Leading British investors met Royal Dutch/Shell on Monday to express their concerns over two shock cuts to the oil giant's reserves amid calls for the firm to simplify its board structure.
Last week the Anglo-Dutch group again reduced its estimate of how much oil and gas it has, shocking shareholders who were still digesting its decision to slash reserves in January.
US regulators have launched an investigation into the affair, which has seen the world's third-biggest oil company slash reserves by more than 20 percent, and US shareholders are threatening to sue.
The Association of British Insurers (ABI), which groups the country's most powerful pension funds, hosted talks on Monday with senior Shell directors - a relatively unusual move for the London corporate world.
Both the chairman of Shell's UK arm and the ABI said the two sides had held constructive talks.
However, leading investors continued to express concerns over the company's reserves cuts.
"Our view is that they may have been doing this (overstating reserves) for quite some time. Since 1992, there has been a real shortage of good new oil finds," said Crispin Odey, whose hedge fund - Odey Asset Management - has made money by selling Shell shares.
Others have also expressed concern about Shell's management structure, which is split between London and Amsterdam. Royal Dutch holds 60 percent while the UK arm, Shell Transport and Trading, holds the other 40 percent. The group has said it will review this structure as part of an internal probe into the reserves cut affair.
"Management is studying a new management and organisation structure. But the recommendations will only be put forward to the AGM of 2005. Until both main investigations have been concluded, we put our recommendation under review," brokerage Insinger de Beaufort said in a research note.
The oil reserves debacle led to the sacking of Shell's two top bosses, with Jeroen van der Veer replacing Phil Watts as new chairman of the group.
job cuts
Scandal-hit Royal Dutch Shell announced on Monday a "strategic transformation" of its Nigerian unit involving job cuts and rapid growth in oil output.
Shell Petroleum Development Co of Nigeria, still reeling from a reserves correction that saw 1.3 billion barrels wiped off its books, said it would cut costs to $1.50 a barrel by 2006.
Oil production is expected to hit 1.5 million barrels per day (bpd) by then, up 400,000 bpd on current levels.
"In the current extremely tight budget environment, it is essential to reduce our operating costs to allow sufficient funds for profitable investments," SPDC managing director Chris Finlayson said in a statement.
A Shell spokesman would not confirm recent media reports that 1,000 employees, or 20 percent of its Nigerian workforce, would lose their jobs as a result of the plan.
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