Houston Chronicle: Shell is hoping to book disputed reserves again: Fields off coast of Australia had been overstated: “Shell, based in London and the Hague, last month said its oil and gas reserves as of 2002 were overstated by 41 percent, the culmination of five cuts that led to investor lawsuits, the loss of three senior executives and more than $150 million of fines. The Justice Department is conducting a criminal inquiry.” (ShellNews.net) Posted 8 April 05
By MATHEW CARR
The Royal Dutch-Shell Group of Companies, Europe's second-largest oil company, may begin booking reserves after the middle of next year at Gorgon, the fields offshore Australia at the center of an overstatement of its holdings.
Shell, based in London and the Hague, last month said its oil and gas reserves as of 2002 were overstated by 41 percent, the culmination of five cuts that led to investor lawsuits, the loss of three senior executives and more than $150 million of fines. The Justice Department is conducting a criminal inquiry.
"We'll book greater Gorgon reserves when all Securities and Exchange Commission requirements are met" to recognize reserves, Simon Buerk, a Shell spokesman, said Wednesday. "One milestone is taking the final investment decision, and that's currently planned for mid 2006."
ChevronTexaco, the second-biggest U.S. oil company, said earlier Wednesday the $8.4 billion Gorgon LNG venture should find customers more easily after an agreement to include two Exxon Mobil fields in the project and change the shareholdings of those companies and Shell.
Under the restructuring, ChevronTexaco's share of Gorgon falls from about 57 percent to 50 percent, while Shell's stake drops from 28.6 percent to 25 percent. Exxon Mobil, which owned half of the Jansz field, increases its stake from 14.3 percent to 25 percent.
Shell will receive 25 percent of Jansz under the plan.
Shell had recognized more than 500 million barrels of reserves from the project since 1997, before the venture's partners made the final decision to proceed. Shell's audit of the overstatement, released in April of last year, centered on missteps at Gorgon and in Nigeria, Oman and Brunei.
The audit report quoted Shell's reserves coordinator saying that the booked Gorgon reserves "stuck out like a sore thumb" because they were recognized early, but removing them from the accounts was "too big to swallow."
"We currently have no proved reserves in the greater Gorgon area," said Buerk, declining to say how many reserves the group may book.
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