Irish Independent: Shell keen to put scandal behind it (ShellNews.net)

Sep 18, 2004

ROYAL Dutch/Shell Group is expected to try to put the damaging scandal of its overstated oil reserves behind it when it gives its annual strategy presentation next week.

Analysts said they hoped the presentation would give clues on asset disposals, expected changes in Shell's governance structure and details of how the company plans to achieve its reserve replacement targets in coming years.

More clarity on those issues could support its share price, they said.

However, some in the market do not expect much news and believe the focus will be on whether senior management shows it is committed to changing what some consider Shell's inadequate corporate governance structure.

"It's about convincing the market that there's genuine appetite at the senior level in the company for change," said Mark Iannotti, oil analyst at Merrill Lynch.

Shell shocked investors in January by slashing its proven oil and gas reserves by 20pc. The debacle led the company to oust its top management and sparked probes by US and UK regulators that resulted in heavy fines.

The company has forecast it will have an average reserve replacement ratio of 100pc over the next five years. Analysts said they would be looking for more information on key projects such as drilling in Morocco, Malaysia and Nigeria.