A SENIOR Shell director who resigned in the wake of the reserves crisis earlier this year is to receive a £2.5m pay-off.

Walter van de Vijver, the company's former exploration and production boss, will pick up the severance payment of £2.54m in stages and on condition he co-operates with reviews into the crisis.

He resigned, along with chairman Sir Philip Watts, after the Anglo-Dutch group shocked investors in January by revealing proven oil and gas reserves were 20 per cent lower than had been thought. It downgraded its reserves a further three times.

The problems led to a major review of the structure of the business that may lead to Shell's Dutch and British holding companies merging.

Shell was said to have instructed bankers to assess the possibility of a merger - a far more radical move than the unification of the two boards which many analysts had been expecting.

The company said in a statement that it was considering a broad range of structures.

It later revealed details of the payment to Mr van de Vijver, who was 12 years from retirement after 25 years with the company. He will not receive a performance-related annual bonus or stock options for 2004, but is entitled to a deferred pension of £257,516 a year.

In June, Shell said Sir Philip would receive a pay-off of more than £1m.

Both men left the company in March and were censured a month later in an independent review commissioned by Shell.