Multinational oil giant Shell was warned 18 months ago by...
Multinational oil giant Shell was warned 18 months ago by one of its own internal auditors about the dangers of linking management bonuses to oil and gas reserves.
However, until only last month the booking of reserves had been a factor in determining the bonuses of executives at the beleaguered oil giant. In January Shell precipitated a furore when admitting it had overbooked its proven reserves by 25 per cent.
It has now emerged that Anton Barendregt, a senior reserves auditor at Shell, issued the warning in a speech to the Society of Petroleum Engineers in September 2002 in Norway. At the conference, Barendregt warned strongly against any use of reserves-related criteria in the performance assessment of staff and management.
He was concerned that the objectivity of reserves estimates could be impaired if there was a link between these estimates and the remuneration of Shell's employees.
A spokesman for Shell confirmed this weekend that Barendregt had been a senior reserves auditor at the company until retiring earlier this year, adding that he was still employed on a retained basis.
