Incoming! No, it's not a Memorial Day salute or the war in Iraq. It's just Royal Dutch/Shell, communicating with its shareholders.
The oil giant, represented by two stocks, Royal Dutch
Originally, shareholders were told that proven reserves were overstated by a whopping 20% -- or 3.9 billion barrels. Wrong. After three more revisions, they were -- drum roll please -- officially overstated by 4.47 billion barrels.
Words hardly describe how shareholders feel -- but bitten by a dog might come close (did you know, by the way, that last week was National Dog Bite Prevention Week?) Most everybody knows that investors weren't expecting this dog with fleas when they bought into one of the world's premier oil companies.
Worse, it's not just investors being bitten. Just before the Memorial Day weekend, Motiva, a joint venture of Shell and Saudi Arabian Oil, shipped tainted gasoline to 500 Shell and ChevronTexaco
False proven reserves and fuel gauge readings add up to a loss of trust. As alternatives, investors might consider Warren Buffett's Berkshire Hathaway
Trust is everything. To regain mine, Shell Oil needs to demonstrate that it can replace proven reserves and restore the safe investment environment that once was its hallmark.
Fool contributor W.D. Crotty owns stock in ChevronTexaco and Berkshire Hathaway. The tainted gas story is near and dear to his heart. His local Shell gas station was one of the ones to receive -- and distribute -- the bad brew.