Warning Came Years Ago

An internal Shell memo warned nearly two years ago of problems in the way the company accounted for oil reserves. The memo went to ousted chairman Sir Philip Watts and other bosses in early 2002, according to The Wall Street Journal.

The memo warned that Shell's reserve booking might fall foul of US Securities and Exchange Commission guidelines and talked of a cut of 1 million barrels.

Any confirmation the company had not made full disclosure to investors could increase its vulnerability to lawsuits.

The Journal says Shell's audit committee investigation found 'a trail of communications' with Watts about reserving issues.