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Shell Picks New CEO For Difficult Times

Lionel Laurent10.29.08, 2:00 PM ET

LONDON-Anglo-Dutch energy majorRoyal Dutch Shell picked a new chief executive on Wednesday, choosing current chief financial officer Peter Voser to guide the company through a major economic slowdown and declining demand for oil. 

Current CEO Jeroen van der Veer will step down in mid-2009, as announced back in 2007, leaving Voser with some big shoes to fill. Van der Veer was the first solo CEO of Royal Dutch Shell(nyse: RDSA – news – people ), and was appointed to lead the company just before the merger of Royal Dutch Petroleum and Shell Transport & Trading in 2005. 

“Peter has the experience, qualities and personal leadership to drive Shell forward, building on the strong position established by Jeroen van der Veer,” said Jorma Ollila, chairman of Shell. 

Voser was already one of the potential candidates back in 2007, when van der Veer announced his retirement, but there had been some hope that the head of North America, Linda Cook, would be announced as the company’s first female CEO. (See “Shell CEO To Step Down In 2009.”

Shares of Royal Dutch Shell gained 9.2%, or 141 pence ($2.31), to 16.69 pounds ($27.41), in London on Wednesday. Rival BP (nyse: BP – news people ) gained 9.6%, to 505.75 pence ($8.31). 

The past few years have been volatile ones for Shell, with militant attacks in Nigeria disturbing production and the rising cost of exploration weighing on investment. But they have also been marked by buoyant demand and record oil prices: the unprecedented jump in oil prices this year to $147 helped Shell rake in $15.7 billion in replacement-cost profit for the first half of 2008, up 8.2% over the year. 

“Shell has done relatively many capital expenditures under Jeroen van der Veer,” said Peter Heijen, an analyst with Theodoor Gilissen. “I believe that has been the correct thing to do in a landscape of a tight supply-demand relationship in the future.” 

But it looks like the strong run of earnings growth may have peaked this year, as oil prices slip back to around $65 per barrel and recessionary fears put pressure on demand. The Organization for Petroleum-Exporting Countries has already acted to cut 1.5 million barrels’ worth of production, but it is tough to predict what situation Voser will inherit when he takes control.


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