THE BUSINESS: Regulators must bring Shell directors to book: “a deliberate attempt by Shell, over a number of years, not just a few months, to overstate their oil and gas reserves.” (ShellNews.net)

29/31 August 04

THE reports by Britain's Financial Services Authority (FSA) and America's Securities & Exchange Commission (SEC) into Shell's overstating of reserves are far more damning than expected.

The two regulators conclude that there was intent to mislead on the part of Shell executives, some of whom, like former chief executive Sir Philip Wilts, have walked away with large payoffs.

So no simple arithmetical mistake, then. It was a deliberate attempt by Shell, over a number of years, not just a few months, to overstate their oil and gas reserves.

The more information that is uncovered by the regulators, the more disgraceful the affair becomes. Perhaps the most damning of all is the regulators' conclusion that Shell overstated its reserves because of "its desire to create and maintain the appearance of a strong reserve replacement ratio".

The regulators are now looking at the individuals responsible. Let's hope it is on the basis that those who are privileged to lead, but instead mislead, should be punished.