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Walter van de Vijver

Desperation led to Shell’s plotting to exploit 9/11 attacks

Screen Shot 2014-02-10 at 16.29.29BUILD UP TO SHELL RESERVES SCANDAL: Comments by leading Shell execs: “…the market will want to know whose head is going to roll for what they will see as blatant deception.”; “this is potential dynamite for management credibility and the share price”; “…how you have to break the detail of this news in September, assuming that there is indeed a firestorm of hostile comment…”; “why should we have any more confidence in these numbers than the previous ones…”; “…please don’t let the people who have got us into this mess be under any illusion that there is an ‘easy’ answer…”; “You will blight the relative TSR of the Group and everyone’s score card for years to come”; ‘So “blaming”’ it on field declines and slippage on growth in emerging markets is the least we should do in order to downgrade expectations.’

By John Donovan

When we published an article about Shell executives plotting to exploit the 9/11 attacks, we said that the motive behind the discussion was well founded internal and external concern about Shell production growth and problematic reserves.

We now publish Shell internal emails circulated in the months leading up to 9/11, which provide proof of the degree of concern over these issues that led to Shell executives considering such a distasteful strategy to manipulate the markets.

Some extracts: read more

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9/11 Terror Attack and the Shell Reserves Scandal

By John Donovan

On Friday we published an article revealing Shell internal email correspondence, which provided proof that three weeks after the 9/11 terrorist attack on the USA, Shell executives were considering how Shell could exploit the horrific event for commercial reasons.

As can be seen from the correspondence, the objective was to “buy us a bit of time” in dealing with “production growth” … and “reserves replacement…” Both are key factors in assessing the value of an oil company. Shell was increasingly vulnerable to criticism on both issues.
read more

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Candid testimony of Simon Henry about disgraced Shell EP Boss Walter van de Vijver

As can be seen in his testimony, Simon Henry deliberately limited the amount of time that Walter van de Vijver spent with UK and US investors, almost as if there was something to hide? Wonder what current Shell investors will make of that revelation? An insight into how Mr Henry thinks shareholders can be manipulated and shielded from potential spontaneous outpourings of the truth. The Dutchman wouldn’t learn his lines.

“I am becoming sick and tired about lying,” said Walter van de Vijver (right), senior executive at Royal Dutch/Shell. Photo Credit: Chris Ratcliffe/Bloomberg News

Candid testimony of Simon Henry about the disgraced Shell Exploration And Production Chief Executive, Walter van de Vijver (shown right).

Simon Henry became Head of Shell Group Investor Relations in March 2001. His predecessor was Walter van de Vijver.

Extracts from the sworn testimony of Simon Henry to the U. S. Securities and Exchange Commission on 19 October 2004 in Washington D.C. The reference to “one on one” meetings, was in regard to Shell senior management meetings with analysts and investors.

As can be seen in the testimony, Simon Henry deliberately limited the amount of time that Walter van de Vijver spent with UK and US investors, almost as if there was something to hide? Wonder what current Shell shareholders will make of that revelation? An insight into how Mr Henry thinks shareholders can be manipulated and shielded from potential spontaneous outpourings of the truth. The Dutchman wouldn’t learn his lines. read more

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How Shell changed its culture and lost its way

FROM OUR ARCHIVES…

Financial Times: How Shell changed its culture and lost its way

By Ian Bickerton

Published: June 17 2004 21:36

Posted 18 June 2004

It is rare to find Royal Dutch/Shell in openly confessional mood. Yet as Jeroen van der Veer, its managing chairman, stood with the applause of the oil group’s 400 senior executives ringing in his ears at a conference in Houston, Texas, last month, he will have known that the response was an expression of relief that the century-old Dutch-British company had finally come clean.

“Did the mid-90s transformation bring the desirable behaviours?” asked Mr van der Veer. “Or did it erode professionalism, corporate cohesion, ‘enterprise first’ thinking and loyalty?” read more

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Shell executives paid no bonuses in 2003

Jeroen van der Veer told staff in Houston, Texas, this week that he would not tolerate “bullying” within the company, and admitted that its dealings with business partners had often been “arrogant”.

FROM OUR ARCHIVES…

Financial Times: Shell executives paid no bonuses in 2003

By Adrian Michaels

Published: May 28 2004

Royal Dutch/Shell, the embattled oil company, on Thursday said it had paid no bonuses to senior executives last year, seeking to reassure investors after months of turmoil and resignations as it published its annual report.

