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Financial Times: Van der Veer extends Shell tenure

By Ed Crooks in London
Published: March 28 2007 14:10 | Last updated: March 28 2007 22:04

Jeroen van der Veer, chief executive of Royal Dutch Shell, will stay in office a year longer than had been planned and step down in June 2009, the company said.

Mr Van der Veer, who took over in 2004 as the company was reeling from a reserves misreporting scandal, had intended to leave in June next year, when he will be 60. But the company said he agreed with the board that a year later would be “an appropriate period for the succession”.

Jorma Ollila, Shell’s chairman, said Mr Van der Veer’s decision provided clarity. “I am most pleased that he will stay on longer, providing valuable continuity and leadership . . . over the next years.”

There is no obvious successor to Mr Van der Veer inside the company. Rob Routs, executive director of the downstream business, is about the same age and will step down at the end of next year. Malcolm Brinded, the executive director for exploration and production, has been tipped as the front-runner, although he will be 56 when Mr Van der Veer steps down.

Tony Hayward, the chief executive designate at BP, will be 50 when he takes over on August 1.

Shell’s previous policy was for directors to leave at the annual general meeting after their 60th birthday but that has been changed to comply with the legal requirement of the country where they are based.

In Mr Van der Veer’s case, that means the Netherlands, which would allow him to go on until he is 65 but Shell made it clear that he was not expected to extend his tenure beyond 2009.

Mr Van der Veer was relatively unknown when he was appointed: his previous role was as a group managing director with the unglamorous chemicals business as one of his main responsibilities.

He is credited with having steadied the company after the reserves scandal, introducing a more streamlined management structure, with the head office in the Hague, to replace the dual-company arrangement that had been in place since Shell Transport and Trading joined Royal Dutch Petroleum in 1907.

The true value of his contribution will not be apparent until the next decade. Under Mr Van der Veer, Shell has committed itself to a programme of heavy investment in “unconventional” oil sources such as Canada’s oil sands and the production of diesel fuel from natural gas.

Shell’s shares closed up 14p at 1,694p.

Copyright The Financial Times Limited 2007

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