Financial Times: Shell admits second downgrade more serious
28 May 2005
By James Boxell
Royal Dutch/Shell has underlined the seriousness of its second reserves cut last year by estimating that the barrels of oil and gas removed were more valuable than those in its first, far bigger reduction.
The Anglo-Dutch oil group was initially forced to cut its proved oil and gas reserves by about 4.5bn barrels early last year, but was embarrassed in October when it admitted that a further restatement would be needed.
The second cut overshadowed the historic proposal to merge Shell’s Dutch and British holding companies in response to investor criticism about the reserves scandal.
In its annual report, published yesterday, Shell said the net present value of the 4.5bn barrels cut in the first restatement was about $6.65bn (£3.65bn), when applied to the year 2002.
However, the value of the second cut when applied to the same year was about $5.4bn, even though only 1.15bn barrels were removed, which was less than a third of the first reduction.
Shell said in the report that the majority of the barrels removed in the second restatement were in “higher margin areas” and in fields that were already producing, giving them a greater value.
Africa, which is dominated by Shell’s Nigerian operations, accounted for about 35 per cent of the second cut, Asia 26 per cent, Europe 21 per cent, the Middle East 3 per cent and the rest of the world 15 per cent.
The first restatement focused on long-term projects such as the Gorgon gas field in Australia where revenues were not expected for years, giving them a lower present value.
Separately yesterday, Shell said it would miss its 2008 deadline for ending the environmentally damaging practice of burning-off waste gas in Nigeria.
The Nigerian government has warned that companies that failed to meet the deadline would face punishment, including fines.
In its yearly Shell Report, which focuses on environmental, social and governance issues, the company said flaring cuts were “behind schedule” and that it now expects to stop flaring in 2009.
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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.