The report, which was publised two months later than usual, also contained expanded information on Shell’s controversial oil and gas reserves. Reserves were separated out geographically by continent for the first time and there was a fuller explanation of reserve accounting policies.
read more

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Shell seeks to draw a line after fourth cut in reserves

FROM OUR ARCHIVES…

Shell seeks to draw a line after fourth cut in reserves

By Michael Harrison, Business Editor

25 May 2004

Royal Dutch-Shell, the crisis-torn oil giant, yesterday cut its proven reserves for the fourth time this year but then sought to reassure the City that it had drawn a line at last under the fiasco.

The latest downgrade means that Shell has now removed 4.5 billion barrels of oil from the proven category, equivalent to just under a quarter of its total reserves.

Malcolm Brinded, the head of exploration and production for Shell, said he was as sure as he could be that this would be the last revision to reserves estimates. “We are not planning to make further changes but you can never say never,” he added.
read more

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Canada candidate for top Shell job

Financial Times: Canada candidate for top Shell job

By Carola Hoyos in London

Published: May 19 2004 5:00 | Last Updated: May 19 2004 5:00

Royal Dutch/Shell yesterday announced the first promotion to its committee of managing directors since the scandal over its oil and gas reserves cut its members from six to three.

The appointment of Linda Cook, president and chief executive of Shell Canada, requires approval by shareholders at next month’s annual meeting. If it is passed, she will take up her post in August.

She is to run the group’s natural gas and power operations – a position she held before her move to Canada in 2003.
read more

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Shell Concealed Extent of Its Problems to Protect Nigeria Partnership

FROM OUR ARCHIVES…

International Herald Tribune: Shell Concealed Extent of Its Problems to Protect Nigeria Partnership.

Friday, March 19, 2004

The Royal Dutch/Shell Group has kept secret key details of its sharp reduction of oil and gas reserves for fear of damaging its close ties to Nigeria, whose oil production quota set by OPEC might be jeopardized if the facts were disclosed, internal company documents show.

Nigeria is seeking a significant increase in its quota with the Organization of the Petroleum Exporting Countries, which sets production levels for its members in an effort to control prices. A lower quota would mean less income for Shell and Nigeria and less Nigerian oil for the United States, the largest customer for its exports. read more

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Shell reputation reserves close to empty

FROM OUR ARCHIVES…

Sydney Morning Herald: Shell reputation reserves close to empty

April 22, 2004

Posted 6 May 2004

The closely guarded reputation of Royal Dutch/Shell was in tatters this week as British newspapers accused the oil giant of lies and a cover-up after an explosive internal report admitted executives knew of problems with reserves more than two years ago.

Amid the clamour on Tuesday, a leading Shell shareholder publicly rejected the company’s claim that there was nothing fundamentally wrong with its structure. Robert Talbut, chief investment officer at fund manager Isis, said: “They have attempted to present this as being down to a couple of bad apples.
read more

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Sadistic Sacking of Shell Exploration & Production Boss

We can now read in a court deposition given under oath, the dramatic and emotional account by van de Vijver himself of how he was brutally pressurised into resigning by his colleagues, including Jeroen van der Veer. A masterclass in backstabbing.

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Tainted ‘symbiotic partnership’ between Brunei regime and Shell

His Majesty the Sultan of Brunei meeting Malcolm (TFA) Brinded, Shell’s Executive Director, Upstream International.

By John Donovan

On Sunday 1 January, the Borneo Bulletin published a gushing article under the headline “Oil & Gas continues to shower Brunei with benefits, opportunities“.

It described a claimed lovefest relationship between Royal Dutch Shell and the Brunei Royal family, which the Sultan of Brunei has summed up as: “the extraordinary symbiotic partnership between the Sultanate and the global oil giant… Royal Dutch Shell… read more

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Royal Dutch Shell dirty washing hung out to dry here every day…

By Alfred and John Donovan

We have now published further parts of the deposition of Walter van de Vijver, the former Group Managing Director of the Royal Dutch Shell Group and Chief Executive of Shell EP. This is in connection with the Shell reserves fraud.

Some associated documents are marked “strictly confidential” and contain blunt criticism of Shell senior employees and how Shell proposes to pass the blame for misdeeds. There is also mention of “dirty washing”. It is a fascinating insight into senior management at Shell. Not a pretty sight. There is some duplication of documents we have already published. read more

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Videotaped Deposition of former Chief Executive of Shell Exploration & Production Walter van de Vijver

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Generous pension pots for the board while occupational schemes face shortfall

The Guardian (UK): Generous pension pots for the board while occupational schemes face shortfall

“Under Sir Phil’s leadership Shell was shaken by a crisis over the level of its reserves, which it eventually conceded had been overstated by some 25%. Investors were shocked to read a leaked email from former exploration boss Walter van de Vijver to Sir Phil, the former chairman, in which he said: “I am becoming sick and tired about lying about the extent of our reserves issues.”

