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Shell offers 353 mln dlrs to settle non-US reserves crisis claims
AFP
LONDON
Petroleumworld.com 04 12 07
Anglo-Dutch energy firm Royal Dutch Shell said on Wednesday it would pay 352.6 million dollars (262.7 million euros) to settle non-US claims related to an oil reserves crisis three years ago.
Shell admitted in 2004 that it had overstated proven oil and gas reserves, leading to the departure of key executives and a reorganisation of the company to restore investor confidence.
"Royal Dutch Shell plc today announced the proposed settlement of claims outside the US related to the 2004 restatement of reserves," Shell said in an official statement to the London Stock Exchange on Wednesday.
"Without admitting any wrongdoing, Shell agreed to pay 352.6 million dollars, plus administrative costs, to investors covered by the settlement."
The statement added: "Shell intends to offer the same proportional settlement to investors in the US, provided the US court overseeing the case approves."
Shell said Wednesday that it had signed the arrangement with certain institutional investors led by Dutch pension funds ABP and PGGM, the Shell Reserves Compensation Foundation, and the Vereniging van Effectenbezitters (VEB), which represents individual Dutch investors.
The company added that it would ask the US Securities and Exchange Commission (SEC) to distribute to shareholders the 120 million dollars it paid in 2004 to resolve the regulator's investigation into its overstated reserves.
Shell said it would pay the claims once the Amsterdam Court of Appeals declared the settlement binding for all of the shareholders it covers.
Shell was thrown into crisis in 2004 after revealing that it had overstated its proven oil and gas reserves by about 6.0 billion barrels in 2002 and 3.0 billion barrels in 2003. The steep downgrades accounted for 29 percent and 10 percent of proven reserves in those two respective years.
Some investors had blamed the 2004 reserves debacle on what they viewed as Shell's complicated structure.
The episode led to the historic merger of the energy giant's two holding companies.
Shell moved to a more traditional single-board structure in 2005, with one chairman and one chief executive after scrapping its dual-board arrangements based in Britain and the Netherlands.
Shares in Royal Dutch Shell traded higher on Wednesday, as the stock was boosted by rising crude oil prices -- which traditionally boosts the profits of energy majors.
In early afternoon London deals, Shell saw its 'A' shares add 0.71 percent to 1,699 pence. Meanwhile the FTSE 100 index of leading shares, on which the company is listed, gained 0.30 percent to 6,436.90 points.
AFP 11 1147 GMT 04 07
Copyright© 2007 AFP. All Rights Reserved.
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