A day after taking over the top spot at Royal Dutch/Shell Group, CEO Jeroen van der Veer urged staff to focus on their performance to help restore confidence in the London-based company.

“We have a great deal to do to deliver operational excellence in all of our business,” said van der Veer, who was appointed Wednesday. In an email note to employees, he called Shell’s business strategy sound, but said it would require “rolling up our sleeves and focusing on our performance that we will restore confidence in the group and restore value to our shareholders.”

The encouraging news followed published rumors that ousted Sir Philip Watts had been warned well before January that Shell had overbooked its proved reserves by 20%. The Financial Times, based in London, reported that insiders indicated that upper management had information on the fields before the overbooking was announced in January.

The Securities and Exchange Commission (SEC) is now conducting a formal inquiry into the overbooking, and Shell is cooperating. Shell’s audit committee of non-executive directors also is conducting an audit of the bookings and the reasons behind the massive cut in reserves. Shell’s internal audit is expected to be completed within a few weeks, according to a spokesman.

In an interview with the Times in February, Watts said of the overbooking that “the judgment was made annually that we were, in aggregate, for the totality of the group, materially consistent with the SEC rules and guidelines and people used that judgment at the time and signed off.”

In a research note, J.J. Traynor of Deutsche Bank wrote that Shell’s “audit committee reviews risk management and accounts for the group, and may well have uncovered malpractice here, leading to their recommendation for management changes.” However, he also gave Watts some credit for bringing the company through some difficult times.

“Philip Watts was a controversial figure in the markets,” Traynor wrote. “But what he has left behind is a number of new [oil and natural gas] replacement provinces, which represent a fundamentally stronger portfolio than has existed in recent years.”

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