Thursday August 4, 2005

Phillip Inman

Directors of Britain’s biggest companies can look forward to generous pension payouts, according to the Guardian’s survey of top executive pay.

The nine executive directors on the Unilever board have a pension pot worth £80m to see them through retirement – and the figure will almost certainly rise as the group makes more contributions before many of them retire.

Niall FitzGerald, the Anglo-Dutch consumer goods firm’s former chief executive, is one of two directors who have already started taking their pensions. He retired last September after 37 years service with a pension pot worth almost £17m. His colleagues Keki Dadiseth and Patrick Cescau, have also grabbed the top 10 places in the league of corporate pension pots, though they have yet to retire. read more

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Daily Express: Shell pays £52m to help settle reserves actions

Daily Express: Shell pays £52m to help settle reserves actions

Posted Tuesday 19 July 2005

By Andrew Johnson

Published 13 July 2005

SHELL is close to settling one of the three major class actions it was facing in the US in the wake of last year’s reserves scandal.

The Anglo-Dutch oil giant has agreed to pay, subject to court approval, $90 million (£52 million) to a clutch of pension funds run for its US staff.

It is the latest move by the group to draw a line under the affair which saw nearly 6 billion barrels wiped from its reserves which had been artificially inflated. read more

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BLOOMBERG: Shell Stock Headed for Worst Week Since January 2004

BLOOMBERG: Shell Stock Headed for Worst Week Since January 2004

“The shares of Royal Dutch/Shell Group fell in London, heading for their worst week since the January 2004 disclosure that the company’s oil and gas reserves had been overstated for years. The reason now: soaring costs and project delays from Russia to Nigeria. Shell, Europe’s second-largest oil company, yesterday said an oil and gas development in Russia’s Far East is behind schedule and may cost $20 billion, twice original estimates. (Update1)

Posted Saturday 16 July 2005

(Bloomberg) — The shares of Royal Dutch/Shell Group fell in London, heading for their worst week since the January 2004 disclosure that the company’s oil and gas reserves had been overstated for years. read more

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Shell pays $90m to settle class action

Times Online: Shell pays $90m to settle class action

“Shell still faces two other class action claims. One is a shareholder class action that has been consolidated in a New Jersey court. It is believed this claim asserts that share-based savings schemes suffered losses of more than £1 billion. Shell declined to comment on this case this morning. The other action is a derivative claim. Shell said that it was in settlement discussion over this claim but that it would be premature to comment any further.”

Wednesday July 13, 2005

By Miles Costello

Royal Dutch Shell, the oil giant, has agreed to pay more than $90 million to settle one of three class action legal cases levelled against it following its shock overstatement of the level of its proven oil and gas reserves last year.

The proposed settlement – which still has to be ratified by the American courts – comes after Shell found out earlier this month that it would not face criminal charges in connection with the overstatement scandal.

Shell’s revelation last January that it had been exaggerating the level of its oil reserves for years sent its stock tumbling and cost the jobs of several of its senior executives, including the chairman, Philip Watts. read more

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The Guardian (UK): US drops Shell criminal action

The Guardian (UK): US drops Shell criminal action

Mark Milner and David Teather in New York

Friday July 1, 2005

Shell will not face criminal prosecution by federal authorities in the United States for overstating its oil and gas reserves, the company said yesterday.

It said the US department of justice had concluded its investigation and David Kelley, the attorney for the Southern District of New York, had announced that no further action would be taken.

Jeroen van der Veer, Shell’s chief executive, said the company appreciated Mr Kelley’s decision. “The conclusion of this investigation is a most important step towards putting the matter of reserves recategorisations behind us.” read more

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US prosecutors help Shell close chapter on reserves scandal

Daily Telegraph: US prosecutors help Shell close chapter on reserves scandal

Friday 1 July 2005

By Christopher Hope, Business Correspondent (Filed: 01/07/2005)

Shell will not face charges from United States prosecutors after the oil and gas giant admitted last year that it had over-exaggerated its proven reserves by a quarter.

However the US Department of Justice said it was “still evaluating” the case against individual directors involved.

The scandal resulted in the resignations of Sir Phil Watts, chairman and Walter van der Vijver, head of exploration and production. read more

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Shell looks to put scandal behind it with settlements

THE TIMES: Shell looks to put scandal behind it with settlements

Friday July 01, 2005

By Carl Mortished

SHELL is seeking to settle class action lawsuits brought against the company and its former directors after last year’s revelation that the company had overstated its proven oil and gas reserves.

