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Jean Lemierre / Photo from
Jean Lemierre, President, European Bank for
Reconstruction and Development/Photo from An Open Letter to Jean Lemierre, President, European Bank for Reconstruction and Development, regarding Shell's Sakhalin II loan application: "Perhaps if more time had been spent on project management rather than ego and status driven pursuits and personal enrichment by Shell senior management, Shell would not be in the almost perpetual state of crisis which its stakeholders have witnessed in recent years.": Sunday 4 December 2005: 00.15am EST 

From Alfred Donovan

Dear Sir

Re: Sakhalin II loan application

I have been following with interest the progress of the loan application to the European Bank for Reconstruction and Development from Sakhalin Energy in respect of the Sakhalin II mega-project. I am the co-owner of a unique website,, which contains over 6,500 web pages of information focused on the lead partner in the Sakhalin II consortium, Royal Dutch Shell.

It seems to me that the fundamentally important issues of competence, judgement and honesty must all be crucial factors in deciding whether to place the banks trust in Shell management, bearing in mind its leadership role in the Sakhalin Energy consortium. In other words, can Shell management be trusted to comply with undertakings given in respect of health, safety and environmental issues in relation to the Sakhalin II mega-project? I believe the answer is a resounding NO and will explain my reasons for saying so.

I can testify from personal experience to the issue of competence. Due to an incredible blunder by Shell management, the website also operates under the domain name of which happens to be the dotcom name of their new $200 BILLION unified company, ROYAL DUTCH SHELL PLC. The domain name was available before the company name was released into the public domain, but Shell neglected to register it. The subsequent ill conceived attempt by Shell's lawyers to seize the domain name by issuing proceedings against me in May 2005 ended in further humiliation for Shell. An article in the The Wall Street Journal was but one of many embarrassing reports in major publications around the world.

The domain name debacle was a frivolous but illuminating example of the gross ineptitude of Shell senior management which has resulted in Shell sliding down the ranks of the super-major oil giants, from number one to number three, with it now being viewed as a wounded beast and consequently a potential takeover target. However, Shell is in such a mess, plagued with incompetent management, huge cost overruns on projects in Canada, Nigeria and Russia, continuing litigation and investigations arising from the reserves fraud, demoralised employees, and a shortage of reserves, that it may not be a particularly appetising catch. 

In relation to the fundamentally important issues mentioned above, I would also respectfully draw your attention to my recent email to President Vladimir Putin of Russia which sets out some information about which you may be unaware.  For example, did you know that 11 out of the 15 member board of Royal Dutch Shell Plc are tainted by what has been described as the biggest investor fraud in history - the Shell reserves fraud for which Shell shareholders have already paid over a quarter of a BILLION (USD) in financial regulator fines, class action settlements and legal costs. My email to President Putin also reveals that a reliable insider source at Shell says that management is aware that the ultimate cost for the project could be $26 BILLION (USD), not the revised $20 BILLION figure, which itself was double the original estimated cost. In my recent correspondence with Shell International General Counsel, Mr Richard Wiseman, he did not take the opportunity to deny the $26 BILLION figure. Dire warning to President Putin about $26 BILLION overrun on Sakhalin2 project: Friday 25 November 2005: 04.30am EST: READ

Please note that we have a number of reliable sources. Testimony to the accuracy of the information being published on is the fact that on Tuesday we reported news of the one month deferment of the EBRD decision days before the news broke elsewhere.


Reading through the information on your website ( I noticed the section dealing with the enlightened attitude of the EBRD to whistleblowers. The EBRD encourages and protects whistleblowers. This is a strikingly different policy to Shell where there is a climate of fear among employees designed to deter and severely punish such activity. The deeply ingrained corporate culture of deceit and cover-up at the highest levels of Shell management was of course a major factor in the reserves fraud which ruined Shell's once proud reputation, which is now on a par with the likes of Enron. However, Shell management seems to have learnt nothing from the epic scandal. If the warnings of whistleblowers, including me, as a member of Shell Transport & Trading Company plc (and Chairman of the Shell Shareholders Org) had not been ignored, the reserves fraud would almost certainly have been exposed before dealing a death blow to Shell in its pre-unified form.

