No Mr Slick: The quiet man of big oil, van der Veer says prices need not be so high
Thursday 4 October 2007
The City Interview by Sam Fleming
RUNNING Royal Dutch Shell’s £130bn energy empire is in some ways like being in charge of a small country. Yet chief executive Jeroen van der Veer comes across more like a provincial postmaster than a swaggering oil supremo.
The 59-year-old-Dutchman is slightly gawky, with hesitant English and a penchant for long-distance ice skating. Lord Browne, his former counterpart at BP was known for his lavish lifestyle and expensive artistic tastes, but van der Veer is much more low key.
Over a plate of fish at the Daily Mail offices, he reveals he particularly likes visiting London’s National Gallery because it doesn’t charge an admission fee.
Despite his £2.5m-plus annual earnings, you won’t find van der Veer splashing out on Rembrandts for the living room wall. ‘The Dutch are like the Scots’ in their parsimony, van der Veer admits. ‘I don’t make a lot of purchases.‘
Beneath van der Veer’s unassuming exterior lurks one of the industry’s most dogged survivors.
The Shell career man emerged the unlikely victor of a bloody boardroom battle in 2004 after an accounting scandal. The revelation that Shell had been overstating its oil reserves cost van der Veer’s predecessor Phil Watts his job and sparked a welter of shareholder lawsuits.
Since then the Anglo/Dutch firm has been cleaning up its act by sharpening up accounting practices and scrapping its cumbersome dual board and dual stock market listing.
‘There is no point endlessly defending what happened in the past – we have to make very clear what is the future agenda of the company,’ van der Veer says.
Even in the depths of the reserves scandal, he adds: ‘I felt basically this was a strong company, if you look at the balance sheet and if you look at the portfolio of technologies we have.’
While across the Thames rival BP has lurched from crisis to crisis over the past two years, culminating in this year’s resignation of Lord Browne, Shell’s earnings have beaten analysts’ expectations for six straight quarters.
Its shares have risen 16pc over the past six months, while BP’s have been flat. That’s not to say the Shell supertanker doesn’t hit choppy waters. The big question hanging over the firm is where it will it find its oil in the future.
State-owned giants such as Gazprom or Saudi Aramco enjoy a stranglehold on the world’s remaining oil reserves and easily accessible crude is drying up.
That means Shell, Exxon, BP and their rivals face a future of scrabbling around at the margins – a sorry story compared with the glory days when the ‘Seven Sisters’ dominated world oil production.
The days of ‘easy oil’, or readily accessible reserves in places like the North Sea, are coming to an end, van der Veer admits.
His hope is that Shell will prosper by establishing technological supremacy over its rivals. An engineer by training, he started at Shell in 1971 following his military service and has eagerly upgraded the status of scientists and researchers in the company ranks since taking the helm.
He said: ‘If you look at the future, it is all about technology because the stuff (oil) is there, but it is either very deep in the ground or in difficult regions, or the Arctic. To unlock that you need technology.’
Talk of research and development is of little interest to Shell’s customers, who pay through the nose at the pump. read more
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