Nigeria's Oil Reserves Intact, Says Shell MD
Energy
From Mike Oduniyi, in London
In the ongoing recategorisation saga, Shell has insisted that its crude oil reserves figures for Nigeria, as submitted to the Federal Government, remained unchanged.
This comes in the wake of oil giant Royal/Dutch Shell's announcement that it had paid $151m in fines to capital market regulators in the United Kingdom and the United States over its oil and gas reserves recategorisation that had rocked the company since the beginning of this year.
In a statement released by the oil company, Shell said it had agreed to pay the UK Financial Services Authority (FSA) a penalty of �17 million and the US Security and Exchange Commission (SEC), $120 million civil penalty and another $5 million developing a comprehensive internal compliance programme.
The fines, according to the world's third biggest oil company, followed an agreement it reached with the regulatory authorities to resolve their pending inquiries related to Shell's reserves recategorisation.
Shell shocked the global oil industry when it announced last January that it had slashed 20 percent or about 4.0 billion barrels off its oil reserves claims.
The announcement, which affected the company's financial fortunes and led to the sack of three senior officials including former chairman, Phil Watts, also reverberated in Nigeria as over one million barrels of the country's crude reserves were also said to be affected.
UK's FSA said in London that the fine had been imposed because the oil firm had abused market rules by not releasing information on the true state of its reserves, which were 4.5 billion barrels below the figure originally stated. This was said to have breached UK_s Financial Services and Markets Act 2000 and the Listing Rules made under it.
But Shell said it agreed to pay the fine without admitting or denying the FSA's findings or conclusions that it breached or abuse the Act.
" In connection with the proposed settlement, Shell will pay a penalty of �17 million," it said.
"In connection with the agreement in principle with the SEC staff, Shell will consent, without admitting or denying the SEC's findings or conclusions, to an administrative order finding that Shell violated, and requiring Shell to cease and desist from future violations of, the antifraud, reporting, record keeping and internal control provisions of the US Federal securities laws and related SEC rules.
"In connection with the proposed settlement, Shell will pay a $120 million civil penalty and has undertaken to spend an additional $5 million developing a comprehensive internal compliance program. The agreement in principle with the SEC staff is subject to final approval by the SEC."
Shell Group Chairman, Mr. Van der Veer called the settlement "a hopeful step for Shell".
The Managing Director of Shell Petroleum Development Company (SPDC), Mr. Chris Finlayson, told THISDAY that the reserve figures reported to the Nigerian authorities were based on Nigeria's national standards, and not affected by the reclassification.
Amid reports that the downgrade slashed off 1.0 billion barrels, Finlayson said: "The figures that have been reported against the Nigerian national standards have not changed.
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