NETHERLANDS - Oil giant Royal Dutch Shell has indicated it would settle the class action suit brought by investors over its misreported reserves for $500m.
"In connection with the putative shareholder class actions filed in the United States District Court for the District of New Jersey relating to the 2004 recategorisation of certain hydrocarbon reserves, Shell has determined that it would be prepared to resolve that litigation for, among other terms, a payment by Shell of $500m," the company said today.
It has set up a $500m provision, although no settlement has yet been reached, the company said in its second-quarter earnings report today.
The action was brought by investors who claimed to have lost out over the reserves reporting scandal. Shell improperly accounted for its oil and natural gas reserves between 1997 and 2003.
Shell officials reiterated that the provision should not be seen as Shell admitting fault. In January this year, 26 Dutch pension funds, such as ABP and PGGM, filed against Shell. Reports have indicated that the funds are targeting regaining between €150m-€300m.
The group is seeking hundreds of millions of dollars in damages following Shell's improper accounting of its oil and natural gas reserves between 1997 and 2003. "As a result of the fraud and/or negligence alleged herein, plaintiffs suffered significant losses in connection with the purchases of the companies' ordinary shares," the 150-page complaint stated.