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Bloomberg: Shell Chief Executive to Stay in Post Until June 2009 (Update3)

By Fred Pals

March 28 (Bloomberg) — Royal Dutch Shell Plc, Europe’s biggest oil company, said Jeroen van der Veer will remain chief executive officer until June 30, 2009, in a statement intended to make clear its strategy and leadership in the coming years.

Van der Veer became chief executive in October 2004. He turns 60 in October of this year, the usual retirement age for a Dutch chief executive.

Van der Veer replaced Phil Watts, who departed earlier in the year after The Hague-based company admitted to overstating its reserves. Shell’s reserves announcement in January 2004 hurt the company’s reputation with investors and led to lawsuits and fines by regulators.

“Van der Veer has done an excellent job steering the company in the right direction after the reserves scandal, and Shell now looks favorable compared to BP,” said Jorrit van Spaendonck, who helps oversee about $3 billion, including Shell shares, at SNS Asset Management in Den Bosch, the Netherlands.

High oil prices have swelled Shell’s profits under Van der Veer, and last year it regained its position as Europe’s biggest oil company by market size, as its rival BP Plc dealt with Alaskan pipeline leaks and the aftermath of a Texas refinery blast.

Tarnished Jewel

Both companies failed to improve production last year, though, with Shell’s output hurt mostly by militant attacks in Nigeria. The company also suffered multibillion-dollar cost overruns at the Sakhalin-2 oil and natural-gas venture in Russia, which Van der Veer once called the “jewel in the crown.”

Eventually, Shell was forced to sell half its majority stake in Sakhalin to Russia’s state-run OAO Gazprom. Shell got no assets in return, making it harder to replenish its reserves.

Van der Veer will turn 60 about five months after Shell’s shareholder meeting on May 15. He has always wanted to hold the chief executive’s job for five years, Peter van Boesschoten, a Shell spokesman, said by telephone today.

“Normally, a CEO in the Netherlands who turns 60 after the annual shareholders meeting is set to step down,” van Boesschoten said. “We have flexible pension rules and we wanted to create clarity in our strategy and leadership.”

Van der Veer won’t extend his contract beyond 2009, Wim van de Wiel, another Shell spokesman, said by phone from The Hague. He will “definitely” step down then, Van de Wiel said.

“Jeroen’s decision today provides clarity, and I am most pleased that he will stay on longer, providing valuable continuity and leadership in Shell over the next years,” Shell Chairman Jorma Ollila said today in a statement distributed by PR Newswire.

To contact the reporter on this story: Fred Pals in Amsterdam at [email protected]

Last Updated: March 28, 2007 05:05 EDT

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