Saturday 30 May 2009

(AFX UK Focus) 2009-05-30 15.04

LONDON, May 30 (Reuters) – Royal Dutch Shell Plc plans to cut 350-450 senior management roles as it restructures to cut costs and improve operational performance, according to a website to which Shell employees post internal information. The cuts represent almost 30 percent of Shell’s “Senior Executive Group” layer of management, John Donovan, the operator of the Royaldutchshellplc.com website said. 

Earlier this week Shell announced a major restructuring but gave no targets for job or cost cuts.

The Royaldutchshellplc.com website was the first to reveal news of the planned restructuring.

Shell declined to comment.

(Reporting by Tom Bergin, editing by Mike Peacock) Keywords: SHELL/ (tom.bergin@reuters.com; +44 207 542 1029; Reuters Messaging: tom.bergin.reuters.com@reuters.net)

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Paddy Briggs

on May 30th, 2009 at 10:57 am 

guest1: 

So, many people will go. This is inevitable since the numbers in the senior ranks grew out of all proportions. Since Herkstroter and Moody Stuart claimed in the mid 90s we were going to manage rather than do ourself this all started and now the ranks are swollen with self acclaimed managers who do not know what they are managing. So they are at the mercy of the consultants and service companies. And not only the numbers have swollen, there has been an inflation in the level of the jobs. Because if you have to manage rather than do, you are more important. Shell is now full of pointy haired bosses. And to top it all off: the number of senior jobs has increased, the levels of these jobs have increased but also the reward of the same levels has seen a dramatic increase in the more senior ranks. Couple that with the steep increase of especially american expatriates (the most expensive but also the most pliable ones) and it is obvious why costs have escalated beyond control. The corporate functions are now full of jobs with strange names that only shell insiders understand. A total disconnect with the rest of the outside world. (Example: Shell has no more reservoir engineers but ‘value creators’.) Drilling was the first with Drilling in the Nineties. Slogan: ‘When the rig goes, so goes the overhead’. The rigs came and went, the overhead only grew and the knowhow decined. Some 20 years ago the most senior driller was jgA. And good old Coen was on every brake in the world! Now there are umpteen jgB around who manage processes. After drilling, the rest followed. The results are evident.

The growth of corporate functions is publicly always frowned upon by the top but secretly they love it: more status, more jobgroup, less accountability because one can always blame someone else and the confusion grows exponentially. Ideal for politicians and people looking after self interest. The Parkinson principle demonstrated again! We see the same with politicians and civil servancies all over the world. They just grow whatever is stated by the people in charge.

Hofmeister was a master at remunerating the top. He tried first in a blunt way to increase the salaries of the CMD but was stopped by van Wachem and Jacobs. It maybe that van Wachem had already left as chairman but his views on this were known and still taken seriously. But Jacobs vetoed some salary increases (actually the only good thing he did). But Hofmeister knew how to operate the system. He increased the salaries of the subtop to the maximum and more. Injected willing americans. And soon he could go to the CMD and show that the minions were making more than the boys themselves and this would not do. Then the stampede for ever more money started seriously and we all know what happened on the reserve crisis, extremely poor project management, promises rather than performance. I hope someone will later write a book on all this corporate corruption. I have no other word for this. The top and their lackeys have been as bad as the worst examples amongst the bankers. Maybe good that Shell gets a banker at the top, it takes a thief to catch a thief?

So, Voser is right that something must be done. I hope he has the guts and stamina to transform Shell back to what it used to be in the successful years between the early 70s and the mid 90s. Could it be like fashion? If you wait long enough, it always returns? Somehow I have little hope because there are simply too many people with different self interests.

And the bad thing is : Shell definitely has the brains in the ranks and they can sort it if only they are let loose. They are merely very poorly led by people with the wrong norms and values. It really is that simple. If Voser has real guts, he will fire immediately after he is in charge a large number of people who were in charge and made a mess of things. Start with a clean slate and chose decent people. They exist. But the task to find them will be frustrated by all who have something to lose.

I will be watching it on the Donovan site. Thank you for providing this platform!

By John Donovan

On Tuesday we published the article below. It was subsequently used as the source of multiple news reports around the world, including the lead front page article of the Financial Times newspaper published the following morning, Wednesday 27 May. 

Later that same day, an article published by ROMANDIE NEWS quoted a Shell spokesman as denigrating the veracity of the information in our article, describing it as “pure speculation.”  

Shell then rushed forward the release of incoming CEO Peter Voser’s reorganisation plans which confirmed our information was in fact accurate. We published a leaked email from Voser hours after he sent it to Shell employees announcing his plans. Fortunately, a number of news organisations had already published because they had confidence based on past performance, that our Shell insider sources are reliable. 

The Times apparently liked our line “Funeral in Berlin“ 

We now have a precise figure for members of Shell’s senior executive group who are being shunted out in the mass culling. In the context of the overall number of SEG members, the figure has been described by one insider source as “HUGE”.  We have other related information. Members of the news media seeking details can contact me via john@shellnews.net

Cook’s sudden departure just the start of dramatic changes at Shell

THE WALL STREET JOURNAL

MAY 29, 2009, 9:53 A.M. ET

Edited Press Release

AMSTERDAM (Dow Jones)–The Stichting Shell Reserves Compensation Foundation Today announces Friday that the Amsterdam Court of Appeals has declared the Non-U.S. Settlement Agreement concerning the recategorisation by Royal Dutch Shell PLC (RDSB.LN) of certain of its oil and gas reserves binding.

The agreement provides relief in the amount of US$352.6 million to qualifying non-U.S. shareholders who bought Shell shares on any stock exchange outside the United States from 8 April 1999 through 18 March 2004.

The settlement amount includes a US$12.5 million payment which is to be distributed equally to all shareholders who submit a valid claim for relief, regardless of the number of shares held by the person or entity submitting a claim.

In addition to the US$352.6 million, an amount of US$28.4 million was made available to align the relief available under the Non-U.S. Settlement Agreement with the relief available under the U.S. Settlement. Shell furthermore agreed to pay interest as per 1 April 2008.

Parties to this agreement are Shell, institutional investors Stichting Pensioensfonds ABP and PGGM (on behalf of Stichting Pensioenfonds Zorg en Welzijn), the Vereniging van Effectenbezitters (VEB, the Dutch investors association representing individual shareholders in the Netherlands and similar organisations) and the Stichting Shell Reserves Compensation Foundation (the Foundation).

WSJ ARTICLE

SYDNEY (Dow Jones)–BP PLC (BP.LN) Friday said it has agreed to sell gas to Royal Dutch Shell PLC (RDSB.LN) and purchase it as liquefied natural gas after it has been processed through the Gorgon LNG project in Western Australia state.

EXTRACTS: A Dutch national has contacted me to express concern over a matter involving NAM, the company owned jointly by Royal Dutch Shell Plc and ExxonMobil Corporation. It may all be perfectly legal and a lucrative enterprise for the German companies involved, but is it ethical on the part of the NAM and the German companies bearing in mind potential exposure to the Dutch and German population during the long journeys involved and to the local populations in the relevant Germany cities where the processing takes place?

Shell will also set up a new division to handle project delivery and technology. It will be led by Matthias Bichsel, who is also Swiss. Some Shell employees complained on their website Royaldutchshellplc.com that a “Swiss Mafia” is running the group.