THE LONDON TIMES: Need to Know: Global Business Briefing 2004: “A year of turmoil for Shell following the disclosure that its oil and gas reserves are overstated by 23 per cent in filings to the US Securities and Exchange Commission”: “Shell agrees to pay a penalty of $125 million to the SEC for violating its reporting rules. It also agrees to pay a record fine of £17 million to the UK Financial Services Authority for market abuse.”: “In November the company takes the unusual step of delaying its annual meeting by two months, amid doubts about its oil reserves.” (ShellNews.net) 28 Dec 04
Edited by Neelam Verjee, Joe Bolger and Tom Roundell
December 28, 2004
EXTRACT: NATURAL RESOURCES
A year of turmoil for Shell following the disclosure that its oil and gas reserves are overstated by 23 per cent in filings to the US Securities and Exchange Commission.
The removal of 4.47 billion barrels leads to the sacking in March of Sir Philip Watts, chairman of the company’s committee of managing directors and the head of exploration, Walter Van de Vijver.
Shell agrees to pay a penalty of $125 million to the SEC for violating its reporting rules. It also agrees to pay a record fine of £17 million to the UK Financial Services Authority for market abuse.
Shell responds to the anger of its shareholders with a promise to review its structure and in November reveals plans to merge its two holding companies, Royal Dutch Petroleum and Shell Transport & Trading.
In addition it agrees to unite its dual boards and replace the management committee with a single chief executive, Jeroen van der Veer.
In November the company takes the unusual step of delaying its annual meeting by two months, amid doubts about its oil reserves. Investors had been due to vote on the restructuring at the annual meeting in April, but the meeting will now take place on June 28. The company describes the move as a prudent measure.
Cairn Energy, the Edinburgh exploration group, discovered oil in western India, quadrupling its share price and propelling the company into the FTSE 100 index. However, a late-year hiccup wiped almost 30 per cent off its share price.
Vladimir Putin, the Russian President, defended the takeover of Yuganskneftegaz, the production unit of Yukos, the oil giant, by Rosneft, the Russian state oil company, because of $27 billion (£14 billion) of back tax claims. Yukos has launched legal action in the US.
Xstrata, the London-based diversified miner, paid $121 million (£63 million) for the right to mine Peru’s Las Bambas copper deposit and launched a A$7.4 billion (£3 billion) takeover bid for WMC Resources, the Australian miner.