Shell accelerates restructuring

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Shell is to accelerate plans to reform the structure of the group as it prepares this week to publish its internal review into how it mis-stated almost a quarter of its oil and gas reserves.

Its chairman, Jeroen van der Veer, said in February that he would consider making reforms, but that they would not be introduced before April 2005. Shell will now concede that this process is too slow.

It is understood that the internal review, carried out by independent legal firm Davis Polk & Wardwell, will blame Shell's decentralised board structure for the mis-statements, as well as the US Securities & Exchange Commission's loose definition of proven reserves.

Shell executives are anxious to avoid accusations that the review has been a "whitewash" exonerating them. Speeding reforms would demonstrate that they are taking the initiative.

Shareholders want the company to simplify the group and appoint a non-executive chairman to provide greater accountability.

Analysts speculated last week that the definitive review of Shell's oil and gas reserves will result in a further reclassification of its proven reserves of 1 per cent, or around 150 million barrels. The report, by external consultancy Ryder Scott, is expected at the end of the month when Shell reports first- quarter results.

It is not known whether Mr van der Veer and the finance director, Judy Boynton, will keep their jobs. The interim findings of the Davis Polk review led to the departures of a former chairman, Sir Philip Watts, and a former head of the exploration and production division, Walter van der Vijver.

But it has since emerged that Mr van der Veer and Ms Boynton, among others, had been alerted to a possible reserve accounting problem months before Sir Philip reclassified a fifth of Shell's "proven" reserves as "probable" in January.

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