Expatica News: Shell: 85pc of written off reserves exist 

30 June 2004

AMSTERDAM — Shell chairman Jeroen van der Veer expects that 85 percent of the oil reserves the Anglo-Dutch energy company wrote off earlier this year will later be restored to the multinational's accounts.

The Dutchman said at a shareholders meeting in Scheveningen this week that the oil reserves exist, but are not listed in order to comply with US accountancy regulations.  

Despite this, 40 percent of the shareholders refused to back the management board's policy. Large investors such as the pension fund ABP and US and British institutes came out and opposed Shell policy direction.

Shell has reduced its overstated oil and gas reserves four times since the start of 2004, accounting for a 23 percent loss of proven reserves. This sparked a fall in stock prices and business bank CSFB urged client investors to dump Shell shares in exchange for BP, newspaper Het Parool reported

The scandal cost the jobs of chairman Sir Philip Watts and two other top executives, Exploration and Production division director Walter van der Vijver and chief financial officer Judy Boynton.

The energy company held on Monday its first public shareholders meeting since the reserves scandal surfaced in January. The meeting centred on a routine resolution — which some investors claimed was an attempt to let management off the hook — only won on a 60-40 vote.

The resolution stated that managing directors "be discharged of responsibility in respect of their management for the year 2003". But some investors felt it could effectively clear managers of responsibility for this year's multiple downgrades, BBC reported.

Van der Veer said at the meeting — which took place simultaneously in The Hague and London, reflecting the Anglo-Dutch company's dual board structure — that he was not in favour of wholesale sackings of top executives and ruled out a "witch hunt".

The Shell chief thinks he can again make the company reliable and restore its integrity by forcing through an internal cultural change. He said arrogance should be exchanged for modesty and personal interest in the company.

Van der Veer also said he planned to meet investor demands to end the dual board system, in which Shell has headquarters in The Hague and London.

[Copyright Expatica News 2004]