Let me give you an example of Shell's attitude to whistleblowers: A Shell whistleblower, Dr John Huong (left), who worked for Shell for over 29 years, is currently being sued for defamation by EIGHT different Royal Dutch Shell Companies, one from the UK, one Dutch and six based in Asia. They collectively obtained a High Court Injunction and Restraining Order against him. Dr Huong is a deeply religious Malaysian of the highest integrity. He is a humanitarian who has offered his services as a geologist free to underprivileged people (in Iraq). He has deeply held convictions completely in line with Shell's Statement of General Business Principles - its code of ethics pledging honesty, integrity and openness in all of Shell's dealings. Unfortunately he discovered to his astonishment and immense disappointment that Shell management does not share his respect and enthusiasm for the code, nor his conscience.

Dr Huong felt compelled to raise health and safety issues internally in respect of duties assigned to him. This turned out to be a turning point in his long and previously enjoyable career with Shell. Raising such concerns brought him nothing but grief. Basically Shell management's attitude towards him changed overnight. After he was humiliated and dismissed on false charges, Dr John Huong chose as the public platform for his revelations about Shell management’s blatant disregard for health and safety issues.

Dr Huong placed on record in Shell internal documents his concerns over the following issues: -

Details of the events listed above are set out as an Appendage to this letter.

Shell's extraordinary litigation against Dr Huong has been in progress since June 2004. Shell has made an example of him. That is called victimisation. Most people would be frightened if they were sued by one major company. I can only imagine what it must feel like to be sued by EIGHT major companies. David only had to fight Goliath.

It has of course been impossible for Dr Huong to secure any alternative employment as a geologist under such circumstances. That is unfortunate bearing in mind the current market situation with high oil prices and geologists being in short supply to find new reserves during a period of ever increasing demand. Dr Huong is suffering financially at a time when his training and vast experience could have otherwise paid dividends.

Naturally he is devastated and appalled at the cruel and inhuman treatment he has received in return for trying to protect the Company's integrity, assets and reputation. There is a dark cloud over him and his family with no end in sight. Dr Huong has even been threatened with imprisonment by Shell. There is a precedence for intimidatory tactics by Shell. As you may have seen in the news media, Shell had five landowners (the Rossport Five) jailed in Ireland for opposing the Corrib pipeline on safety and environmental grounds. Shell management subsequently performed an embarrassing U-turn by allowing the men to be released when faced with massive street protests in Ireland involving thousands of people.

Shell employees are also well aware of managements sinister track record in using undercover activity against its perceived enemies, which is basically any individual or party which has focused public attention on Shell's misdeeds. This includes Greenpeace, The Body Shop, Nigerian activists and me. Shell's admitted undercover "activities" against me and my family were one of the issues covered in my correspondence a few weeks ago with Shell General Counsel Richard Wiseman. Shell directors were until recently also directors/shareholders and the ultimate spymasters of a commercial espionage firm closely linked with the British Secret Service. Shell was forced to admit after a Sunday Times investigation that an uncover agent had carried out missions on Shell's behalf including infiltration, sabotage and intelligence gathering. It is therefore understandable that following a series of burglaries at his home and regular interference with his communications, Dr Huong is anxious and suspicious about what is going on in his case.  

MI6 'Firm' Spied on Green Groups (Sunday Times archive article 17 June 2001)

The persecution of Dr Huong is clearly part of Shell's strategy to frighten employees so that they will not spill the beans on corporate wrongdoing. I know from security precautions taken by employees who do contact us that the strategy is working. I do not believe that such despicable Gestapo tactics are in the best interests of Shell stakeholders.

On 7 July 2003, Dr Huong sent an email to Sir Phillip Watts (the then Group Chairman of Royal Dutch/Shell) and Dominique Gardy, a director of Shell E & P. He also copied it to the Chairman of Shell in Malaysia, Jon Chadwick. Dr Huong mentioned his concerns over helicopter safety. The email was ignored. Shell would not take any notice of his legitimate concerns which fell within his area of responsibilities and used draconian legal measures to silence him - the legal action mentioned above - after he had been wrongfully dismissed. The helicopter safety cover-up and the related accidents have haunted Dr Huong ever since.