Shell received a boost yesterday when the US Department of Justice said that it would not prosecute the company. “Criminal prosecution of Shell would not serve the public interest,” said David Kelley, US attorney for the southern district of New York.

Mr Kelley cited Shell’s cooperation with the inquiry, its remedial efforts and the payment of a $120 million (£67 million) fine to the US Securities and Exchange Commission. “The public interest has been sufficiently vindicated,” he said. read more

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The Guardian: Shell escapes charges over reserves reporting

The Guardian (UK): Shell escapes charges over reserves reporting

Mark Tran

Thursday June 30, 2005

Shell escaped criminal charges in the US today after a federal prosecutor decided that bringing the Anglo-Dutch oil giant to court over last year’s reserves scandal would not be in the public interest.

US lawyer David Kelley said yesterday that the world’s third-largest publicly traded oil company had cooperated with an investigation after admitting to an overstatement of its proven oil and natural gas reserves by 4.47bn barrels, or about 23%, from 1997 to 2002. read more

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The Guardian: Shell fined £84m over reserves scandal

The Guardian: Shell fined £84m over reserves scandal

“Shell is facing a criminal investigation by the US department of justice, ongoing inquiries by the Dutch financial market regulator and the Euronext stock exchange as well as litigation in the US”

Mark Milner

Friday July 30, 2004

Posted 31 July 2004

Royal Dutch/Shell said yesterday it had agreed in principle to pay £83.6m in fines to regulators in Britain and the US to settle investigations into the oil reserves scandal that broke this year.

News of the fines came alongside results from Shell which showed higher oil prices helped the group to earn net income of $4bn (£2.2bn) in the second quarter.

Shell said it would pay $120m to the securities and exchange commission for breaches of SEC rules and US laws, and £17m to the Financial Services Authority under UK market abuse provisions. The British fine is the largest imposed by the FSA and more than four times the previous record. Shell promised the SEC it would spend another $5m on bolstering internal compliance procedures. read more

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New York Times: Shell to Pay $150 Million in Settlement on Reserves

New York Times: Shell to Pay $150 Million in Settlement on Reserves

“Separately, the Commodity Futures Trading Commission said… Shell’s energy trading unit, Coral Energy Resources, had agreed to pay $30 million to settle accusations that it submitted false price data to publishers”

By HEATHER TIMMONS

Published: July 30, 2004

LONDON, July 29 – The Royal Dutch/Shell Group said on Thursday that it had agreed to pay a total of $150 million in fines to settle investigations by American and British securities regulators into its reporting of crude oil and natural gas reserves. The company said in January that it had substantially overstated those reserves.

The agreement eases some of the pressure on Shell, the world’s third-largest publicly held oil company. But Shell still faces a separate criminal investigation into the matter by the United States Justice Department, a continuing regulatory investigation in the Netherlands and several shareholder lawsuits. read more

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Daily Telegraph: Shell to pay watchdogs £80m for oil reserves row

Daily Telegraph: Shell to pay watchdogs £80m for oil reserves row

“but warned it could not put a figure on the cost of investor lawsuits.”

By Caroline Muspratt (Filed: 30/07/2004)

Royal Dutch/Shell has agreed to pay more than £80m to regulators to settle investigations into the oil giant’s overstatement of reserves, but warned it could not put a figure on the cost of investor lawsuits.

The company will pay £17m to the Financial Services Authority, the largest settlement ever paid to the UK watchdog. It will also pay $120m (£66m) to the US Securities and Exchange Commission and will spend a further $5m to develop an internal compliance programme. read more

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London Evening Standard: Shell pays over reserves scandal

London Evening Standard: Shell pays over reserves scandal

“It still faces a host of multi-billion dollar class-action lawsuits and a US Department of Justice probe.”:

Steve Hawkes, Evening Standard

29 July 2004

TROUBLED oil giant Shell has agreed to fork out £83m in penalties to UK and US stock market regulators to settle the reserves crisis that cast a huge shadow over half-year results unveiled today.

Shell plans to pay £17m to the Financial Services Authority* and $120m (£66m) to the US Securities and Exchange Commission to ‘resolve’ investigations into whether it broke disclosure rules.

It still faces a host of multi-billion dollar class-action lawsuits and a US Department of Justice probe. read more

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BBC NEWS: Shell fined over reserves scandal

BBC NEWS: Shell fined over reserves scandal

“will pay a penalty of £17m to the FSA – the biggest fine ever imposed by the regulator – and a $120m (£65.7m) civil penalty in the US.

The scandal rocked investor confidence

29 July 04

Oil giant Shell has agreed to pay more than £80m in penalties to settle inquiries by US and UK regulators into the firm’s restatement of reserves. The firm slashed its reserves estimates by 20% in January, a move which cost three top executives their jobs.

