Calls grow for external auditing of oil reserves
Leading investors in the embattled petroleum group Royal Dutch/Shell are urging management to 'lead the industry forward' by producing an annual reserves statement certified by external auditors.
Link: Shell to become one giant company
Calpers, the Californian state pension fund, and Knight Vinke Asset Management, also partly owned by Calpers, has called on Shell to introduce ‘transparent and meaningful’ reporting of its reserves, The Financial Times reported.
Sean Harrigan, Calpers president, said: ‘Shell should lead the industry forward by raising the bar on how it audits and reports its assets.’
The move would mark a turning point for the industry, in which there are currently no requirements for oil companies to have their oil reserves audited externally.
The US has recently seen growing support for the large accounting firms to sign off reserves’ statements after Shell overestimated its oil reserves, causing investor outrage and the eventual removal of senior management at the beginning of this year.