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Wake up, Shell, the days of big spending are over

Screen Shot 2014-01-03 at 14.32.05“On Friday the chickens came home to roost, with Ben van Beurden, who took over from Peter Voser last year, having to announce a painful profits warning just 11 days before the year-end results.” The article says that Shell shareholders are fractious, and if Ben van Beurden ignores their concerns, Royal Dutch Shell Plc will be a prime target for activist investors. I have news for The Sunday Times. That is already the case. No wonder Mr Voser was content to fly off early. As for BvB, it must be the shortest honeymoon in corporate history for the CEO of a multinational. The phrase “poisoned chalice’ comes to mind.

By John Donovan

Dominic O’Connell, the Business Editor of The Sunday Times has today sent a strong message to Royal Dutch Shell in his Agenda column under the headline: “Wake up, Shell, the days of big spending are over.”

The article says that although major shareholders have had a soft spot for Shell, even through the reserves scandal, “that love affair is on the wane.”

He says Shell seems to have missed the change in policy by other oil and gas producers in response to shareholder demands, who have stopped squandering cash on expensive new projects and instead are returning it to the owners.

Extract

“On Friday the chickens came home to roost, with Ben van Beurden, who took over from Peter Voser last year, having to announce a painful profits warning just 11 days before the year-end results.”

The article also says that Shell shareholders are fractious, and if BvB ignores their concerns, Royal Dutch Shell Plc will be a prime target for activist investors. I have news for The Sunday Times. That is already the case.

From what was stated in a Wall Street Article published yesterday, the new Chief Executive is likely to be receptive, as he apparently already had reservations about the “elephant projects” promoted by a previous Shell CEO, Jeroen van der Veer.

I note that a recent contributor to our Shell Blog who claims to be a “Pundit” suggests that other “much more interesting things are going on…”  We have already published an article earlier this month about rumors circulating inside Shell.

No wonder Mr Voser was content to fly off early.

As for BvB, it must be the shortest honeymoon in corporate history for the CEO of a multinational.

The phrase “poisoned chalice’ comes to mind.

ACCESS TO THE SUNDAY TIMES ARTICLE (SUBJECT TO SUBSCRIPTION)

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