Toronto Star: Shell reduces profit over reserves $276 million U.S. overstatement: “Filing reveals impact of debacle”: “inappropriate” accounting in other areas”
Jul. 3, 2004. 01:00 AM
WASHINGTON—The Royal/Dutch Shell Group says the overstatement of its proven oil and gas reserves resulted in profits being exaggerated by $276 million (U.S.).
Europe’s second-largest oil company also said yesterday that “inappropriate” accounting in other areas resulted in profits being embellished by an additional $156 million.
The embarrassing admissions follow a series of disclosures that in total reduced the company’s reported reserves by nearly a quarter and led to the departure of several top executives.
The biggest downward revision was for 2002, when the faulty accounting resulted in profits being overstated by $208 million. In 2001 the reduction was $56 million, in 2000 it was $122 million — and prior to 2000, it was $46 million.
The company disclosed the overstated profits in a filing with the Securities and Exchange Commission late yesterday. The company explained that in addition to the problematic reserves accounting, it had also made errors in the way it accounted for exploration costs, certain gas contracts and the earnings per share of its parent companies.
However, because of a change announced yesterday in the way Royal/Dutch Shell will now account for its inventories of oil and gas, the energy giant said its net income for 2002 was actually higher than previously reported — at $9.72 billion, up from $9.42 billion it reported in Feb., 2003.
In a string of four restatements that started in January, Shell has downgraded its proven reserves by 4.47 billion barrels, or 23 per cent.
Proven reserves are the amount of oil and gas a company expects to commercially pump to the surface. They are a crucial measure for investors of an oil company’s performance and future value.
The reserves debacle led to the resignations of chairman Philip Watts, head of exploration and production Walter van de Vijver and chief financial officer Judy Boynton. It also drew the attention of regulators in the United States and Europe.
Shell has an unusual, bi-national structure in which Royal Dutch Petroleum Co. of the Netherlands controls 60 per cent of the group. Britain’s Shell Transport & Trading Co. PLC holds the remaining 40 per cent.
Investors and analysts alike have blamed this cumbersome structure for the breakdown in governance that led to significant overstatements of the company’s oil and gas reserves.
Newspapers have reported that a board memo warned of problems last fall.
Associated Press
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Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
