Royal Dutch/Shell Group’s former CEO of exploration and production (E&P) stated this week that he had uncovered the company’s reserves discrepancies after he took over the business unit and had repeatedly warned top management of the problems before they were publicly disclosed in January (see Daily GPI, Jan. 12).

“Much has been written in the press in the past few weeks regarding my role as the former CEO…” said Walter van de Vijver. “Many of the statements…including many attributed to the company and individuals ‘close to’ the internal investigations are misleading to the extent that they portray my role inaccurately or incompletely. While, out of respect for the company and because of the ongoing regulatory investigations and other legal proceedings, I have decided not to make a detailed statement at this time, key aspects of my efforts at E&P should be clarified for the record.”

The Wall Street Journal reported earlier this week that Shell’s board members were reviewing a report by the internal audit committee that puts the blame for the oil and gas reserves revisions on former Chairman Sir Philip Watts and van de Vijver (see Daily GPI, April 13).

Van de Vijver said from the beginning of his tenure over E&P, he had worked to diagnose and improve the “health” of the business. He was appointed COO of affiliate Shell Exploration & Production Co. in 1998 (see Daily GPI, Sept. 10, 1998). Shell’s “procedures were in need of improvement,” he said, and noted that “some prior bookings needed to be re-evaluated for compliance purposes.” Once he discovered the discrepancies, van de Vijver “communicated” the findings to the Committee of Managing Directors (CMD), which oversees Shell’s worldwide operations, “without delay.” In his statement, he did not disclose a date when he first reported the findings.

Van de Vijver said he did all he could to “offset non-compliance reserves by increasing forward reserves replacement and implementing other measures,” and said he “regularly communicated to CMD regarding the nature and quantity of the potentially non-compliant reserves and our efforts to assess the magnitude of the problem, prevent reoccurrence and implement offsetting measures.” He also said he recommended appropriate public disclosure.

“As the magnitude of the non-compliant reserves classifications became apparent in late 2003, I led the charge to communicate the issues fully within the company,” he said. “I persisted in calling for full and prompt disclosure to the company’s joint board of directors and to the public.” And since the public announcements, van de Vijver said he has offered his full cooperation and support to the ongoing Securities and Exchange Commission investigation as well as internal investigations.

Without “credible explanation,” van de Vijver noted that on March 3, after more than 24 years with Shell, he was asked to resign (see Daily GPI, March 4). “For my part, I look forward to a constructive resolution of these issues and then moving on with my career elsewhere.”

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