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The Times: Shell ticking over nicely again

Saturday 28 October 2006
By Graham Searjeant
BUSINESS COMMENTARY

WITH dogged Dutch precision, Jeroen van der Veer is slowly and carefully repairing the engine at Royal Dutch Shell and yesterday its pistons could be heard firing with a good, regular beat.

Problems have not disappeared and he gave no particular comfort on Sakhalin, where the signals from the Kremlin are getting more, rather than less tangled and confused. Still, the Shell chief’s approach looks right: address all the problems methodically, attend every meeting and give away nothing that is not owed.

More interesting is what is happening in the underlying business, where Mr van der Veer’s simple mantra — more upstream and more profitable downstream — seems to be paying off. Shell’s downstream business, particularly in the United States, used to be a bit of a mess, run in joint venture with Texaco. After years of tinkering, the company is now making good money and it left BP trailing in the third quarter.

Shell’s chief doesn’t wear the share price on his lapel but the upturn in fortunes that began in the summer is all the better today because it is about raw business performance.

This back-to-basics approach pleases the City and goes down well internally. Shell people (and others in the industry) have been bombarded with conflicting messages — more profits, more reserves, more margin and more growth, all the while making sure they don’t disturb a blade of grass.

The new Shell chief hasn’t buried the old messages but he is focusing on things that engineers can deal with — technical excellence and perseverance. Shell is the better for it.

http://business.timesonline.co.uk/article/0,,8210-2424145,00.html

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