Step 1 Heat the oven to 350 degrees. In a large mixing bowl, toss the lamb shanks with 1 tablespoon oil, one-half teaspoon salt and one-fourth teaspoon pepper.
Step 2 Heat a large, heavy-bottomed saute pan over medium heat until hot. Add the oil, and when the oil is hot add the lamb shanks in a single layer (do this in batches, if necessary). Brown the shanks uniformly on all sides, then remove the shanks to an appropriate casserole or braising pan with a tight-fitting lid.
Step 3Pour off and discard any excess fat, leaving only 1 to 2 tablespoons in the pan. Add the onion and mushroom and cook over medium heat, stirring occasionally, for 4 to 5 minutes, then stir in the garlic. Cook another minute, stirring, so that the garlic does not burn. Add the red wine, bring to a near boil, and reduce the liquid by two-thirds. Stir in the oregano, tomatoes with juice and the demi-glace. Bring the mixture to a boil, remove from the heat and pour over the lamb shanks. Add the bay leaves and cover the lamb tightly with the lid.
Step 4Transfer the lamb to the oven and cook for 1 hour, then reduce the heat to 300 degrees and continue to cook the lamb until it is fork tender but not falling off the bone, about 1 additional hour.
Step 5Remove the casserole and allow the lamb to cool , uncovered, for 15 minutes. Remove each shank to a serving dish and cover with foil. Remove the bay leaves from the casserole and discard.
Step 6Skim any fat from the top of the sauce. Check the consistency of the sauce (it should be the consistency of heavy cream). If the sauce is too thin, reduce it on the stove-top until it is the proper consistency. This makes about 2 1/2 cups sauce. Taste the sauce, adjusting the seasoning as desired, then pour over the lamb shanks and serve.