News of the settlement came as the company unveiled second-quarter net income of $4bn (£2.2bn) boosted by high oil prices from last year’s $2.6bn.

Shell added the review of its corporate structure was moving at a “good pace”. read more

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Reuters: Shell pays fines for reserves woes

Reuters: Shell pays fines for reserves woes

“Royal Dutch/Shell will pay about $150 million (82 million pounds) in fines for an oil reserves scandal that tarnished its reputation”

“Shell’s profits looked reasonable, but concerns remain over future production.” Oriel Securities analyst Richard Rose

By Sudip Kar-Gupta

Thu 29 July, 2004 09:12

LONDON/AMSTERDAM (Reuters) – Royal Dutch/Shell will pay about $150 million (82 million pounds) in fines for an oil reserves scandal that tarnished its reputation, the group says after reporting higher second-quarter profits.

The world’s third-biggest oil group said on Thursday net profit adjusted for the current cost of supply was $3.768 billion in the quarter, up 16 percent from a year earlier, but below forecasts. The company said production was lower and would fall further. read more

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Financial Times: Mudlark: It’s a Shell of a tale

Financial Times: Mudlark: It’s a Shell of a tale

“some shareholders have asked what Moody-Stuart, who remains a non-executive director at Shell, was doing while the reserves debacle was unfolding.”

By Clay Harris

15 July 2004

Just when you thought no more surprises could emerge from Royal Dutch/Shell, there comes a curious tale.

According to whispers that have emerged in recent days, Walter van de Vijver, deposed head of exploration and production, was mulling the possibility of a move to Shell’s global rival, BP.

An incriminating message, it is said, was found in his Shell e-mail account after he was sacked in March. Could he even have had ambitions to succeed Lord Browne?

That would be rather odd. Before his downfall, van de Vijver was seen at Shell as having farther to rise; he was a frontrunner eventually to succeed Sir Philip Watts, who also lost his job in March. read more

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The Times: SHELL SHOCK: BBC Two, 9.50pm 15 July 2004

The Times: SHELL SHOCK: BBC Two, 9.50pm 15 July 2004

“I am becoming sick and tired,” he wrote, “of lying about the extent of our reserves.”

15 July 2004

A clear and merciless indictment of Shell, a company that prided itself on being a safe investment for widows and orphans.

In the late 1990s, BP and Exxon expanded through acquisition, leaving Shell lagging behind. Sir Philip Watts, head of exploration and production at the time, was determined to restore the company’s pre-eminence. Its proven reserves were exaggerated by 4.5 billion barrels.

When Sir Philip became chairman, his successor, Walter van de Vijver, was appalled and fired off numerous warnings. “I am becoming sick and tired,” he wrote, “of lying about the extent of our reserves.” read more

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BBC TV: Oil giant Shell’s investors shocked

BBC TV: Oil giant Shell’s investors shocked

“that’s fraud in the United States and the Justice Department will have a basis for criminally prosecuting the executives”

By Terry Messenger

BBC Money Programme

15 July 2004

Investors found they could not trust in Shell after all.

Peter Montagnon, head of investment affairs at the Association of British Insurers (ABI), is an unflappable man. But on 9 January this year, he was shocked. In his world, the unthinkable had happened.

In the City of London, Royal Dutch/Shell was seen as the safest of havens for money invested by insurance companies and pension funds – which typically belong to the ABI.

They invest money belonging to millions of ordinary people with small savings, pension plans and insurance policies. read more

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SHELL SHOCK: The Money Programme provides a clear and merciless indictment of Shell

The Times: SHELL SHOCK: The Money Programme provides a clear and merciless indictment of Shell, a company that prided itself on being a safe investment for widows and orphans

Television: Thursday, July 15 2004

BBC Two, 9.50pm on July 10, 2004

The Money Programme provides a clear and merciless indictment of Shell, a company that prided itself on being a safe investment for widows and orphans.

In the late 1990s, BP and Exxon expanded through acquisition, leaving Shell lagging behind. The then head of exploration and production, Sir Philip Watts, was determined to restore the company’s pre-eminence. Its proven reserves were exaggerated by 4.5 billion barrels. When Sir Philip became chairman, his successor, Walter van de Vijver, was appalled and fired off numerous warnings. “I am becoming sick and tired,” he wrote, “of lying about the extent of our reserves.” read more

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Shell director was told of reserve woes: ‘a Shakespearian drama’

Financial Times: Shell director was told of reserve woes: ‘a Shakespearian drama’

By Ian Bickerton in Amsterdam

Published: July 5 2004 17:59 | Last Updated: July 5 2004 17:59

Posted 6 July 04

The controversy over internal communications at Royal Dutch/Shell intensified after its most senior non-executive admitted it was “not easy” to corroborate information he received from the group’s directors.

