Energy company Royal Dutch Shell said today it had full confidence in its dealings in future US power prices after a former employee raised questions over $7.4 billion of such deals.
Mr George Namur, a former general manager at Shell's Houston unit, made allegations published in the Financial Timesregarding the trades and forecasts relating to their risk.
In response, Shell said its accounting of such deals was always "conservative" and the company made a thorough check of all aspects of the so-called "tolling" agreements before entering into them.
Under the agreements, Shell provides a certain amount of capacity each year to power station companies. In return, it gets the option to sell energy from power stations that was generated using its gas.
"In terms of all large investments we have a robust review process," a Shell spokeswoman said. "We take a very conservative approach in recognising income from tolling agreements."
Shell declined further comment on the claims by Mr Namur, who said he was fired in August 2001 after he took issue with forecasts relating to the deals.
"We wouldn't discuss any specifics of a former employee," the spokeswoman said.
The tolling agreements were part of the expansion of Shell's energy trading business in Houston.