Dutch pension funds sue Shell over reserves

By OGJ editors
HOUSTON, Jan. 9 -- A group of 26 Dutch pension funds, led by Stichting Pensioenfonds ABP, filed a shareholder securities fraud suit against Royal Dutch Shell PLC seeking "hundreds of millions of dollars" in damages for what it calls improper accounting for oil and gas reserves during 1997-2003.

The company reclassified reserves five times in a little over a year (OGJ Online, Feb. 4, 2005).

Grant & Eisenhofer PA, a law firm based in Wilmington, Del., and New York representing the pension funds, filed the lawsuit Jan. 6 in US District Court in Newark, NJ. The suit names several current and former Shell senior executives, including Chairman Jeroen van der Veer and former Chief Executive Officer Phillip Watts. Others named are Judith Boynton, former chief financial officer, and Mark Moody-Stuart, former chairman of Shell Transport. Defendants also include Shell's European auditors, PricewaterhouseCoopers and KPMG LLP.

"The coming together of so many public pension funds in one shareholder suit may be unprecedented in the Netherlands or in Europe," Grant & Eisenhofer said in a statement. ABP's coplaintiffs represent a broad cross section of the Netherlands workforce.

Shell issued a statement saying the lawsuit is against its subsidiary, the former NV Koninklijke Nederlandsche Petroleum Maatschappij, currently Shell Petroleum NV (SPNV). "SPNV contests ABP's claim and will vigorously defend itself against the action," the Shell statement said.

Lawsuit details
"This is an extraordinary harnessing of public interests against one of the biggest companies in the world, to recover losses arising from a massive corporate fraud," said the law firm's Jay Eisenhofer. "Although it may be the first time that such a broad coalition of public funds in one country has joined together in a shareholder suit, it reflects the increasing activism among European investors to seek recovery under US law."

The complaint says the pension funds purchased more than 200 million shares of Royal Dutch common stock during 1999-2005 and suffered "massive losses" because of Shell's restatements of reserves.

"Despite the complex oil reserve accounting issues behind the suit, this case is really about misplaced trust—a large group of public fiduciaries invested hundreds of millions of dollars in one of their country's most established companies, based on the company's own reporting of its most valuable asset, in this case oil and gas reserves," Eisenhofer said.

After the reserves adjustments, Royal Dutch Petroleum Co. and Shell Transport & Trading Co. were merged into a single parent, Royal Dutch Shell, the stock of which began trading July 20, 2005. Shareholders approved the unification formally combining the former Royal Dutch/Shell Group's British and Dutch parent companies under a single board and a single executive (OGJ Online, Oct. 28, 2004). Investors had said the old structure hindered transparency and financial accountability.

Related Articles

Nelson vows to block Murkowski’s stand-alone crude oil bill

07/31/2015 The US Senate Energy and Natural Resources Committee approved Chair Lisa Murkowski’s (R-Alas.) bill to end the ban on exporting US-produced oil. Bu...

Industry 2Q earnings, jobs dissolve amid continued oil-price slump

07/31/2015 A difficult year thus far for the integrated, multinational oil and gas firms caused by low oil prices has been somewhat eased by improved producti...

OGUK survey shows ‘slight improvement’ in outlook in second quarter

07/31/2015

The UK oil and gas industry remains fragile, but the outlook has improved in the second quarter, according to Oil & Gas UK.

Phillips, ETP, Sunoco JV to build, operate Bayou Bridge oil pipeline

07/31/2015 Phillips 66, Houston; Energy Transfer Partners LP (ETP), Dallas; and Sunoco Logistics Partners LP, Philadelphia, have formed a joint venture to con...

MARKET WATCH: Oil futures fall on strengthening dollar

07/31/2015 Light, sweet crude oil prices started July 30 trading with a gain on the New York market, but prices had slipped moderately by settlement, which an...

MOL acquires Czech, Slovak retail assets

07/31/2015

MOL Group, Budapest, completed its acquisition from Eni SPA of retail outlets in the Czech Republic and Slovakia.

FRA issues final rule to keep unattended trains from rolling away

07/31/2015 The Federal Railroad Administration issued a final rule to prevent unattended trains carrying crude oil, ethanol, or other highly flammable content...

Joint venture advances plan for grassroots refinery in North Dakota

07/30/2015 Quantum Energy Inc., Tempe, Ariz., and a joint-venture partner Native Son Holdings LLC (NSH), The Woodlands, Tex., have filed a minor-source air qu...

Shell to shed Japanese refining assets

07/30/2015 Royal Dutch Shell PLC has entered a deal to sell nearly all of its interest in Japanese refiner Showa Shell Sekiyu KK to Idemitsu Kosan Co. Ltd. as...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts

On Demand

OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected