Shell may face US probe on reserves

OIL GIANT Shell could face an investigation by US financial watchdog the Securities and Exchange Commission over last week's dramatic 20% cut in its proven reserves estimates, which wiped £3bn off the value of the company.

SEC commissioner Roel Campos told the Wall Street Journal: 'The Shell matter seems significant. I am sure our enforcement staff will look at it. It is hard to see how [Shell] could miss so badly.'

However, SEC spokesman John Haine told Bloomberg: 'We bring actions against parties for misrepresenting facts with the SEC. That's one of the things people get into trouble for with us. I cannot opine whether a 20% restatement is bad enough or not.'

A Shell spokesman said today: 'As you would expect, we have been in contact with the SEC on this matter.' But he declined to say whether the contact had been before or after last Friday's shock statement.

Some enquiries by the SEC led Shell to reclassify its reserves in the first place. The shares fell a further 3 1/4p to 363 1/4p today, taking the four-day slide to 38p, or 9.5%.

US investors are among the fiercest critics of embattled Shell chairman Sir Philip Watts, who was in charge of booking many of the reclassified reserves when he was head of Shell's exploration and production division.