Shell on Jan 9 announced a 20% cut in its proved oil and gas reserve base, reclassifying some 3.9-bil bbl of oil equivalent into lesser categories. Around half of the total reduction related to Shell's operations in Australia and onshore Nigeria. Milberg said the reserves did not meet US Securities and Exchange Commission and industry requirements necessary to be classified as "proved," and were improperly reported to shore up its competitive position.

"As a result of these material misrepresentations, Royal Dutch and Shell Transport's true value in the marketplace was severely overstated and misunderstood," the Milberg statement said. Investors reacted sharply, with Shell shares in London falling over 7% in early trade immediately after the announcement.

Shell said that the reduction in its proved reserve base would not have any impact on its financial performance or on the amount of hydrocarbons it ultimately expected to recover from its portfolio. But a group of investors want a meeting with company chairman Philip Watts before he presents the major's fourth quarter results Feb 5.

This story was first published in Platts Global Alert.