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Unification

CityWire: Shell merger moves market

CityWire: Shell merger moves market

Tuesday 28 June 2005

By: Douglas Bence, Companies Correspondent

The most antiquated corporate structure in the world was dead and buried today as shareholders in Royal Dutch Shell and Shell Transport and Trading voted to merge.

For 98 years, both companies had their own shareholders and boards of directors, but attempted to trade as one unit. The antiquated structure became increasingly burdensome, inefficient, expensive and eventually disastrously counterproductive.

Seven years ago Shell was the world’s largest quoted company in the sector, but in terms of revenue and production, it has since fallen behind BP and Exxon. read more

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The boards of Royal Dutch Petroleum and Shell Transport and Trading will be merged

Daily Telegraph (UK): The week ahead: The boards of Royal Dutch Petroleum and Shell Transport and Trading will be merged into one with a single chairman and chief executive

Monday 27 June 2005

A guide to company results and meetings, and economic statistics (Filed: 27/06/2005)

Shareholders of oil giant Royal Dutch/Shell are expected to vote in favour of a restructuring programme at Tuesday’s annual meeting that will simplify the firm’s complex dual-board structure.

The boards of Royal Dutch Petroleum and Shell Transport and Trading will be merged into one with a single chairman and chief executive. read more

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Shell to end going Dutch and unite

THE BUSINESS: Shell to end going Dutch and unite

Sunday 26 June 2005

By: Richard Orange June 26, 2005

THIS Tuesday, Royal Dutch/Shell’s management team go their separate ways. Chairman Jeroen van der Veer is off to The Hague, taking with him refining head Rob Routs and gas chief Linda Cook. Exploration head Malcolm Brinded stays in London, bringing along retiring chairman Lord Oxburgh.

Management might act as one when deciding on what terms to accept for one of the company’s multibillion dollar mega-projects, as the company has always claimed, but each director is subservient to the board of one half or other of the separate listed arms of Royal Dutch Petroleum and Shell Transport and Trading. read more

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Yahoo! News: Shell shareholders prepare to vote on historic merger

Yahoo! News: Shell shareholders prepare to vote on historic merger

Sunday 26 June 2005

LONDON (AFP) – Royal Dutch/Shell shareholders will vote Tuesday on historic plans to merge the oil giant’s two holding companies following an internal crisis caused by the overestimation of proved energy reserves.

At separate annual general meetings in The Hague and London, shareholders were expected to end nearly a century of tradition by backing an overhaul of the group’s corporate governance structures via unification of Royal Dutch Petroleum and the British arm Shell Transport and Trading. read more

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The Independent on Sunday: Shell to sing a new tune

The Independent on Sunday: Shell to sing a new tune

Sunday 26 June 2005

Edited by Ben Schneiders

After last year’s reserves scandal, Shell shareholders will get the chance on Tuesday to approve a radical revamp of the company’s structure. They will vote on a proposal to merge the Dutch and British holding companies to form a single entity, to be called Royal Dutch Shell.

For nearly a century, Shell has operated under dual ownership, but this came under heavy fire in 2004 after the group slashed its proven oil and gas reserves by 20 per cent. The scandal claimed three top executives and severely dented investor confidence in the corporate structure and management. read more

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Scotland on Sunday: Chaos looms as Shell’s halves unite at last

Scotland on Sunday: Chaos looms as Shell’s halves unite at last

Sunday 26 June 2005

IN THE CITY

IAIN DEY

SHELL runs the risk of spreading chaos through the market this week via its efforts to clean up its reputation.

The oil giant is to seek shareholder approval for the overhaul of its complicated corporate structure that was demanded in the wake of last year’s reserves reporting scandal.

At separate meetings in London and Amsterdam on Tuesday morning shareholders will vote on the plans to unify the company’s Dutch and British halves into one organisation – which are likely to be approved by an overwhelming majority of shareholders. read more

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THE SUNDAY TELEGRAPH: Investors play the Shell game

THE SUNDAY TELEGRAPH: Investors play the Shell game

Sunday 26 June 2005

(Filed: 26/06/2005)

Shares in the oil giant have seen stronger rises than BP’s for a technical reason relating to its unification with Royal Dutch. Can the outperformance last? Sylvia Pfeifer reports

A deceptively simple new investment idea has been doing the rounds of the trading floors in the City in recent weeks: “Sell BP, buy Shell”. The idea has little to do with the fundamentals of the respective businesses of the two oil giants but a lot to do with the upcoming merger of Shell’s two operating companies, Shell Transport & Trading, its UK arm, and Royal Dutch Petroleum of the Netherlands. read more

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Shell unveils blueprint to boost output

Daily Mail (UK): Shell unveils blueprint to boost output

Brian O’Connor,

23 June 2005

SHELL plans to boost oil and gas output by a third in 10 years and to become a major trader in carbon-dioxide emissions.

