Australian Financial Review: Shell makes more reserve revisions

Tom Cahill  

May 25

Royal Dutch/Shell Group, Europe's second-largest oil company, cut oil and gas reserves for the fourth time, seeking to conclude revisions that led to the ousting of senior executives and the loss of its top credit rating.

Shell will reduce reported reserves by 4.47 billion barrels of oil equivalent as of 2002, which is 120million more than a previous estimate of 4.35 billion barrels.

Shell said the latest reduction followed a change in the way it recognised holdings in Canada.

The reduction represents a 23 per cent drop from initial estimates for 2002.

Shell has conducted an internal inquiry into reserve reporting practices under Philip Watts, 58, who was replaced as chairman earlier this year.

Jeroen van der Veer, 56, who took over as chairman, said in the statement that auditors "have given unqualified audit opinions" for the latest figures.

Shell said it would release its annual report for 2003 this Friday after delaying the publication to conduct an internal inquiry into overstatements of its oil and gas reserves.

Shell also said talks were continuing regarding an inquiry with the US Securities and Exchange Commission.

Shell lost its top credit ranking from the three major ratings companies earlier this month.

http://afr.com/articles/2004/05/24/1085389339011.html