Dr Huong sought the intervention of Malcolm Brinded, the Executive Director of Shell Exploration & Production (the Shell Executive ultimately responsible for the Sakhalin II mega-project). Dr Huong asked to meet him when Mr Brinded visited Malaysia in 2004. His email was ignored. Mr Brinded has a track record of turning a blind eye to wrongdoing at Shell. Please click on the link below for further information and then please ask yourself the question whether Mr Brinded can be trusted to enforce the terms attached to any loan agreement. ALARM BELLS RING OVER TENDERING FOR ROYAL DUTCH SHELL CONTRACTS: Monday 29 August 2005: 03.00 ET: READ

Mr Brinded is one of the Shell Directors who signed Form 20F Declarations filed with the US Securities & Exchange Commission which contained material false information in regards to Shell's hydrocarbon reserves. As a consequence, he is a named Defendant in a US class action lawsuit which has been given permission to proceed by a Federal Judge. 

Malcolm Brinded OBE
Executive Director
Shell Exploration & Production
Shell has suspended its "Tell Shell" discussion forum on its own portal website because management has apparently decided that it no longer wishes to listen to criticism from employees and other stakeholders. Shell first used a censorship approach on Tell Shell, then resorted to suspension when the censorship policy was exposed. Our own site is quickly meeting the demand for candid commentary and publication of disclosures received from Shell employees. It is now the bootleg Shell portal website for such activity. Shell management claims that it is unmoved and disinterested, but at the same time has sued Dr Huong for his contributions to the site and in November 2005 Shell General Counsel Richard Wiseman issued a written threat to me in relation to a webpage about the Sakhalin II cost overrun debacle.

It is interesting to note that during a period of unprecedented trauma and change at Shell, its management has been distracted by the acquisition of a fleet of four luxury executive jets. Perhaps if more time had been spent on project management rather than ego and status driven pursuits and personal enrichment by Shell senior management (and negotiating multimillion dollar payoffs to silence discredited former senior management figures), Shell would not be in the almost perpetual state of crisis which its stakeholders have witnessed in recent years.

I trust that the EBRD will take all of this information into account when considering if Shell management is sufficiently trustworthy and competent to meet lenders policies and standards.

Yours sincerely
Alfred Donovan
When Dr Huong was the Shell Production Geologist for the multi-billion dollar Kinabalu Field project, he made the mistake of raising issues relating to faulty design which rendered the platform unsafe. His warnings were suppressed.
Dr Huong also put into writing his moral reservations about providing information which would mislead shareholders over the reserves volume in relation to the Kinabalu Field. One document contained the following question which Dr Huong raised with his manager in 1997: “Do you want to tell your investors that the volume carried in the ARPR (Annual Review on Petroleum Reserves) is suspected because a change in reservoir work will be expected! How can we live a day with a free conscience by getting the money from our investors through the 502F when our depositional model work is in question?” has a copy of the relevant Shell internal document.
His warning made him extremely unpopular with his management and was in any event ignored. So the reserves fraud came as no surprise to Dr Huong.
The same applied when a Shell helicopter crashed in the sea off Sarawak in June 2005. Had the pilot not averted the flight trajectory to ditch into the sea at the last second, it would have crashed into the B11 gas platform, possibly setting off an inferno. However the news gave him pause to reflect on his own past role in the issue of Shell helicopter safety, bearing in mind that as far as Dr Huong is aware, the helicopter which crashed was involved.

In early July 2002, not long before Dr Huong was dismissed, he made a mistake in his then capacity as a Shell Asset Integrity Engineer of raising the issue of Shell Helicopter safety. His concerns over flight safety were set down in Shell internal documents. They provide irrefutable evidence of Dr Huong's conclusion that various incidents concerned with flight safety - red warning lights flickering during flight, and a series of unstable or aborted flights, violent vibration etc were causing considerable stress to Shell workers who were passengers on the flights. Dr Huong considered the matter to be of such magnitude that when the task of producing a 30 seconds Shell internal documentary video for the newly formed asset integrity team was assigned to him, Dr Huong decided at his own initiate to incorporate a scene of a helicopter crash. As we now know, that turned out to be an unfortunately prophetic action on his part bearing in mind the accident in June of this year.

