Daily Mail: Shell shock spotlight on Boynton

Brian O'Connor,

11 March 2004

ROCKED by a wave of revelations about who knew what during the two years before its calamitous downgrade of oil reserves, Shell said its own preliminary investigation has been completed.

In an attempt to halt speculation about further top job losses, Shell's audit committee asked for confidence in the current management team.

But the group seemed close to panic after documents surfaced in the US showing that:

• Top executives including new chief Jeroen van der Veer and finance head Judy Boynton were warned two years ago about reserve shortfalls.

• The warning came from exploration chief Walter van de Vijver, who was nonetheless ousted.

• The full board was not told; and

• Executives discussed an 'external storyline' to play down the problem.

All this triggered an extraordinary statement from Aad Jacobs, chairman of the audit committee which is probing the affair, recommending that boards and auditors 'should feel confident in relying on the representations of the current senior management'.

Some think Boynton, who joined in 2001, is under pressure. Most executives are 'lifers' who arrived 30 years ago. One of these - new exploration chief Malcolm Brinded - is rated a candidate for the top job.

Some fund managers believe that Shell's restructuring must happen sooner than its own April 2005 timetable, and they say it should sell $20bn of underperforming assets.

The audit committee itself was told of accounting issues last October, three months before Shell slashed 20% off its 'proven' reserves, the New York Times revealed. In December, Shell concluded that rival Exxon Mobil had more conservative accounting.

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