This Wall Street Journal ($) story reports that a draft Royal Dutch/Shell Audit Committee report primarily blames Shell’s former chairman, Philip Watts, and former exploration-and-production chief, Walter van de Vijver, for the company’s massive energy-reserve overbooking that was revealed earlier this year. As reported earlier here, Shell’s boards ousted Messrs. Watt and van de Vijver early last month. The report — prepared by Shell’s audit committee and a team of outside attorneys from law firm Davis Polk & Wardwell — is currently circulating among board members and investigators.
In early January, Shell dramatically reduced its estimate of oil and natural gas reserves by 20%, which is a key investor evaluation tool of an energy company’s value. Last month, Shell again trimmed its reserves and announced that it was delaying its annual report until the completion of further reserve reviews. As a result, investigators in Europe and the U.S., including the Securities and Exchange Commission, are probing Shell’s previous overstatements relating to its reserves.