Lloyds List: Shell settles with regulators to end reserves scandal: “findings and conclusions in the FSA's 'final notice' and the SEC's 'cease and desist order'.” (ShellNews.net)

Tony Gray

Aug 25, 2004

SHELL has moved closer to consigning one of the oil giant's darkest chapters to history when it reached final settlements with the US and UK authorities over its mis-statement of proven oil reserves.

The world's third-largest oil group is paying $120m to the US Securities and Exchange Commission and a record GBP17m ($30.4m) to the UK Financial Services Authority.

These fines come seven months after Shell shocked investors by slashing its proven oil and gas reserves by a fifth, or 4.47bn barrels.

When the scandal was first revealed in January, it cut the group's market capitalisation by almost GBP3bn.

The oil major has also agreed to commit an additional $5m to develop and implement a 'comprehensive internal compliance program' under the direction and oversight of the group's legal director.

Shell settled without admitting or denying the findings and conclusions in the FSA's 'final notice' and the SEC's 'cease and desist order'.

Jeroen van der Veer, chairman of Shell's committee of managing directors, said the conclusion of the FSA's and SEC's investigations into Shell represented 'another significant step....in putting the reserves issues behind us and continuing our efforts to regain and maintain the confidence and trust of our investors, partners, customers and employees'.

The scandal has resulted in three high-profile departures from Shell former chairman Sir Philip Watts, exploration director Walter van de Vijver, and chief financial officer Judy Boynton.