Royal Dutch/Shell is preparing for a full-scale legal onslaught on the subject from regulators and angry shareholders.
Yesterday the Anglo-Dutch oil giant, which sacked its boss this week for overbooking oil and gas reserves, said lawyers from US-based firm Davis, Polk and Wardwell were leading a team conducting an internal review of reserves.
A spokesman said today that despite the sackings of Chairman Mr Phil Watts and oil and gas chief Mr Walter van de Vijver over "facts and circumstances" thrown up by the review, "no finding of illegal conduct has been made by the boards."
But the spokesman was unable to repeat the assertion that company officials acted "in good faith," a statement made in the January 9th downgrade when Shell reclassified 3.9 billion barrels of oil equivalent - 20 per cent of its proved reserves - into categories with less certainty of commercial viability.
"Judgments were made in the past that would not be made today," the spokesman said, repeating a comment made by Mr Watts himself with fourth-quarter results in February.
This week's legal developments indicate that Shell takes seriously the possibility of a full-blown legal battle over the reserves downgrade.
Shell's lawyer-led review of reserves is expected to conclude in the next few weeks, and the results will be shared with US regulator the Securities and Exchange Commission (SEC) and other authorities.