Shell chief’s early challenges

Those factors suggest the cost of energy will be structurally higher in the future than it has been in the past.

In the meantime, however, the industry may be in for a rough ride. Mr Voser’s task will be to steer Shell through that turbulence, which will bring both dangers and opportunities.

In some respects Shell seems particularly exposed to the more challenging environment. More than the other big international oil companies, it has committed itself to some relatively high-cost forms of production: Canada’s oil sands, liquefied natural gas and the conversion of gas into liquid fuels.

Although it has been financially conservative under Mr Voser’s stewardship, with very little debt, Shell has a more expensive capital spending programme than any other western oil company. It also has the biggest research and development budget, and has been an enthusiastic investor in renewable energy, sinking money into a variety of initiatives for developing “second-generation” advanced biofuels, for example.

Robin West, chairman of PFC Energy, a consultancy, says with a financial background, and no instinctive allegiance to any division of the business, Mr Voser is the right choice to take a clear-eyed look at Shell’s businesses and decide where it needs to go further, and where it should pull back.

“The industry is at a crossroads, and the ability to look objectively at the portfolio is the greatest asset he brings,” Mr West says.

Shell almost did not get its man. Earlier in the year, Mr Voser was thinking about returning to his native Switzerland. Having been back for just two years during his time at ABB, after 15 years travelling the world with Shell, the pull was strong.

His wife and children, who have been going through high school and university, have stayed in Switzerland. Although he denied suggestions that he wanted the chairmanship of UBS, the troubled bank, where he has been a key non-executive director, stories persisted that he could take some senior role there. There had even been suggestions he could have left the business world for another job in his homeland.

When it seemed that he might not be a candidate for the top post, however, he was given strong encouragement from both inside and outside the company to consider the role.

Both the other leading internal candidates – no external candidate was seriously considered – had supporters, but neither was seen as well-suited.

Linda Cook, the head of gas and power, has run a successful division, but some industry experts questioned whether she was sufficiently charismatic. Malcolm Brinded, the head of exploration and production, is skilled at dealing with governments, but was tarnished by Shell’s repeated writedowns of its reserves in the aftermath of the misreporting scandal that emerged in 2004. When the selection procedure began in September, led by Jorma Ollila, Shell’s chairman, Mr Voser had committed himself.

One of his first challenges will be to decide on potential deals.

In the last period of industry turmoil, at the turn of the decade, Shell stood by and watched as nimbler companies seized the opportunity to consolidate. Exxon bought Mobil, Chevron bought Texaco, Lord Browne built BP into a global performer with a succession of deals including Amoco and Arco in the US. Shell does not want to miss out again.

Mr Voser has a reputation as a quick thinker, a sharp mind who can cut through the inherent sluggishness of a vast and sometimes bureaucratic multi-national. Investors will hope he makes the right decisions to position Shell for the brighter days it hopes lie ahead.

A pragmatic incumbent

He and Shell were in the shadow of Lord Browne’s BP during the last years of the Blair era. But since Lord Browne’s departure, this situation is widely seen to have reversed.

EDITOR’S CHOICE

Lex: Chinese oil majors – Oct-29

Copyright The Financial Times Limited 2008

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