Shell reserves jitters resurface

SHELL sent a shudder through the City today as it raised the prospect of yet more damaging downgrades to the amount of proven oil and gas reserves on its books.

The Anglo-Dutch oil giant is delaying its annual general meeting, at which the key shareholder vote on its new corporate structure is to be held, by two months in case an ongoing internal audit throws up more problems.

Its AGM, at which chairman Jeroen van der Veer will formally introduce plans to merge the two parts of the Shell empire, will now take place next June.

The merged group will be headquartered in Holland but take a primary listing in London. Shell insisted it was simply being 'prudent', but the move sparked yet more fears of hefty revisions to its reserves - its lucrative lifeblood.

The shares fell 2¾p to 445½p. One analyst said: 'It may well be prudent but it raises the worry there will be another downgrade. It also puts back Shell's re-weighting in the FTSE 100 by three months.'

Shell has already slashed nearly 4.5bn barrels, or 20%, from its reserves base since the scandal first broke in January. Three executives, including former chairman Sir Philip Watts, lost their jobs.

Last month, Shell signalled more could be on the way when announcing, alongside plans for the corporate shake-up, the possible 'loss' of a further 900m barrels. This followed the start of an internal review of its total reserves base of 14.4bn barrels, in line with the strict rules and regulations set down by the US Securities and Exchange Commission.

Shell said today that it hopes to complete the audit by the end of the year. It will present the results, with fourth-quarter figures in February.