National Post: Shell Canada CEO Linda Cook leaves after a year to head Royal Dutch Petroleum

James Stevenson

Canadian Press

Tuesday, May 18, 2004

CALGARY (CP) - Shell Canada's top leadership will change for the second time in a year after the company announced Tuesday that president and chief executive Linda Cook is leaving to return to its scandal-plagued European parent.

Shell said Cook will depart from the Calgary-based company in July, just a year after taking over, and assume a new role in August as a managing director with Royal Dutch Petroleum.

Clive Mather, now chairman of Shell UK Ltd., will succeed Cook as Shell Canada's president and CEO.

"It's a win for Royal Dutch," said oil patch analyst Martin Molyneaux of FirstEnergy Capital.

"It's certainly sending a message that they're bringing home their best and their brightest to take on front-line world-wide roles."

The move comes with Royal Dutch Shell under fire for downgrading its estimates of oil and gas reserves - after overestimates led to the resignation of some of the European energy giant's senior executives.

But it leaves looming questions at Shell Canada, wrestling with its long-term business plan.

The company is now a large player in the northern Alberta oilsands after bringing the $5.7-billion Athabasca project into production last year. Shell has a 60 per cent operating stake in the facility.

Yet Shell has not articulated the timing and evolution of future oilsands expansion, to give investors a sense of where it will be in the next decade or more.

And in January, Shell spooked markets by cutting reserve estimates at the Sable Island gas project off the coast of Nova Scotia by nearly 30 per cent or 50 billion cubic feet of gas after a third-party evaluation.

"It's pretty clear to see that Linda was a rising star in the Shell organization and it made investors in Shell Canada confident that she would do something positive and material with Shell Canada," said Molyneaux.

"Now we have to start that learning process again with a new individual at the helm. It's not great for Shell Canada shareholders, but it is a win for Royal Dutch."

Cook declined interview requests.

Before replacing Tim Faithfull at Shell Canada last July, Cook worked in London as head of Shell Gas and Power for three years. She has also worked on the global executive committee of Shell's exploration and production team.

Her successor, Mather, has been with Shell for 35 years and worked at all the company's major businesses, including assignments in Brunei, Gabon, South Africa and the Netherlands. In senior management, he has held Royal Dutch/Shell Group responsibility for information technology, contract and procurement, international affairs and leadership development.

Although Shell Canada trades publicly on the Toronto stock market (TSX:SHC), it is 78 per cent owned by Royal Dutch/Shell, one of the world's biggest oil companies, headquartered in London and the Netherlands.

The parent company came under scrutiny in January when it disclosed that its confirmed oil and gas holdings were 20 per cent, or 3.9 billion barrels, smaller than previously claimed. Shareholders were outraged and three top executives have since resigned, including chairman Sir Philip Watts.

Shell has since further reduced its estimates of proven holdings, bringing the total downgrade to 4.85 billion barrels.

After Shell Canada's annual meeting late last month, Cook said the scandal "impacts all of us, when there's a hit on your reputation like that, and knowing it will take years now to restore our reputation to the place that we think it should be."

Shell Canada is one of Canada's biggest natural gas producers and a major producer of sulphur and oilsands crude. The company has no conventional oil production in Canada, but operates a national gasoline station network under the Shell brand.

It generated a profit of $810 million on revenue of more than $8.8 billion last year and employed about 3,850 people at the end of 2003.

Shell Canada shares closed down 70 cents Monday at $65. The stock has a 52-week high and low of $66.40 and $49.76.

© The Canadian Press 2004

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