Bloomberg.com: Shell Cooperating With U.S. Justice Department Probe
March 23 (Bloomberg) -- Royal Dutch/Shell Group, Europe's second-largest oil company, said it's cooperating with a U.S. Justice Department investigation of restatements of the company's oil and natural-gas reserves.
On Friday, ``a representative of the U.S. attorney's office in Manhattan contacted our outside counsel in the U.S. and asked to be briefed on information we have previously provided to the SEC,'' Matt Samuel, a Shell spokesman in London said in an interview. ``We have agreed to meet and to do so.''
The U.S. Securities and Exchange Commission started a formal investigation of Shell's reserve reduction last month. The Justice Department has the authority to conduct a criminal investigation of the matter.
Shell, based in London and The Hague, has cut its proved 352erves, a measure of an oil company's value, twice this year. Its shares in London have declined 12 percent since the first reduction on Jan. 9, which prompted investor lawsuits and the March 3 ouster of Philip Watts, 58, as Shell's chairman.
Shares of Shell Transport & Trading Co., the U.K. arm of Shell that represents 40 percent of the group, fell 1.75 pence, or 0.5 percent, to 352 pence in London. Royal Dutch Petroleum Co. slipped 0.5 percent to 37.59 euros in Amsterdam.
Shell Cooperating
People familiar with the situation said last week that the Justice Department had begun an investigation. On Thursday, Shell's new chairman, Jeroen Van der Veer, said he wasn't aware of a probe. Van der Veer and other Shell officials have said the company is cooperating with the SEC investigation.
Shell has hired Washington-based law firm Debevoise & Plimpton LLP to advise on the regulatory probes and lawsuits. Former SEC General Counsel Ralph Ferrara, 58, a partner at the firm, is the company's lead counsel.
In January, Shell cut its proved reserves by 20 percent, or the equivalent of 3.9 billion barrels of oil, increasing investor concern about growth at the company's oil and gas division. On Thursday, the company announced a second, smaller reduction.
Shell must abide by SEC rules because it has securities that trade in the U.S. The U.S. regulator considers oil and gas reserves to be proven only when there is ``reasonable certainty'' they can be produced.
To contact the reporter on this story:
Alex Lawler in London at alawler@bloomberg.net
To contact the editors on this story:
Tim Coulter in London at tcoulter@bloomberg.net or Willy Morris in Vienna wmorris@bloomberg.net
Last Updated: March 23, 2004 14:02 EST
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