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Shell Leaving would be an ‘eternal’ sin, but no disaster

English translation of an article published today by the FD

Commentator: Shell leaving would be an ‘eternal’ sin, but no disaster

Shell is considering moving its headquarters from The Hague to London. It should come as no surprise. The fact that it is seriously considering this step was already written in the stars when the promised abolition of dividend tax would not go ahead.

The energy giant is a British company, but has its headquarters in The Hague. This construction was chosen on the assumption that the dividend tax would be abolished. When that fell through after public pressure, Shell had to look for other constructions to solve the perceived complexity of the dual structure.

The double share structure creates restrictions, for example for issuing and purchasing shares and for large acquisitions.

Although Shell says it does not experience it as an ‘acute problem’, it does want a solution. This desire for simplification is understandable now that it is slowly shifting the course from oil and gas to new forms of energy and new revenue models. The route is still unclear, but the stormy developments in new forms of energy, such as hydrogen, green electricity, capture and storage of CO₂ and biofuels, call for a more agile and leaner company. This may also include acquisitions and therefore a more flexible organizational structure.

Historically, a departure from Shell, whose Dutch history goes back more than 100 years, would literally be ‘eternal’ sin. More than that: head offices also benefit the Netherlands. It gives status, acts as a training school for management talent, sponsors museums and other cultural institutions and provides employment and economic activity around the hundreds of headquarters jobs.

A possible departure from Shell after Unilever would therefore be a major damper, but the two companies are unique in their British-Dutch organizational form.

The business climate in the Netherlands is still excellent, so that fear of a major exodus does not seem justified. There is still a highly educated population, good IT and knowledge infrastructure, stable political relations and constructive unions. The Netherlands is also attracting new international headquarters, such as those of Uber, Netflix, Nissan and Nike.

Shell New Energies’ global headquarters, the branch that should form the cleaner future, is also located in The Hague. And one of Shell’s largest global R&D centers is located in Amsterdam. With a research budget of hundreds of millions per year and more than 1000 highly trained researchers from more than 50 countries, this gives hope for the future.


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