The Scotsman (UK): Shell's touch of arrogance as UK arm is sidelined: AT SHELL, it looks a case of the Flying Dutchmen.: “...it looks suspiciously like the Amsterdam end of the near-100-year-old joint venture enterprise have decided the Brits messed up on the reserves fiasco…”: “...the shots are going to be called in Holland as far as the new business is concerned…” (ShellNews.net)
29 Oct 04
The Royal Dutch/Shell Transport & Trading oil giant is ditching its complex, find-the-lady dual corporate structure which obscured accountability, replacing it with a new simplified company: one board, one chairman, one chief executive.
But it looks suspiciously like the Amsterdam end of the near-100-year-old joint venture enterprise have decided the Brits messed up on the reserves fiasco that provoked the corporate review and so have effectively decided to take control. That or the investment banking, legal and accountancy advice suggested the simplest solution was the easiest to implement.
Royal Dutch personnel, the impressively Teflon-coated Jeroen van der Veer and Aad Jacobs, take the top two jobs at the new company, Royal Dutch Shell, in the shape of chief executive and chairman respectively.
Peter Voser, the chief financial officer of Royal Dutch, takes the same post in the new organisation (Voser, being a Swiss, probably at least means any further warnings on reserves will be timely).
The new HQ of Shell, which continues to reserve its position on further shocks on its oil reserves, will be in Holland, with 200 administrative jobs in London transferring across the North Sea. Its tax domicile will also be in the Netherlands.
The 60/40 Dutch/British split of the shares in the old organisation will be retained if everyone takes up their entitlement after the restructuring goes to the AGMs next April.
And the ten non-executives in Royal Dutch Shell will be split six from Royal Dutch and four from the UK-quoted Shell Transport and Trading - in line with current share ownership.
There are two substantial sops to British sensibilities. The shiny new Royal Dutch Shell’s main capital listing will be in London (which is not that big a concession when you consider Euronext’s far lesser standing with international investors).
London will also be the base of the global downstream (oil products and chemicals) arm (so reserves will helpfully not come under its remit).
In the round, it looks like the shots are going to be called in Holland as far as the new business is concerned, but the stock market effects will fall mainly in London because that is where most movers and shakers invest.