Shell's new boss reassures market

5 March 04

Jeroen van der Veer, the new chairman of oil giant Shell, has tried to soothe nerves over a US probe into its accounting practices.

Shareholders have been up in arms since the company unexpectedly slashed proven oil and gas reserves by 20% in January.

That prompted shares to tumble and the US Securities and Exchange Commission (SEC) to launch an investigation.

On Wednesday, previous chairman Sir Philip Watts bowed to pressure and resigned with immediate effect.

Speaking on a conference call, Mr van der Veer said the company was still examining how the problem arose.

Subtle change

He added that while Shell had met SEC officials in the past couple of weeks and provided letters clarifying its position, the company had been given no indication of any pending legal action.

While denying any claims of illegal activity, the company has recently shifted its position.

On Thursday, Shell said it could no longer stand by the earlier statement that officials had acted "in good faith" when accounting for the estimated reserves.

That may now open the door to legal action, with investors claiming they were deliberately misled.

Mr van der Veer said that Sir Philip resigned as chairman because the company's boards had lost faith in him.

Outlook

Sir Philip was exploration and production boss at the time most of the reserves in question were booked and he has been widely criticised for failing to announce the downgrade himself or make himself available to investors immediately afterwards.

Mr van de Veer was keen to draw a line under the company's recent problems, using the conference call to reiterate that Shell wanted to use extra cash to pay dividends and finance investments. He also said that the company had spoken to about 50% of shareholders and was looking into their recommendations for changes to the way Shell was run.

Shares in the Anglo-Dutch oil giant dropped about 0.5% in London and by more than 1% in Amsterdam.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/3536233.stm