But its ‘one board, one voice’ plan may need more work. It warned in London that global oil supplies are tight, implying that any setback could drive prices even higher. However, Shell Canada chief Clive Mather said in New York that a price fall was ‘almost inevitable’.

Group chief executive Jeroen van der Veer pointed out that stocks are at ‘pretty normal’ levels. read more

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Something quite seismic is happening at Shell, you can be sure of that

The Independent: Michael Harrison’s Outlook: Something quite seismic is happening at Shell, you can be sure of that

Thursday 23 June 2005

How many barrels are in a Big Cat and how many Big Cats make an Elephant? There is a new language at Shell to go with the new corporate structure which shareholders are being asked to approve next week. And while much of the terminology will remain comprehensible only to oilmen, there is a very palpable sense that what we are witnessing is the emergence of a new Shell.

In the space of a year, the chief executive Jeroen van der Veer has swept away a century of conservative, in-bred tradition. Five days from now Shell will shed its split personality and its historical baggage and re-emerge as a single company with one board, one chief executive and one headquarters. No big deal, the rest of the oil industry may say. But within Shell, the ramifications are seismic. read more

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Financial Times: Papering the cracks

Financial Times: Papering the cracks

Published: June 7 2005

When crude prices are high, oil industry acquisitions are tough to justify. But as Peter Voser, chief financial officer, reiterated, after the planned merger of Royal Dutch with Shell, at least the oil major could use its paper as currency for a deal.

Shell emphasizes that the ability to issue paper does not mean a significant deal is under consideration. It is committed to organic growth. A transformational deal, which would undermine confidence in this strategy, is unlikely. A merger with another international major would also face tough political and regulatory hurdles. read more

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Lex live: Royal Dutch/Shell

Financial Times: Lex live: Royal Dutch/Shell

6 June 2005

When crude prices are high, acquisitions are tough for an oil company to justify. But as Peter Voser, chief financial officer, reiterated on Monday, after the planned merger of Royal Dutch with Shell, at least the oil major could use its paper as currency for a deal.

Shell emphasises that the ability to issue paper does not mean a significant deal is under consideration. It is committed to organic growth and share buybacks. A transformational deal, which would undermine confidence in this strategy, is unlikely. A merger with another international major would also face significant political and regulatory hurdles. read more

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Shareholders may face big CGT charges

Financial Times: Shareholders may face big CGT charges

Posted 4 June 05

By Robert Budden

The planned unification into a single parent company of shares in Shell Transport & Trading and Royal Dutch Petroleum, the London and Netherlands arms of the global oil group, is raising concerns with some UK investors.

Under the scheme being put to shareholders later this month, UK holders of Royal Dutch shares who accept shares in the new unified Royal Dutch Shell will be treated as if they had sold their shares, potentially giving rise to a CGT charge.

The Association of Private Client Investment Managers and Stockbrokers, a trade association representing the UK’s retail client stockbrokers, estimates that around 2,000 UK investors holding shares worth around £80m will be affected. read more

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Mudlark: Does UK chairman face a Shell ‘nee’?

Financial Times: Mudlark: Does UK chairman face a Shell ‘nee’?

Posted 4 June 2005

By Clay Harris

Tick, tock. There are only 24 days to the annual meetings that will vote on proposals to create a unified Royal Dutch Shell. But there is still no sign of a chairman-designate to take over from Aad Jacobs next year (Mudlark, May 20).

Since Shell has committed itself to selecting an external candidate, logic might argue that the lucky man or woman should get a bit of a run-in before taking the hot seat. Shareholders might also appreciate a glimpse of the future team before they vote on June 28. read more

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Shake-up at Shell: what shareholders need to know

Daily Telegraph: Shake-up at Shell: what shareholders need to know

By Christopher Hope, Business Correspondent (Filed: 04/06/2005)

Shell, the Anglo-Dutch oil and gas giant, is only just emerging from its annus horribilis of 2004 when it revealed it had over-estimated its proven oil and gas by over a quarter.

