Toronto Star: Oil giant Shell downgrades reserves again

25 May 04

LONDON—The Royal Dutch/Shell Group of Cos. downgraded the size of its proven oil and gas reserves yesterday for the fourth time this year as the oil giant continued to stumble over a scandal that shocked the markets and forced the resignation of three top executives.

The company, which stunned shareholders in January when it announced its reduced confirmed oil and gas holdings by 20 per cent, or 3.9 billion barrels, said it was downgrading another 103 million barrels from "proven" to less certain categories. Shell blamed the reduction on accounting changes involving "royalties paid in cash in Canada." Combined with two other announcements since January, it brings the total of downgraded reserves to 4.47 billion barrels, the company said. The latest announcement comes ahead of the release of the annual report on Friday.

Shell said it was in negotiations with the U.S. Securities and Exchange Commission, which has been investigating its restatements. It is also being probed by European regulators and may face lawsuits from investors.