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Accounting Shell game.

A SENIOR EXECUTIVE at the Royal Dutch/Shell Group old a subordinate in an e-mail message in December that the employee's preliminary analysis of the company's oil and gas reserves problems was "dynamite" and "needs to be destroyed" because it was incomplete, the New York Times reported in April.

The senior executive, Walter van de Vijver, the head of Shell's exploration and production unit at the time, was dismissed on March 3, along with the company's chair, Sir Philip Watts.

Their dismissals came two months after the company stunned investors by lowering its estimates of proven reserves, a crucial financial indicator, by 20 percent, or 3.9 billion barrels.

The company is under investigation by regulators and prosecutors in Europe and the United States.

In London, the combined boards of Shell met to discuss whether to ask other executives at the company to step down, the Times reported.

Van de Vijver issued a statement indicating that he had promptly warned top executives early in his tenure, which began in mid-2001, about the need to re-evaluate "potentially noncompliant reserves." He also said he was asked to resign "without credible explanation."

The Times quoted an unnamed source saying that Van de Vijver's e-mail message figured in the company's internal inquiry.

His e-mail message came on the heels of draft audits by the company describing serious reserves problems in Nigeria and Oman.

Despite the suggestion in the December 2 e-mail message, the analysis, by Frank Coopman, the chief financial officer for the exploration and production unit, was not destroyed, the Times reported.

On December 8, Van de Vijver forwarded a 42-page report to top executives describing significant overstatement of the company's oil and gas reserves.

The December 8 report concluded that the company's filing with the Securities and Exchange Commission might have overstated proven reserves by 2.1 billion to 3.6 billion barrels of oil.

The higher adjustment is close to what Shell reported a month later, the Times reported.
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Title Annotation:Names In The News
Publication:Multinational Monitor
Geographic Code:4EUUK
Date:Apr 1, 2004
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