One of the issues surrounding the takeover of BG by Royal Dutch Shell that most commentators have missed is that it will make RDS even more of an “Upstream” company than it is now. The exploration and production of hydrocarbons is ALL that BG does.
It is also by far Shell’s core business. In the circumstances it makes little sense for RDS to continue with its “Downstream” (Refining, Marketing, Chemicals, Trading …).
These Shell-branded businesses cry out to be freed from the yoke of having to exist in a largely alien world where they are starved of attention and capital.
The option of separating what might be called “Shell Marketing” from the Upstream and floating it off as an entirely separate, and separately traded, corporate entity is overwhelming. There is even a tall office on the South Bank of the Thames which would make it an excellent home!
Paddy Briggs worked for the Oil Company Shell for 37 years, retiring in 2002 to pursue other interests. He has a monthly column in the pensions magazine Pensions Age (“Pensions People”) and was for four years one of two pensioner-elected Trustee Directors of the £13 billion Shell Contributory Pension Fund.
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