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Shell Confirms DOJ Probe into Reserves Accounting
Royal Dutch/Shell Group confirmed that the U.S. Department of Justice (DOJ) has launched a criminal probe into its oil and gas reserves accounting. The company said last week it was unaware of a DOJ investigation (see Daily GPI, March 18).
In a statement released on Tuesday by the London-based major, a spokesman said the company’s lawyers were contacted last Friday by DOJ officials who asked to be included in briefings Shell is providing to Securities and Exchange Commission (SEC) investigators. The SEC launched a formal investigation in February, but it only has the power to conduct a civil investigation (see Daily GPI, Feb. 20).
“On Friday, March 19 a representative of the U.S. attorney’s office in Manhattan contacted our outside counsel in the U.S. and asked to be briefed on information we have previously provided to the SEC,” a Shell spokesman said. “We have agreed to meet and to do so.”
About 95% of the reserves reclassification have yet to be developed. However, analysts and investors have questioned what the downgrades could mean for Shell’s future production prospects. Also questioned is why the problems were not disclosed until this year, even though some of the bookings, which mostly affect reserves in Nigeria and Norway, were made beginning in 1997.
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