Royal Dutch Shell plc Thursday agreed to pay nearly $118 million to U.S. investors to settle claims related to its oil and natural gas reserves restatements in 2004.

If the U.S. case is approved by the courts, it would end all pending litigation from Shell’s 2004 reserves restatement. Shell recategorized nearly 20% of its proved reserves, or about 3.9 billion boe, in early 2004 (see Daily GPI, Jan. 12, 2004). The restatement, which led to the resignation of CEO Philip Watts (see Daily GPI, March 4, 2004), reduced Shell’s proved reserves to 15.6 billion boe from the 19.5 billion boe estimated in December 2002.

The proposed transaction is similar to an agreement last year to settle a related case with European shareholders.

The U.S. lawsuit was brought by Shell shareholders led by the Pennsylvania State Employees’ Retirement System and the Pennsylvania Public School Employees’ Retirement System. Under the proposed settlement, U.S. shareholders would receive a base settlement amount of $79.9 million plus $2.95 million, proportional to the amounts payable to the participants in the European settlement announced last year.

All of Shell’s shareholders — in the United States and Europe — also would collectively receive an additional payment of $35 million, to be divided according to proportions determined in the two final settlement agreements. Shell agreed to pay $352.6 million to shareholders and $47 million in fees to U.S. trial lawyers in the settlement last year.

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