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ANALYSIS: A break with tradition at Royal Dutch Shell

Times Online
The Times
October 30, 2008

Bean counter becomes boss is an old tale in the City, but it is unusual for a finance director to lead an oil company.

The top job at Royal Dutch Shell, BP and ExxonMobil is normally guarded by a jealous fraternity of petroleum engineers – in the oil business you drill or distil your way to the top.

But the City still loves numbers guys, even as the public reputation of financiers tumbles, and Shell’s share price soared yesterday, building more distance between the Anglo-Dutch firm and its rival BP.

Still, the real reason that investors like Mr Voser will not make him popular within the company. With every dollar decline in the oil price, Shell’s investment plans become less certain.

Like its peers, Shell has been spending with gay abandon but at $60 per barrel much of the industry’s new frontier has fallen below the water line. A new round of cost-cutting must be in the offing and who better to impose financial discipline in a downturn?

Shell has done something untypical in promoting its CFO to replace Jeroen van der Veer but Jorma Ollila, the former Nokia boss who was brought in to head the Shell board, knew he could not afford to be seen to reward tradition.

For Shell, the old way of doing things ended in disaster with the reserves scandal in 2004.

Being Swiss, Mr Voser might end the pointless jockeying for position between British and Dutch executives and might even be less wedded to The Hague for Shell’s headquarters. Perhaps the Swiss chief should relocate everyone to a tax-friendly city, such as Geneva.

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