A TRADE body representing some of Britain’s biggest institutional investors met non-executive directors of beleaguered Shell yesterday to express their concerns over two shock cuts to the oil giant’s reserves.
Lord Oxburgh, interim non-executive chairman of The Shell Transport & Trading Co, the UK end of the operation, said the talks with the Association of British Insurers were "very constructive and helpful".
He added: "A whole range of matters was discussed. Nothing ruled in, nothing ruled out."
Peter Montagnon, head of investment affairs at the ABI, said: "The meeting was constructive and we are pleased that the non-executive directors of Shell Transport are listening to the views of shareholders.
"This is, however, a long-term dialogue and there will need to be further talks in due course. The dialogue needs to be private in nature and therefore we are not able to give out any specific details about what was said in the meeting." An ABI spokesman had said earlier: "We do have concerns."
The talks came as Shell confirmed a big shake-up of its Nigerian operations - responsible for about one-third of the four billion-plus barrels of overstated oil reserves that have plunged the company into turmoil and led to the resignation of executive chairman Sir Philip Watts and the head of exploration and development, Walter van de Vijver.
The streamlining is meant to increase production in that country from one million barrels a day to 1.5 million barrels by 2006. Nigeria is responsible for 10 per cent of Shell’s global production.
Chris Finlayson, managing director of the Shell Petroleum Development Company of Nigeria, said: "In the current extremely tight budget environment, it is essential to reduce our operating costs to allow sufficient funds for profitable investments.’’
He said the programme would involve relocation of offices and redundancies, but it was too early to speculate on details.
Shell said the reorganisation of its Nigerian operations would help cut the cost of producing crude to $1.50 per barrel from about $2 per barrel.
The reorganisation will involve the creation of a single corporate centre while eliminating "resource fragmentation and duplication of roles", the group said.
Last week Anglo-Dutch Shell again reduced its estimate of how much oil and gas it has, jolting shareholders who were still digesting the company’s restatement of its reserves in January.