BusinessCompany NewsShell shortfall worse than feared

Shell shortfall worse than feared

Embattled petroleum giant Royal Dutch/Shell is expected to announce massive oil reserve downgrades - including one of almost 150 million barrels from Canada alone - as it reaches the conclusion of its internal audit and prepares for its results, due for release on 3 February.

Link: Shell to hire staff in bid to restore credibility

Although virtually completed, results of the internal audit will be released in the coming months, prior to the company’s AGM in June.

The huge shortfall in reserves is one of a series of catastrophic announcements that has blighted Shell over the past 12 months.

Following a series of cuts to its reserves, totalling 4.47 billion barrels in 2004, Shell called for an internal audit of the 14.35 billion barrels stated to be in its reserves at the end of 2003. The downgrades caused a ripple of resignations within the Anglo-Dutch company, including Sir Philip Watts and finance director Judy Boynton.

In a double blow, these results came as one of Shell’s main rivals, BP, was expected to reveal a record rise in profits for a British company (£13.5bn) next month – a rise of 47% on the previous year.

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