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The Wall Street Journal: SEC Drops Probe Of Former Officers In Shell Oil Case

August 31, 2006; Page B7

The Securities and Exchange Commission has decided to take no action against Philip Watts, the former top executive at what is now Royal Dutch Shell PLC, over the 2004 reserves-overbooking scandal, according to his lawyer.

The SEC conducted a two-year joint investigation with the United Kingdom Financial Services Authority and concluded that no action should be taken against Sir Philip, the former chairman of Shell’s committee of managing directors, the lawyer said.

Shell said the SEC also cleared former Finance Chief Judy Boynton and Walter van de Vijver, former head of exploration and production. An SEC spokesman declined to comment.

Sir Philip is still a defendant in civil litigation related to the reserves scandal but no longer faces regulatory scrutiny, said his lawyer, Adriaen Morse.
The Justice Department in June 2005 said it closed a criminal investigation into Shell over the problem. Shell shocked the market with a series of reserves downgrades in 2004 that cumulatively slashed about one-fourth of its oil and gas reserves.

Shell executives, including Sir Philip, initially expressed shock about the problem, but a subsequent probe showed that Sir Philip and Mr. van de Vijver had been weighing the issue for months.

The scandal led to the resignations of many executives, including Sir Philip, Mr. van de Vijver and Ms. Boynton. Shell also streamlined its corporate structure, compressing the Anglo-Dutch conglomerate into a single corporate entity with one board.

A Shell spokeswoman said, “We are pleased that the SEC decided not to pursue this matter further with Philip Watts, Judy Boynton and Walter van de Vijver.” She said, “We can confirm that none of our current directors are being investigated by the SEC or the Department of Justice on this matter.”

At the time of the reserves-overbooking scandal, Shell was controlled by two holding companies, Royal Dutch Petroleum Co. of The Hague and London-based Shell Transport & Trading Co.

—- Alex MacDonald and Brooke Donovan in London contributed to this article.

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