Sydney Morning Herald (Australia): Shell goes Dutch as reserves cut again: “the news was overshadowed by a further downgrade by Shell of its "proven" reserves of oil and gas” (ShellNews.net)
By Christopher Hope in London
Saturday October 30, 2004
Shell has announced a long-awaited restructuring under which the company will have a Dutch chairman and chief executive and a single headquarters in the Netherlands.
The radical move, which requires shareholder approval, is likely to be seen as a Dutch takeover of the energy giant, which is 40 per cent owned by shareholders in the UK-listed Shell Transport & Trading and 60 per cent by investors in the Netherlands' Royal Dutch.
However, the news was overshadowed by a further downgrade by Shell of its "proven" reserves of oil and gas.
Earlier this year the company revealed that 4.47 billion barrels, or 23 per cent, would have to be cut from the proven or commercially exploitable reserves tally.
Now it says that after checking its reserves again, it considers another 900 million "proven" barrels questionable, and further revisions are possible because it has only checked - for the third time - 55 per cent of its 14 billion proven barrels.
Under the restructuring plans, announced on Thursday, Shell will scrap the two holding companies, their boards and the committee of managing directors that runs Shell.
Instead, there will be a single company, Royal Dutch Shell, which will be registered in the UK and have its primary listing in London, with an expected market capitalisation of about £100 billion ($245 billion).
Royal Dutch Shell will be based in The Hague, where it will pay tax and where it will initially hold its annual meetings. Its chairman will be Aad Jacobs, the current chairman of Royal Dutch, and the chief executive will be Jeroen van der Veer, chairman of the committee of managing directors.
Lord Oxburgh, Shell Transport's chairman, who will retire from the board next year, strongly denied that Shell's UK arm had allowed itself to be taken over.
"That is a total misrepresentation of the situation," he said. "This is a win-win situation. It is a win for the shareholders, and it is a win for the two parent companies."
Only 10 of the 19 non-executives on the boards of Royal Dutch and Shell Transport will be on the new board. Lord Oxburgh said half of the 10 would be expected to stand aside within the first three years, to allow "new blood" to join the board.
The news came with Shell's third-quarter figures, showing a 115 per cent jump in pretax profit to $US10.3 billion on sales up 35 per cent to $US89.46 billion. The result was helped by high oil and gas prices.
The Telegraph, London