The frank admission by Aad Jacobs fuels speculation about the prior knowledge of directors and officers before a crisis erupted about the state of the Anglo-Dutch company’s oil reserves. Mr Jacobs, chairman of the supervisory board of the group’s dominant Dutch arm last week told shareholders that Walter van der Vijver, then head of the exploration and production division, had mentioned “a problem with reserves” at a lunch last November. read more

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Shell Says SEC Questioned 30 In Reserves Probe

The Wall Street Journal: Shell Says SEC Questioned 30 In Reserves Probe

Investigators from the SEC and the Justice Department have teamed up in the probe”

By ALMAR LATOUR, MARK LONG and CHIP CUMMINS

Staff Reporters of THE WALL STREET JOURNAL

June 29, 2004; Page A2

Posted 30 June 04

Royal Dutch/Shell Group said 30 employees have been questioned by the Securities and Exchange Commission regarding the oil company’s massive overstatement of energy reserves this year.

Investigators from the SEC and the Justice Department have teamed up in the probe and are expected to request interviews with dozens of additional current and former Shell executives.

In a contrite appearance before angry shareholders yesterday at the annual meeting of Shell’s Dutch parent company, Jeroen van der Veer, Shell’s chairman, said he was surprised to learn that the number of executives interviewed in the probe was as high as it was. He said he wasn’t aware of the status of the SEC and the Justice Department investigations and said he hadn’t received an invitation to be interviewed by either agency. He declined to comment on whether he expected to be asked to appear. read more

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Investors stunned by Shell revelation

Daily Telegraph: Investors stunned by Shell revelation

By Christopher Hope, Business Correspondent (Filed: 30/06/2004)

Major shareholders in Shell, the Anglo-Dutch oil giant, yesterday reacted with astonishment to the news that Shell’s Dutch chairman knew there was a problem with its reserves two months before its British chairman was told.

Aad Jacobs told shareholders at Royal Dutch’s annual meeting in the Netherlands that he was told there was a problem in November last year by Walter Van der Vijver, the head of exploration and production who was later fired. read more

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Investors snub Shell in vote on liability

The Times: Investors snub Shell in vote on liability

“Pointing to Sir Mark Moody-Stuart, a former chairman of Shell’s CMD who sits on the Shell Transport board, Mr Pal said: “When this scandal came up, Sir Mark was present. Why did he allow this departure from Shell’s business principles? He should resign from all his other directorships.”

By Carl Mortished, International Business Editor

June 29, 2004

SHELL’S directors yesterday suffered a humiliating rebuff in the Netherlands when investors in Royal Dutch Petroleum, representing almost 40 per cent of the Dutch holding company’s shares, voted against discharging the directors from liability.

The annual resolution to discharge managing directors and supervisory board directors is normally a formality at Royal Dutch meetings, but a number of Dutch pension funds yesterday took the chance to express anger over the misreporting of 4.5 billion barrels of oil and gas reserves. read more

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Toronto Star: Oil giant’s brass beg for pardon and time

Toronto Star: Oil giant’s brass beg for pardon and time: Contrition expressed at Royal Dutch/Shell: Reserve-booking fiasco stays at centre stage

Jun. 29, 2004.

LONDON—Royal Dutch/Shell Group’s top brass, chastened by this year’s reserves-booking fiasco, have begged shareholders for forgiveness and time to revamp the Anglo-Dutch oil giant.

At twin annual general meetings yesterday in The Hague and London, board members of the parent companies, Royal Dutch Petroleum Co. and Shell Transport & Trading Co., were pressed by both the usual coterie of individual shareholders and an uncommonly large number of institutional investors who have been chafing for structural change and greater openness from the oil giant. read more

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Shell chief ‘was told in advance’ of problems

Financial Times: Shell chief ‘was told in advance’ of problems

By FT reporters

Published: June 28 2004 12:25 | Last Updated: June 28 2004 13:25

The most senior non-executive director of Royal Dutch Petroleum, the larger arm of Royal Dutch/Shell, knew of an “imminent problem” with the booking of oil reserves two months before the company disclosed it publicly, it emerged on Tuesday.

The revelation, made at the annual meeting of Royal Dutch in the Netherlands by Aad Jacobs, chairman of the supervisory board, contrasted with comments made in London by Lord Oxburgh, chairman of Shell Transport & Trading. read more

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Testy Annual Meeting Focuses on Shell’s Scandal

The New York Times: Testy Annual Meeting Focuses on Shell’s Scandal

“A few of Shell’s top executives mislead shareholders and the financial world, he said. ”In the United States they’d have been taken away in handcuffs.”

