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R Dutch/ Shell to give no update of review

Financial Times: R Dutch/ Shell to give no update of review

“Six weeks ago, Shell, the world’s third largest energy group, revealed that its production was declining and that it was unable to find sufficient new sources of oil and natural gas to replace old fields.”

By Sundeep Tucker, Investment Correspondent

Published: September 11 2004

Royal Dutch/Shell has decided not to provide an update of its ongoing review into structure and governance when it unveils its revamped business strategy later this month.

The Anglo-Dutch group’s wide-ranging internal review, sparked by this year’s reserves debacle and management departures, is due to be concluded in November.

Last month, Jeroen van der Veer, group chairman of the Anglo-Dutch oil group, had signalled that Shell might release some details of the review alongside the unveiling of its latest strategy plan on Sept- ember 22.

But at a meeting with about 10 UK institutional investors last week, Mr van der Veer said that all decisions regarding future structural changes would be announced in November.

Investors said they accepted the situation.

One Shell shareholder who was present at the meeting said: “It is right that Shell separates business strategy from talk of future governance arrangements.”

Mr van der Veer was joined at the meeting by Sir John Kerr, a Shell non-executive and chairman of the five-man governance review panel, and three other key executives.

Shell told investors that the group’s new business strategy – which is believed to have been rubber-stamped at dual board meetings this week – will be aimed at helping Shell concentrate on finding more oil and generating higher margins.

One investor said: “It was heartening to hear that they plan to concentrate on the basics of the business.”

Six weeks ago, Shell, the world’s third largest energy group, revealed that its production was declining and that it was unable to find sufficient new sources of oil and natural gas to replace old fields.

Investors believe that Shell’s governance review panel is minded to recommend that the group’s dual board structure be unified and an independent non-executive chairman be appointed, although at the meeting the group’s executives stressed that no decisions had yet been taken.

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