The shock waves are still being felt, with Shell admitting it will be a few years before it finds more oil and gas than it pulls out of the ground.

The problems have forced the company to sort out its quirky dual structure, and complete the merger of Shell’s two controlling companies which has remained unfinished since the beginning of the last century. read more

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Dutch are ready if push comes to squeeze

Daily Telegraph: Dutch are ready if push comes to squeeze

4 June 2005

Fancy a Dutch squeeze-out? Such things are common in Holland, and not only on stag weekends in Amsterdam’s Red Light district.

Minority shareholders in Royal Dutch Petroleum who fail to accept the plan to scrap Shell’s arcane dual structure may be about to feel the squeeze. Royal Dutch needs holders of 95pc of its shares to agree to complete the merger with Shell Transport & Trading, which is a tall order for such a widely held stock.

Curiously, the company is unworried. If it falls short, it can mount its Dutch squeeze-out, and force the minority to take cash for their holdings. It can threaten to suspend dividend payments to the recalcitrant few. read more

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Shell admits rump of stock could trade with new shares

Daily Telegraph: Shell admits rump of stock could trade with new shares

By Christopher Hope, Business Correspondent (Filed: 04/06/2005)

Shell has admitted that a rump of shares in Royal Dutch Petroleum could still be traded alongside new Royal Dutch Shell stock if not enough investors accept the energy giant’s restructuring plans.

Shell has pledged to reform its 100-year-old dual Anglo-Dutch structure in the wake of its shock admission that it had overstated its proven oil and gas reserves by 25pc.

The oil major is 60-40 controlled by Royal Dutch Petroleum in the Netherlands and Shell Transport and Trading in the UK. Under the plans, they will be replaced by Royal Dutch Shell, with its main listing in London. read more

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Royal Dutch Shell merger voting date fixed

Lloyds List: Royal Dutch Shell merger voting date fixed

Martyn Wingrove

May 20, 2005

SHAREHOLDERS of Royal Dutch Petroleum and Shell Transport will finally vote on merging the group into one entity next month and benefit from a $3bn-$5bn share buyback programme.

The Anglo-Dutch group is unifying its management and ownership to form Royal Dutch Shell following last year’s oil reserves scandal and after calls from leading shareholders to improve corporate governance.

The previous company went through a rough period last year as it slashed more than a quarter of its booked oil reserves and sacked chairman Philip Watts and its head of exploration and production. read more

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Timetable proposed for unified Shell

Financial Times: Timetable proposed for unified Shell

Posted 20 May 05

By Clay Harris in London

Shares in the unified Royal Dutch Shell will begin trading on July 20 under the timetable announced yesterday by the Dutch-UK oil and gas group.

The schedule was in line with previously outlined proposals to create a single company – incorporated in the UK but with its headquarters in the Hague – after nearly a century of federation between Royal Dutch and Shell Transport and Trading.

The new structure was proposed after a series of reserves restatements in 2004 raised questions about the group’s corporate governance. The plan needs to be approved by shareholders and the UK High Court on June 28. read more

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Under which Shell a new chairman?

Financial Times: Under which Shell a new chairman?

By Clay Harris

Published: May 20 2005

Now that Royal Dutch Shell has its date for unification, it’s time to turn attention to the next task, finding a new chairman. Aad Jacobs intends to stand down at the 2006 annual meeting, when the board wants to have an external candidate ready to take his place. The search is being led by Lord Kerr of Kinlochard, deputy chairman and senior independent director.

But Mudlark understands that some candidates have raised a surprising objection – none of them wants to live in The Hague, a requirement seen as non-negotiable. In the case of US candidates, there’s a cheeky temptation to blame the proximity of the International Court of Justice. But even Lloyds TSB chairman Maarten van den Bergh, were he not disqualified by already being on the board, is said not to be keen about living in The Hague. read more

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Shell buybacks to target Dutch shares after merger

Reuters: Shell buybacks to target Dutch shares after merger

Posted 20 May 05

By Tom Bergin, European Oil and Gas Correspondent

LONDON (Reuters) – Oil major Shell said its $3 billion to $5 billion buyback programme this year would target shares originating from its Dutch rather than UK holding company, after a planned merger of the two on July 20.

