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The Independent: Outlook: Royal Dutch Shell rings the changes as the man from Nokia gets the call

The Independent: Outlook: Royal Dutch Shell rings the changes as the man from Nokia gets the call

“With luck, the careless way in which Shell mislaid 4 billion barrels of reserves will be a dim and distant memory by the time he arrives next June and the company will have bedded down under its new unified structure. But the ‘enterprise first’ culture Shell claims to have inculcated has not stopped it from being accident-prone as the 100 per cent cost over- run on the $10bn Sakhalin project in Siberia demonstrates.”

Friday Aug 05, 2005

MICHAEL HARRISON

As one giant of the oil industry bows out, another takes his place. Well, maybe or maybe not. But Jorma Ollila, the next chairman of Royal Dutch Shell, has a long way to go to emulate Exxon’s Lee Raymond. Hindsight is a wonderful thing and with the benefit of it, Mr Ollila’s appointment as the first outsider to chair Shell really ought to have been obvious from the moment he announced on Monday that he was stepping down from top job at Nokia in a year’s time.

He is only 54, so he was hardly going to hang up on his career just yet. He is available, because he ceases to be chief executive of the Finnish mobile phone giant at exactly the same time as the Shell post becomes vacant. And he fits the most important criterion, being neither British nor Dutch. Shell insists there were candidates of both nationalities on the shortlist of half a dozen candidates drawn up by the headhunters. But the stop-gap chairman, Aad Jacobs, rather let the Big Cat out of the bag a fortnight ago when he confided that his successor would ideally be neither, to avoid upsetting the delicate balance of power within the company.

If hindsight is nice, then foresight is just as useful and it must be assumed that Mr Ollila knows what he is letting himself in for now that he is preparing to leave the cocoon that has been Nokia for the past 20 years.

With luck, the careless way in which Shell mislaid 4 billion barrels of reserves will be a dim and distant memory by the time he arrives next June and the company will have bedded down under its new unified structure. But the ‘enterprise first’ culture Shell claims to have inculcated has not stopped it from being accident-prone as the 100 per cent cost over- run on the $10bn Sakhalin project in Siberia demonstrates.

The pounds 500,000 salary Mr Ollilla will draw for working two or three days a week seems to be the going rate now for the part-time job of chairing a large multinational. But the fast-moving world of mobile phones, where what seems to matter more than anything is predicting the next teenage craze in handset design, could hardly be further removed from that of big oil and the ‘elephant’ projects in which Shell specialises.

That’s not the point, replies Shell. We have got what we were after ” a strategic thinker with a big vision. Mr Ollila is that, having spotted before almost anyone else that the mobile phone would one day take over the world. Whether Shell will do likewise, or at least wrest back number two spot from BP, will depend on Mr Ollila justifying all the gushing tributes he received yesterday.

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