Posted on Tue, Mar. 09, 2004
Memos cite Shell reserves shortfall
By Stephen Labaton;Jeff Gerth
The New York Times
WASHINGTON - The new head of the Royal/Dutch Shell Group and its current chief financial officer, as well as the chairman ousted last week, learned of huge shortfalls in proven oil and natural gas reserves in 2002, two years before their public disclosure, according to company memorandums and notes of executive discussions.
But rather than disclose the problems to investors, senior executives came up with what is described in a July 2002 memorandum as an "external storyline" and "investor relations script" to "highlight major projects fueling growth," "stress the strength" of existing resources and minimize the significance of reserves as a measure of growth.
Senior executives also discussed problems with reserves months earlier.
A February 2002 memorandum said that a billion barrels of reserves "are no longer fully aligned" with Securities and Exchange Commission rules because the agency had clarified them. The memorandum termed an additional 1.3 billion barrels of reserves at risk because the company could no longer ensure their extraction during the remaining term of licenses between it and three foreign countries.
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http://www.dfw.com/mld/dfw/business/8141137.htm