More, and more significant, problems at Shell

This past Thursday, Shell cut its estimate of proven reserves for the second time in three months. The first reduction, a 20% cut, resulted in the resignation of Shell’s chairman and the departure of Shell’s head of exploration and production. The group faces investigations by Holland, Britain and the United States.

Now KPMG has refused to sign off on Royal Dutch/Shell’s accounts because of concerns about the quality of the information and potential liabilities to the Securities and Exchange investigation of the group. Shell management is further embarrassed by the revelation that the royal Dutch family, the firm’s single largest shareholder, has lost nearly a half-billion dollars of stock value since January. Shareholders are asking for an explanation of the latest news about KPMG’s audit concerns and the further reductions in proven reserves.