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Not all bad news for Shell
The fall out from the Shell reserves scandal continues to hit the headlines. Sir Philips Watts has been battling the Financial Services Authority despite that fact that he was not named in their report on the debacle. When will he turn his attention to the news media which was not as reticent as the FSA in naming names?
To take just one example, in an article published in The Independent on 30 December 2004, under the headline “Gaffes, duds and scandal: a year that had it all”, the paper awarded Sir Philip a special prize of “Grandest Deception of the Year”.
The following two paragraphs are taken from the article:
The biggest challenge to Lord Black this year came from Sir Phil Watts, former chairman of Shell, so to him goes the special consolation prize of 'Grandest Deception' of the Year for the breathtaking discovery that Shell had been overstating its reserves of oil and natural gas by more than one-fifth. With characteristic arrogance, Sir Phil attempted to pass this off as little more than a bookkeeping error. He even failed to host the press conference at which the disclosure was made, leaving it instead to his head of investor relations to explain events to an incredulous world. For this, he said later, he was 'very, very sorry' - not for the deception, you understand, but for his absence from the press conference.
One of the characteristics of business leaders who fall from grace is that they can never admit to themselves the game is up. Sir Phil clung grimly to his position for a full two months after the announcement, and even then he had to be fired and given a £1m pay-off to persuade him to leave the building.
In addition to the continuing reverberations from the reserves debacle - what has been described on BBC TV as the biggest investor fraud in history, Shell announced shortly after its unification AGM’s, a slight mistake in the budget projections for the Sakhalin-2 project in Russia: a “staggering” $10 BILLION dollar overrun in project costs. The apt description - “staggering” - was uttered by Royal Dutch Shell Chief Executive, Jeroen van der Veer, who today was the bearer of more bad news, this time a further delay on the offshore project at Bonga, Nigeria.
On top of everything else, there is the continuing PR disaster in relation to the Corrib pipeline in Ireland, with signs that the Irish government may turn on Shell if protests over the imprisonment of the 'Rossport 5' grow even larger this coming weekend.
The only good news of any significance is the announcement today of soaring Shell profits due to the high cost of oil – the one factor over which Shell’s discredited incompetent management has no involvement.

Posted Date: 
21 August 2006 - 1:09am