By GREGORY CROUCH

Published: June 29, 2004

THE HAGUE, June 28 – At its first annual meeting since it became engulfed in an oil reserve scandal, the Royal Dutch/Shell Group on Monday tried to contain the fury of shareholders, but the company may have inadvertently made things worse after an executive raised doubts about when he was first informed of the reserve discrepancy.

Shareholders – demanding to know how the company could have overbooked 4.5 billion barrels of oil and gas reserves and also when company officials first knew about it – appeared surprised when Aad Jacobs, supervisory board chairman of the Royal Dutch Petroleum Company, said he was told of “an issue with reserves” in November. read more

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Daily Telegraph: Shell boards survive as showdown evaporates

Daily Telegraph: Shell boards survive as showdown evaporates

By Christopher Hope, Business Correspondent (Filed: 29/06/2004)

Shell’s embattled boards came through two stormy annual meetings in Britain and the Netherlands yesterday but a promised showdown with institutional investors failed to materialise.

In London, Lord Oxburgh of Liverpool, Shell’s UK chairman, was forced to deny there had been a board level “cover-up” over Shell’s announcement that it had overstated its proven reserves of oil and gas by more than 20pc.

Meanwhile, in The Hague, 40pc of Shell’s Dutch shareholders voted against a routine resolution “discharging” its directors and supervisory board of responsibility for Shell’s 2003 accounts. read more

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Houston Chronicle: Royal Dutch-Shell fuels doubts

Houston Chronicle: Royal Dutch-Shell fuels doubts

June 29, 2004,

THE HAGUE, NETHERLANDS – For the first time since it became engulfed in an oil reserve scandal, the Royal Dutch-Shell Group of Companies on Monday tried to contain the fury of shareholders at its annual meeting, but the company may have made things worse after an executive raised doubts about when he was first informed of the reserve discrepancy.

Shareholders demanding to know how the company could have overbooked about 4.5 billion barrels of oil and gas reserves and also when company officials first knew about it appeared surprised when Aad Jacobs, supervisory board chairman of the Royal Dutch Petroleum Co., said he was told of “an issue with reserves” last November. Shell’s overstatement of its reserve estimates did not become public knowledge until early January. read more

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Oil & Gas Journal: Pension funds sue Shell brass, auditors, seeking damages, policy changes

Oil & Gas Journal: Pension funds sue Shell brass, auditors, seeking damages, policy changes

Judy Clark

Associate Editor

28 June 2004

HOUSTON, June 28 — In a move that could indirectly impact a number of companies, two US-based pension funds filed suit Friday against 27 directors and officers of the Royal Dutch/Shell Group and their accounting and audit firms PricewaterhouseCoopers International and KPMG International.

The action followed financial losses and scandal associated with Shell’s cutting its proved oil and natural gas reserves four times since Jan. 9 for a total downgrade of 4.47 billion boe for 2002 reserves—23% of its proved reserves as stated Dec. 31, 2002—and 500 million boe for 2003. The reserves debacle exposed an underlying industry-wide problem in reserves booking that many companies must now address (OJG, Apr. 5, 2004, p. 43). read more

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Thirty Royal Dutch/Shell employees questioned by SEC in reserves probe

San Francisco Chronicle: Thirty Royal Dutch/Shell employees questioned by SEC in reserves probe

Monday, June 28, 2004

THE HAGUE, Netherlands (Dow Jones/AP) — Royal Dutch/Shell Group executives said Monday that 30 employees have so far been questioned by the U.S. Securities and Exchange Commission, which is investigating the Anglo-Dutch oil giant for improper reserves disclosure.

The executives were being quizzed at the group’s annual general meeting, which is taking place concurrently in The Hague and London.

Shell, the world’s third-largest publicly traded oil company by market capitalization, didn’t specify who those employees are. read more

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Sacked Shell boss walks away with £1m

Daily Telegraph: Sacked Shell boss walks away with £1m: “despite his role in the oil giant’s reserves debacle”

By David Litterick (Filed: 26/06/2004)

Sir Philip Watts: huge payout despite failure on reserves

Sir Philip Watts was paid more than £1m compensation from Shell despite his role in the oil giant’s reserves debacle.

The former chairman has been paid a lump sum of £1,057,971, which the company said was based on the amount he could expect to receive if he had stayed in his job until his normal retirement date of June 2005.