The world’s third-largest listed oil group by market capitalisation announced the final terms for the unification of its two parents in a statement on Thursday.

The creation of a new merged firm, Royal Dutch Shell, is designed to improve corporate governance after a damaging reserves overbooking scandal last year, which many investors blamed on the complex management structure. read more

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Shell pays £63m in streamlining costs

The Guardian: Shell pays £63m in streamlining costs 

Terry Macalister

Friday May 20, 2005

Shell has been forced to pay $115m (£63m) in advisers’ fees and taxes to move from a dual-company structure to a more traditional unified board following its reserves scandal.

Documents released by the oil major last night make clear the huge cost of the shake-up, aimed to reassure investors that Shell’s management is becoming more streamlined.

A terse statement in the listings particulars states: “The aggregate costs and expenses payable by RDS [Royal Dutch Shell] group in connection with the transaction are estimated to amount to $115m.” Some will go to investment houses such as Deutsche Bank and ABN Amro, which are independent advisers to the British and Dutch arms of Shell respectively. Meanwhile, audit fees to KPMG and PricewaterhouseCoopers have soared from $32m in 2003 to $42m in 2004. read more

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Reuters: Shell sees board unification completed on July 20

Reuters: Shell sees board unification completed on July 20

Thu May 19, 2005 7:38 AM BST

LONDON (Reuters) – Shell said it expected to complete the unification of its Dutch and UK holding companies on July 20, a move designed to improve corporate governance after a reserves downgrade scandal.

The company said trading in shares in the newly unified group was expected to start on July 20.

Previously, the Anglo-Dutch oil group had a Dutch holding company — Royal Dutch — and a UK equivalent (Shell Transport & Trading) but many investors had said this structure was too complex. read more

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The Guardian: BP should consider the ‘mother of all mergers’ with Shell

The Guardian: BP should consider the ‘mother of all mergers’ with Shell

”Many Shell shareholders are antagonised by the slow speed with which the board is looking at reforms and many of its board members are discredited by previous failures.”

Terry Macalister

Thursday July 15, 2004

Global crude prices were back over the $40 a barrel mark yesterday amid reports of a doubling of activity in the UK North Sea, previously dubbed by sceptics the Dead Sea.

Sky-high prices have encouraged firms to spend more on exploration and development but not on merger and acquisition activity, partly because of strong equity values.

An interesting time, then, for a respected oil and gas expert to propose “the mother of all mergers” – a tie-up between BP and Shell. read more

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Shell tipped to merge UK and Dutch parents

The Times: Shell tipped to merge UK and Dutch parents

“Shell is under intense pressure to streamline its complex board structure after the reserves misreporting scandal”

By Carl Mortished, International Business Editor

July 14, 2004

Posted 15 July 04

SPECULATION mounted last night that Shell is considering making radical changes to its corporate structure, including a possible merger of its Dutch and British holding companies.

The embattled oil group yesterday appointed a US investment bank, Citicorp, and a British merchant bank, NM Rothschild, to advise it on improvements to its structure and corporate governance.

Shell is under intense pressure to streamline its complex board structure after the reserves misreporting scandal in January. The company was then criticised for having a management structure that lacked accountability and had poor oversight by the nonexecutive directors of Shell Transport and Trading, the UK holding company, and the supervisory board of Royal Dutch Petroleum. read more

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London Evening Standard: Shell signals big shake-up

London Evening Standard: Shell signals big shake-up

14 July 2004

SHELL has hired investment banks Citigroup and NM Rothschild to advise a structural review chaired by ex-diplomat Lord Kerr.

That gives a boost to hopes that the Anglo-Dutch group is readying itself for radical action, even a merger of its two companies.

Royal Dutch Shell, quoted in the Netherlands, is 60% of the group, London-quoted Shell Transport 40%.

The most radical solution would be a merger. But a Royal Dutch takeover of Shell Transport, which is valued at £39bn, could trigger horrendous tax bills. A nil-premium merger might be a better answer. read more

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The Guardian: Damaged Shell

The Guardian: Damaged Shell

“Shell wined and dined financial analysts and others who might influence opinion about the stricken oil company”

14 July 04

Last week’s Hampton Court flower show was undoubtedly a splendid venue when Shell wined and dined financial analysts and others who might influence opinion about the stricken oil company.