Coincidentally, within a matter of days news of the video being produced news broke of a helicopter crash into the North Sea in which several Shell employees tragically lost their lives. Although a different type of helicopter was involved, the sad news added urgency to Dr Huong’s concerns about Shell helicopter safety in Sarawak. In keeping with his duties, Dr Huong gathered documentary evidence which revealed that passengers were ordered to board flights after repairs had just been carried out, without being informed that they were in effect “test crews”. A Shell employee stated in an email: “I am not familiar with aviation procedure for testing aircraft after repair. However, I believed there should be more thorough & stringent test done before accepting the passengers.”

On 18 July 2002, Dr Huong sent an email to his manager Mr Hee Len Hi stating: “For your info, Something important to know before someone get badly injured. Are we cost cutting too much at the expense of lives? All correspondence related to this subject are attached.” Instead of being alarmed, Mr Hee Len Hi took exception to Dr Huong bringing the matter to his attention. The resulting animosity was another factor in his subsequent wrongful dismissal on 28 May 2003 (for which Dr Huong is suing Shell).

As a reward for his interest and concern for Helicopter safety issues, Dr. Huong’s got an extremely poor staff appraisal rating in 2002 for many tasks assigned to him which were completed without a job description as the Asset Integrity Engineer (he had repeatedly sought a job description from his supervisors ever since the Kinabalu Project incident, but was denied one). After Dr Huong had produced the video documentary, his supervisor wrote his annual staff appraisal report without prior consultation or discussion with him, as follows.

“The video was mean't to create a visual attention impact at the start of the AI (Asset Integrity) Roadshow. The task was assigned to John in view of his past experience working in Corporate affair. A 30-sec Introductory video was made. However, it did not produce the desired impact and it was scrapped at the recommendation of the AI Steering Committee after one viewing. John compiled the report for presentation at the AI Fishbowl. John created anxiety caused by the lapse in provision of flying service due to unscheduled helicopter repair, rather than focus on improvement measures.”
As previously indicated, the subsequent crash involving one of the same helicopters suggests that Dr Huong was absolutely right and that his managers were negligent by failing to heed his warnings. If anyone had been killed in the June 2005 crash, a public inquiry might well have found those managers to be guilty of a serious criminal offence. That would certainly be the likely outcome in the UK. Shell Malaysia Chairman, Datuk Jon Chadwick seems to have many questions to answer on the helicopter safety issue. Since according to our sources he has had his service in Malaysia extended for another 3 years, he still has an opportunity to make amends for past mistakes which have badly damaged the morale of Shell Malaysian employees - past and present - and punished a proud Malaysian who has displayed more courage and integrity than all of Shell senior management combined. Dr Huong upheld Shell's code of business ethics. Shell management failed to do so. Hence the reserves fraud and other debacles.
Disclaimer: 'The author (Alfred Donovan) and the web site are not endorsed by Royal Dutch Shell plc or affiliated with them in any way.' Published by:, 847a Second Avenue, New York City, NY 10017, USA. Telephone No: +1 (646) 502-8756. Fax: +1 (646) 349-2605. The statements expressed here, and any opinions, are those of the writers alone, and neither are opinions of nor reflect the views of Content created by the writers is the sole responsibility of the writers and its accuracy and completeness are not endorsed or guaranteed. This goes for all links, too: has no control over the information you access via such links, does not endorse that information, cannot guarantee the accuracy of the information provided or any analysis based thereon, and shall not be responsible for it or for the consequences of your use of that information.
*ABOUT THE AUTHOR: Alfred Donovan has had business dealings with Shell stretching back almost 50 years. In the 1980’s & 90’s the sales promotion company he founded with his son, John (Don Marketing) created and supplied multimillion dollar national promotions for Shell on an international basis. He and his son probably hold the world record for suing Shell, having subsequently brought a series of court actions: five for breach of confidence or breach of contract, and two for libel. They have never lost a case against Shell. Details about the litigation are published on, the unique website owned by the Donovan’s. It contains the world’s largest collection of articles, news and reports focused on Royal Dutch Shell and its activities – astonishingly, over 6,000 web pages. Mr Donovan own and uses the registration to the dotcom domain name for Shell’s unified $200 billion (USD) company: Royal Dutch Shell Plc ( Shell made an unsuccessful attempt to seize it by instituting proceedings via the World Intellectual Property Organisation in May 2005. A WIPO panel gave a unanimous verdict in favour of Mr Donovan in August.

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