Crisis grows at oil giant Shell

SHELL is due to hold talks with City shareholders today as the oil giant tries to fight back from its latest crisis.

Directors led by UK chairman Lord Ronald Oxburgh are due to meet with the Association of British Insurers, a City pressure group, to try to quell the latest storm.

Thursday's second downgrade of oil and gas reserves has increased the pressure on finance director Judy Boynton and new chairman Jeroen van der Veer. The company has been in crisis since stunning the market with a 20% downgrade in early January.

Shell was yesterday forced to deny reports that auditors KPMG refused to sign the annual accounts. The truth is only partly reassuring - the board never presented the accounts to KPMG because of its own concerns.

Shell has delayed its annual general meeting and publication of its results as it evaluates its assets. Van der Veer says staff at the 107-year-old company need to be retrained to value reserves in accordance with US regulations.

The number of US class action lawsuits on behalf of investors has risen to 15. The suits claim more than £1bn in damages. US claims often begin with poetic sums before ending in realistic settlements.

But Royal Dutch/Shell, in which I hold shares, has seen £11bn wiped off its value since the crisis broke two months ago.

So great is the influence of former Shell executives that no fewer than four chairmen of Footsie companies are named in the suits: van der Veer himself, Sir Mark Moody-Stuart at mining group Anglo American, Paul Skinner at Rio Tinto and Maarten van den Bergh at High Street bank Lloyds TSB.

It will be a good week for high-priced lawyers. Former Vodafone chief executive Sir Christopher Gent is also due to take the stand as a witness this week in Germany, where former Mannesmann bosses are on trial over controversial payments they received during Vodafone's takeover four years ago.