NEW YORK (CNN/Money) - Royal Dutch/Shell has agreed to pay about $150 million to settle charges by U.S. and British regulators that it vastly overstated oil reserves.
Under the settlement, Shell has also agreed to commit another $5 million to establish an internal compliance program under the direction and oversight of the company's legal director, the Securities and Exchange Commission said in a statement.
The company units cited by the SEC, Royal Dutch Petroleum and Shell Transport, neither admitted to or denied any wrongdoing, the commission said.
"Shell's overstatements of its oil reserves, which occurred over an extended period, mandate a strong enforcement response, including imposition of significant civil penalties, to deter Shell and others from engaging in similar misconduct," Harold Degenhardt, administrator of the SEC's Fort Worth, Texas, office, said in a statement.
"As our investigation continues, we intend to focus on, among other things, the people responsible for Shell's failures," he added.
According to the SEC, Shell overstated reserves reported in 2002 by 4.47 billion barrels of oil or oil equivalent, or about 23 percent. The SEC also claimed that Shell in 2002 overstated future cash flows by about $6.6 billion.
Shell shocked the oil industry and investors when it announced the restatement in January, sending its shares tumbling in London and Amsterdam and sparking a number of class action suits in the United States.
The company eventually overhauled top management, with Chairman Sir Philip Watts and oil and gas chief Walter van de Vijver quitting. Former chief financial officer Judy Boynton also left the company.
Shell has been under pressure since to reform its joint governance structure. The company is owned by Royal Dutch Petroleum of the Netherlands and Shell Transport and Trading of Britain.
"Shell has worked hard over the past months to improve its systems and controls and implement other remedial measures to prevent any recurrence of these unfortunate events," Shell Chairman Jeroen van der Veer said in a statement.
"The conclusion of the ... investigations into Shell represents another significant step for Shell in putting the reserves issues behind us and continuing our efforts to regain and maintain the confidence and trust of our investors, partners, customers and employees," he added.
A Shell spokeswoman contacted by CNN/Money declined to comment further on the case.
Shell simultaneously agreed to pay about $30 million to British regulators to settle allegations that Shell overstated reserves.
|
