Financial Times: Shell UK arm hails 'helpful' talks with angry investors
By Carola Hoyos, Clay Harris and Joanna Chung in London and Ian,Bickerton in Amsterdam
Mar 23, 2004
Board members of Shell Trans-port and Trading, the UK arm of Royal Dutch/Shell, the beleaguered European energy group, yesterday described their first meeting with shareholders since last week's new cut to reserves as "helpful and constructive".
The talks with "deeply upset" shareholders were organised by the Association of British Insurers. "When we said we were 'deeply upset', that reflected a real sense of frustration," said Peter Montagnon, ABI's head of investment affairs. He added: "The dialogue is not over and it will continue."
The meeting was held less than a week after the company admitted for the second time in three months that it had wrongly booked proved oil and natural gas reserves with the US Securities and Reserves Commission. In January, Shell slashed 20 per cent of its proved reserves.
At the session with leading shareholders in the ABI's London offices Shell was represented by Lord Oxburgh, non-executive chairman at Shell Transport and Trading, Sir Peter Burt, a non-executive director on Shell Transport and Trading's board, and Jyoti Munsiff, the company secretary and its top lawyer.
Lord Oxburgh called it "an excellent meeting", and said: "A whole range of matters was discussed. Nothing [was] ruled in, nothing [was] ruled out."
But Shell Transport and Trading's shares were down 2.2 per cent at 355.03p, while Royal Dutch traded at €37.77, down 1.4 per cent. Much of the rest of the sector was down because of fears of reserves restatements by other companies. BP was especially hard hit, trading 2.76 per cent lower at 441.735p.
UK investors are calling for better corporate governance at Royal Dutch/Shell and have pointed out that the large outside investors needed more power to influence important decisions, including senior appointments.
Many investors have advocated a unified board, with more independent and active members. Some have sought the end of Shell's century-old dual structure, while others continue to push for further changes among top managers.
Earlier this month Shell's board demanded the resignation of its top two executives: Sir Philip Watts, chairman, and Walter van de Vijver, head of exploration and production.
Dutch investors continue to focus on the outcome of Royal Dutch/Shell's review of its reserves accounting policy, and have refrained from commenting on wider issues, including management reform.