"All of us ... were giving Shell the benefit of the doubt, that there may have simply been some confusion," said Thomas Ajamie, a Houston, Texas, securities law expert. "The revelations are shocking, the extent to which some of the executives knew what they were doing."
Shell came under scrutiny in January, when the company announced its confirmed oil and gas holdings were 20-percent, or 3.9billion barrels, smaller than it had previously claimed. Shareholders were outraged, and three top executives resigned, including chairman Sir Philip Watts and finance chief Judith Boynton.
Since then Shell has further reduced its estimates of "proven" holdings, mostly recently on Tuesday, bring the total downgrade to 4.85billion barrels - a number the company said was nearly final.
The results of Shell's internal investigation showed Watts urged Walter van de Vijver, then chief of the company's exploration division, to keep proven reserve estimates high.