Financial Times: Shell chief says he's under threat: Jeroen van der Veer, the chief executive of Royal Dutch/Shell, has admitted that his "head is on the block" unless the company gets to grips by the end of the year with the way in which it books its oil and gas reserves. In a private speech delivered to Shell's 100 most senior executives in the Hague on Wednesday, Mr Van der Veer said the position of Malcolm Brinded, head of the Anglo-Dutch oil giant's exploration and production division, was similarly under threat. (ShellNews.net) 16 Dec 04

By James Boxell in London

Jeroen van der Veer, the chief executive of Royal Dutch/Shell, has admitted that his "head is on the block" unless the company gets to grips by the end of the year with the way in which it books its oil and gas reserves.

In a private speech delivered to Shell's 100 most senior executives in the Hague on Wednesday, Mr Van der Veer said the position of Malcolm Brinded, head of the Anglo-Dutch oil giant's exploration and production division, was similarly under threat.

During his strongly worded address, Mr Van der Veer said he was "steaming inside" about the slow progress in changing Shell's culture after its reserves scandal and admitted that middle management had lost faith in the leadership. Shell was forced to cut its proved reserves by 23 per cent this year a move that led to the removal of three senior executives, including Sir Philip Watts, the chairman.

But while Shell claimed to have put the scandal behind it under new management, Mr Brinded said in October that more cuts would be needed a revelation that overshadowed the historic dismantling of its 100-year-old corporate structure.

Mr Van der Veer said on Wednesday that he would "only sleep well" after Shell had made sure it was fully compliant with reserves regulations. He said that the merger of its Dutch and British holding companies and the creation of a unified board under his leadership "could have been our finest hour, without the new exposures in reserves".

Shell has rechecked 8bn barrels of its 14bn barrels of total reserves, and said that 900m of those could be unbooked. The company is rechecking the remaining 6bn barrels and has said it expects to complete the review by the end of the year. Mr Van der Veer said the "well-by-well" review was on schedule and was confident "that we will get the issue behind us". But he said: "We must get it right ... my head, Malcolm's and those of the exploration and production leadership are all on the block."

He said he had questioned whether the problem with reserves booking was one of "realism", and admitted that too many members of the exploration and production team were "walking with their heads down".

Mr Van der Veer also called on executives to speed up decision-making to make Shell more competitive with its peers. "Shell people if they go from A to B can discuss endlessly 'Shall we go with a Mercedes or a Lexus?' By the time we get there our competitors have been and gone. We have to end this. We will now only have VWs [Volkswagens] and no choice, and go to B without wasting time."

Separately, Mr Van der Veer said Shell "would not be shy" about looking for acquisitions, "especially if oil prices go down". Shell has set aside $45bn for capital investment for the next three years, but analysts say its best chance to boost depleted reserves comes from acquisitions.

Shell was seen as a possible bid target by rivals such as Total of France after the reserves rebooking. Mr Van der Veer called the period "dark days indeed. Perhaps some of you even started to take French lessons".