Royal Dutch/Shell Group confirmed last week that the U.S. Department of Justice (DOJ) has launched a criminal probe into its oil and gas reserves accounting.

In a statement released on Tuesday by the London-based major, a spokesman said the company’s lawyers were contacted March 19 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 NGI, Feb. 23, 2004).

“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.

In related news, Shell announced it is cutting about 100 jobs in Nigeria as it reevaluates its oil and gas reserves there. The British press also reported last week that shareholders are pressuring the energy giant to hire outside executives to help move the company forward.

Nigeria’s Shell assets represent about one third of the 3.9 billion boe of recategorized proved oil and gas reserves that were announced in January (see NGI, Jan. 12). Operations in the region have been beset by rival militia uprisings as well as oil and gas thefts.

Shell also delayed release of its annual report until May pending a full audit of its reserves by Ryder Scott, and it has not ruled out more oil and gas reserve downgrades.

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