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LEAKED SHELL INTERNAL COMMUNICATION FROM SENIOR EXECS

FROM A SHELL INSIDER

Following message was announced on the Shell intranet Dec 1st.

110 Lubricants staff in the Nordics will leave Shell and be transferred to the macro distributor Univar April 1st 2010. It was received with shock among many staff many are sad at being shoved out of Shell. While others are happy to perhaps be able to to some actual work instead of internal brawling in the future. Everyone has has been told terms will be on a similar level, but no details given yet. Many folks are worried about good Shell pensions being degraded.

The people affected will initially keep their jobs, but who knows how Univar will organize things in the future. At least Shell doesn’t have to worry about them anymore.

What is much more interesting, is this new trend. The word is, though not a word uttered by management so far, that many more MD’s are being set up for Shell Lubs. Apparently only 12 very large markets will be kept by Shell as direct sales. Everything else will be sold to MD’s. Mark Williams visited the Nordics this fall and though unwilling/unable to share details of strategy did call it “concentrating our footprint”. The Downstream workers who’d hoped that Transistion 2009 was mainly affecting E&P this time around, better brace themselves.

I appreciate your discretion as to my identity, so I may hopefully keep my job.

Intranet message to Shell employees from Shell VP’s Tony Patterson and Colin Abraham

01-Dec-2009

Shell has signed an agreement to appoint Univar as a “Macro Distributor” of Shell lubricants products in Sweden, Norway,
Denmark and Finland. Univar will be responsible for marketing, selling and distributing Shell branded lubricants in these four countries.

As part of this transaction, AB SVENSKA SHELL, OY SHELL AB, A/S NORSKE SHELL and A/S DANSK SHELL have each signed an agreement with affiliates of the Univar Group to transfer their local lubricants business to the relevant Univar affiliate.

Univar is one of the world’s leading independent distributors of industrial and specialty chemicals and related services. In the Nordic region, Univar is the market leader in its segment, serving some 5,000 customers.

This new distributorship is consistent with our continued efforts to increase global competitiveness and strengthen our ability to respond to market changes in the Lubricants business. Part of this response is in simplifying our route to market operations. In appointing Univar as a Macro Distributor, we believe we can offer even better levels of service to customers and improve business performance.

From previous experience in other countries, customers have benefited from working with more locally focused businesses that are already active in key channels and have extensive business contacts in the local markets. The model is a proven success in sustaining and growing Shell branded lubricant sales in countries where it has been implemented.

This appointment focuses solely on the domestic lubricants sales, marketing and distribution activities of the four Shell companies in the Nordics, including local Aviation and Marine lubricants businesses.

The agreements exclude the selling and marketing of lubricants to international Marine customers, to a small number of key global Lubricants customers and the selling and marketing of process oils.

Univar will also become a delivery service provider for Shell Marine Products’ international customers and key global Lubricants customers.

These business transfers do not affect any other Shell activities in the Nordics.

We anticipate that the transaction will be concluded in April 2010. The implementation and completion of the transaction is subject to the receipt of the necessary regulatory approvals.

Univar will be making presentations to the relevant lubricants-related staff in the next week when they will be able to answer staff questions.

Until completion of the transaction, business will continue as usual. Whilst this time of change is understandably unsettling, staff are asked to continue to focus on running the business with the same professionalism and dedication as always and with safety as the number one priority.

The NLT, the Nordics Lubricants leadership team, HR and line managers are all planning and working to make the transition period as easy and as short as possible for everyone and will keep staff informed on progress over the next period.

Tony Patterson, VP Nordics
Colin Abraham, VP Marketing, Strategy and Distributor Markets Shell
Lubricants

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