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The Times: Shell chief sets date to leave and starts the race to replace him

March 29, 2007
Steve Hawkes

Shell, the £125 billion oil giant, may break with a century-old tradition and recruit a new chief executive from outside either the Netherlands or Britain, industry experts said.

The prediction came yesterday after it fired the starting gun for a succession battle by announcing that Jeroen van der Veer, the chief executive, would retire on June 30, 2009.

The Dutchman could have stepped down next summer after turning 60 this October. However, Shell’s board has persuaded him to sign a 12-month extension and continue the recovery plan that he put in place on taking over after the 2004 reserves scandal.

Lord Oxburgh, who stepped down as Shell chairman 18 months ago, told The Times: “I think Shell is becoming more and more nationality-blind. That was one of the benefits of the merger between Royal Dutch Shell and Shell Transport & Trading two years ago. When we merged the two halves of the business, we became an international company with an international board. They will look at internal candidates but will be looking at external ones as well.”

Mr van der Veer’s decision comes just weeks after Tony Hayward, 49, was named successor to Lord Browne of Madingley as chief executive of BP.

Malcolm Brinded, Shell’s head of exploration and production, is favourite to take over from Mr van der Veer. That would fit with Shell’s tradition of sharing the role between the Dutch and British halves that ran the business under the dual structure scrapped under the merger two years ago.

However, analysts said that Linda Cook, the head of Shell’s burgeoning gas and power business, was also a front-runner.

The American was parachuted on to the main board after the reserves scandal that forced Sir Philip Watts to quit as chief executive in 2004.

One industry source said: “Choosing Brinded would follow the Dutch-English tradition, but Cook would send a signal that Shell is a real multinational company. Age isn’t important, either. Look at Lee Raymond: he was still at Exxon at 68 and it didn’t do them any harm.” Historically, Shell directors have left after turning 60, but this rule was scrapped at the time of the merger.

Shell yesterday insisted it had not appointed headhunters and said that it was far too early to speculate on who may succeed Mr van der Veer.

In a statement to the stock market, Mr van der Veer said: “I am keen to further progress our delivery and growth agenda.”

He is known to want to oversee the development of projects in Qatar, Nigeria and Russia. He will eventually retire with a pension pot of more than £10 million.

Jorma Ollila, the chairman, of Shell, said: “Jeroen’s decision provides clarity, and I am most pleased that he will stay on longer, providing valuable continuity and leadership in Shell over the next years.”

In the running

Malcolm Brinded, 56, head of exploration and production. Clear favourite and faithful lieutenant to Jeroen van der Veer. Had to scrap production targets last month and has faced criticism over group’s safety record in the North Sea

Linda Cook, 48, head of gas and power. American parachuted on to the board from Shell Canada in the wake of the reserves scandal. Joined the Houston office at the age of 21

Peter Voser, 48, chief financial officer. Swiss national appointed managing director of Shell’s UK arm in October 2004. Joined the group in 1982. Member of supervisory board at UBS AG

Bob Dudley, 51, chief executive at TNK-BP. Rank outsider given his present employer, but industry insiders claim he is upset at missing out on the chance to succeed Lord Browne of Madingley at BP. Joined in 1998 Amoco merger

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article1582342.ece

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