Bloomberg.com: Shell Outside Auditors Knew of Reserve Issues in 2002, WSJ Says
July 15 (Bloomberg) — Outside auditors for Royal Dutch/Shell Group, Europe’s second-largest oil company, learned of possible problems with energy-reserves accounting about two years before the company revealed that it had greatly overstated its holdings, the Wall Street Journal said, citing Shell documents.
The papers suggest that reserve problems were more widely known than the company has revealed so far, the Journal said. Shell announced in January this year that it had to reduce its proven reserves, a measure of an oil company’s value, by 23 percent, leading to regulatory probes and executive resignations.
The cautions went to affiliates of KPMG International and PriceWaterhouseCoopers LLP, and included the possibility that the company’s bonus system may have encouraged the exaggeration of reserves, the paper said.
An unidentified KPMG spokesman in London told the Journal the firm stood by its auditing work for Shell and referred all other questions to the oil company; A PwC spokesman wouldn’t comment and a Shell representative told the paper he wouldn’t comment on “leaked and unverifiable’ documents.
Outside auditors don’t sign off on estimates of reserves, yet they can affect a company’s profit, the paper said. So auditors are required to ensure that there are no inconsistencies between those numbers and financial statements, the paper said.
It is unclear whether the potential issues then appeared serious enough to be worth looking into further, the paper said. Still, the warnings may strengthen the cases of investors who have included Shell’s outside auditors in lawsuits targeting the reserve irregularities, the paper said.
(Wall Street Journal Europe 7-15 A1)
To contact the reporter on this story:
David Altaner in London at [email protected].
To contact the editor responsible for this story:
Chris Collins at [email protected]
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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.
