Oil giant Shell said today it had been hit with a £65.7 million fine following its reserves crisis earlier this year.

The penalty was imposed by the Securities and Exchange Commission (SEC) in the US after an inquiry which found that Shell violated reporting, record-keeping and anti-trust rules.

The Anglo-Dutch group rocked the market in January by announcing that its oil and gas stocks were 20% lower than previously thought. It subsequently downgraded its reserves a further three times.

Details emerged as Shell reported a second-quarter profit of £2.19bn on the back of the highest oil prices for 20 years.

The reserves crisis claimed the scalps of three senior executives, including chairman Sir Philip Watts and the head of exploration and production Walter van de Vijver.

Both men were criticised in an internal report that revealed they had known since 2001 that reserves had been overbooked.

Shell said today that agreeing to pay the multi-million dollar fine did not mean it admitted the SEC findings or that it was free of blame.

In a further move to draw a line under the crisis, Shell has agreed to pay a penalty of £17 million imposed by the Financial Services Authority in the UK.

Thursday July 29, 2004