Sir Philip received an annual salary of £800,000 when he was forced to resign in March after Shell’s announcement that it had overstated its proven oil reserves by 20pc – the equivalent of 3.9billion barrels. read more

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The Independent: Investor fury over £1m pay-off for Shell chief

The Independent: Investor fury over £1m pay-off for Shell chief

By Michael Harrison, Business Editor

26 June 2004

Shell outraged investors yesterday by giving its disgraced former chairman Sir Philip Watts a pay-off worth more than £1m.

Sir Philip, who was ousted from the oil giant in March following a scandal over the misreporting of reserves, has also been allowed to keep 2.9 million share options in Shell and start drawing a £584,000-a-year pension immediately.

The size of the pay-off is certain to provoke fury from shareholders at Monday’s twin annual meetings of the Anglo-Dutch company in London and The Hague. Investors are still recovering from January’s shock reserves downgrade which wiped £16bn from Shell’s market value. read more

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Pension funds file suit on behalf of Shell

Financial Times: Pension funds file suit on behalf of Shell

By Sheila McNulty in Houston

26 June 2004

Two US pension funds have filed a lawsuit on behalf of Royal Dutch/Shell, seeking damages from its boards, current and past top executives and its accountants – PwC and KPMG – for overstating the group’s proved reserves.

Numerous lawsuits have been filed against Shell, seeking reparations for investors, but this is the first seeking to disgorge executive compensation back to the company. It also demands increased accountability, a vote on combining the boards and the right to nominate directors. read more

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Shell to give Watts £1m pay-out

Financial Times: Shell to give Watts £1m pay-out

By Gordon Smith and Sundeep Tucker in London

Published: June 25 2004 12:08 | Last Updated: June 25 2004 12:55

Sir Philip Watts, the former chairman of Royal Dutch/Shell who resigned earlier this year after it was revealed the oil group misbooked 20 per cent of its reserves, will receive a £1m ($1.8m) severance payment, Europe’s largest oil group said on Friday.

The £1,057,971 lump sum pay-out is based on the salary the former chairman would have received up to his retirement date of June 2005. read more

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The Times: Shell hires veteran as new chief of finance

The Times: Shell hires veteran as new chief of finance

By Ingrid Mansell

June 25, 2004

SHELL plugged the final hole in its top management yesterday by appointing a 20-year company veteran to replace its ousted finance director.

Peter Voser, who worked for Shell from 1982 to 2002, will rejoin the oil major in October, following a two and a half year stint as chief financial officer of ABB. He is widely credited with turning round the Swiss engineering group.

Analysts said Mr Voser’s most pressing task at Shell would be a “City charm offensive” to restore investor confidence in the company’s management. The boardroom was cleared out after it emerged that the group had massively overstated its oil and gas reserves. read more

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The Guardian: Shell veteran returns to fold

The Guardian: Shell veteran returns to fold

Mark Milner

Friday June 25, 2004

Shell has brought back one of its old boys as it rebuilds a top management team devastated by scandal over oil reserves.

The Anglo-Dutch group has recruited Peter Voser, a Shell veteran of 20 years, who has spent the last two years helping engineering group ABB to rebuild its balance sheet.

He will take over as chief financial officer of Royal Dutch-Shell and will be a member of its committee of managing directors in early October. He will also become a director of Shell Transport and Trading, the British arm of the Anglo-Dutch group. read more

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Shell appoints new finance chief: ‘a Shell veteran’

BBC News: Shell appoints new finance chief: ‘a Shell veteran’

24 June 04

Troubled oil giant Shell has appointed a new finance chief as it seeks to reassure nervous investors.

Peter Voser, formerly chief financial officer at Swiss firm ABB, will join Shell with effect from 4 October.

Shell’s former CFO Judy Boynton quit in April this year following a row over the firm’s booking of oil reserves.

Shell has been forced to restate its reserves four times this year, sparking anger amongst shareholders and leading several top executives to quit.

Ms Boynton’s departure had been preceded by the removal of chairman Philip Watts and oil and gas chief Walter van de Vijver. read more

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Business Report: The corporate pressure of performance

Business Report: The corporate pressure of performance

By Bert Chanetsa

21 June 2004

What is clear from the saga at Royal Dutch/Shell is that the practice of categorising reserves is a supreme challenge.

This is so both in the context of shareholder and market expectations as well as regulatory requirements.

For any company operating in the resources sector, reserves booked are a critical indicator of value to stakeholders.

A drama around the veracity of the method of such bookings has been playing itself out at Shell.

On January 9 this year, Shell announced that it would be recategorising some 3.9 billion barrels of oil equivalent, or 20 percent of proven reserves, previously stated as at December 31 2002. read more

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