Royal Dutch Shell Group .com

The Observer: A pearl in Shell?


Oliver Morgan

Sunday June 27, 2004


With so much ink spilled over the enigma that is oil giant Shell this year, investors could be forgiven for wondering what to do.


A sage City gent recounted last week how he had bought Shell shares in the spring at around 350p and intended to stay in there until they reached a fiver. Wise? Well, the sector has been soaring away on the high oil price and record second-quarter results are expected next month.


Shell - which has its AGM tomorrow - may take years to close the gap in fundamentals between itself and peers BP and Exxon, but that's not the point just now. A significant part of the problem comes down to what analysts call 'emotional' discount - effectively incomprehension and irritation at the company's obfuscation.


But concerns over transparency and complexity are problems Shell can deal with relatively quickly. It has already provided some information on the composition, remit and timetable of its internal review of corporate structure. Having started the process, it would be an act of folly to retrench.


Investors want to know the story from now on. Clarity should see the 'emotional' discount unwind - and with what is expected to be a strong oil market for the foreseeable future, who's to say Shell won't be at 500p by this time next year?,6903,1247938,00.html

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