Shell Decides Against Update on Governance Next Week (Update1)

Bloomberg: Shell Decides Against Update on Governance Next Week (Update1)

Posted 17 Sept 04

Royal Dutch/Shell Group, Europe’s second-largest oil company, decided against updating investors next week on the progress of a review of corporate governance, saying it hasn’t ruled out any options.

Shell plans to announce the “preferred option” in November, Chairman Jeroen van der Veer told reporters in Vienna. Van der Veer said last month the company would update investors on Wednesday, when it releases its strategy review.

“Next week, we will concentrate on the strategy of the group,” Van der Veer said. “Even if you would like to say something (on the governance review) you can hardly say anything next week until you have made the selection.”

Van der Veer, 56, is trying to regain investors’ confidence after Shell said in January it had overstated proved oil and natural-gas reserves by a fifth. That led to an investigation by the U.S. Securities and Exchange Commission, the ouster of three top executives and the loss of Shell’s top-tier credit rating.

Investor calls for changes in Shell’s dual structure have increased since the reserve cuts, and Shell began a review in March. Shell Transport & Trading Co. of London and Royal Dutch Petroleum Co. of The Hague are run by separate boards, an arrangement dating from their 1907 merger.

Single Board

Moving to a single board of directors is the most popular option among investors, Goldman Sachs Group Inc. said in February. Shell, which is being advised by Citigroup Inc. and N.M. Rothschild, is studying issues such as tax implications of any changes in its structure, Van der Veer said.

“The art is really in the detail,” he said. “You have to keep all the horses in the race until the very last moment, just to make sure. And in the process, it takes some time.”

In July, Shell agreed to pay $150 million to settle SEC and U.K. Financial Services Authority investigations into the reserve cuts. Probes by the U.S. Justice Department, the Dutch securities regulator and the Euronext stock exchange are continuing.

Shell Transport shares in London were unchanged at 417 pence as of 10:40 a.m. The stock is up 0.4 percent this year, lagging the 13 percent gain at BP Plc, Europe’s largest oil company by market value.

To contact the reporter on this story:

Alex Lawler in London at [email protected]

To contact the editors on this story:

Tim Coulter in London at [email protected]

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