But while some board members, such as Malcolm Brinded, did a fine job meeting and greeting, his chairman Jeroen van der Veer seemed anxious to get away as quickly as possible.

It was an event of little consequence in the greater scheme of things but a symbol, perhaps, that the Anglo-Dutch company, with a history of poor communication with the outside world, finds it difficult to change, whatever its avowed intentions. read more

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Shell picks banks to advise on shake-up

Financial Times: Shell picks banks to advise on shake-up

“more evidence yesterday of its new-found willingness to embrace the outside world”

By Clay Harris

Jul 14, 2004

Royal Dutch/Shell offered more evidence yesterday of its new-found willingness to embrace the outside world by recruiting Citigroup and NM Rothschild to advise on its structural shake-up.

The oil and gas group was criticised fiercely for an inward-looking and unaccountable culture after it was forced to cut its proved oil reserves by more than 20 per cent. It rarely uses external financial advisers – except for transactions – so the appointment is a coup for the two banks. read more

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Shell Appoints Citigroup, Rothschild As Financial Advisors

The Wall Street Journal: Shell Appoints Citigroup, Rothschild As Financial Advisors

DOW JONES NEWSWIRES

July 13, 2004 7:36 a.m.

Edited Press Release

LONDON — The Royal Dutch/Shell Group of Companies said Tuesday that it has appointed Citigroup and N M Rothschild as financial advisors to the Steering Committee, chaired by Lord Kerr, reviewing Shell ‘s structure and governance.

On June 17, 2004, Shell confirmed that the review, first announced on Mar. 5, 2004, included possible simplification of the management structures of the Boards and the Group; improvements to decision-making processes and accountability and enhancing effective leadership for the Group as a whole. read more

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Royal Dutch/Shell close to shake-up

The Star.com: Royal Dutch/Shell close to shake-up

Saturday July 10, 2004

LONDON: Some of the most powerful figures within the Royal Dutch/Shell Group of companies are willing to concede shareholder demands for a unified board and a clearer management structure, the Financial Times reported, citing several people close to the situation.

Such a move would mark the end of a century-old governance structure whose effectiveness has been called into question by investors in the wake of the Anglo-Dutch oil group’s reserves crisis, the newspaper said. read more

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Royal Dutch/Shell is said to be under growing pressure to unify its board

The Times: Need to Know: Global Business Briefing: “Royal Dutch/Shell is said to be under growing pressure to unify its board”

July 10, 2004

Edited by Joe Bolger

Royal Dutch/Shell is said to be under growing pressure from investors to unify its board as the Anglo-Dutch oil group keeps all options open on its dual structure.

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S&P warns Shell to reform governance

Times Online: S&P warns Shell to reform governance

“credit rating will be cut unless “effective” reforms are introduced”

By Mike Verdin,

08, July 2004

Standard & Poor’s has raised the pressure on Shell to improve its corporate governance, warning the oil giant that its credit rating will be cut unless “effective” reforms are introduced.

Standard & Poor’s, which cuts its ratings on Royal Dutch/Shell debt after the reserves debacle at the Anglo-Dutch company, said that it had ended a review of whether further downgrades were needed.

However, while reaffirming its revised grades, the ratings agency warned that the outlook for Shell’s debt was “negative” and cautioned the company over the risks of maintaining current corporate procedures. read more

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The insidious charms of Shell’s dual votes: But just one factor in the foul up

Financial Times: The insidious charms of Shell’s dual votes: But just one factor in the foul up

By John Plender

Jun 21, 2004

Royal Dutch/Shell is to scrap its priority shares, which carry voting rights controlled by the management. Could this dual voting structure have contributed significantly to the problems that culminated in its cooking the books?

A new study of US dual class companies by Andrew Metrick of Wharton, Paul Gompers of Harvard Business School and Joy Ishii of Harvard University, available on the Wharton web site, throws interesting light on this question.* The economists find that large insider ownership stakes tend to improve corporate performance, while heavy control by insiders tends to weaken it. Performance in the study was measured by Tobin’s Q, an asset-value based proxy for stock returns. read more

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The Observer: Trial of two cities: London or the Hague?

The Observer: Trial of two cities: London or the Hague?

Investors who want to crack Shell’s structure must decide, writes Oliver Morgan

Sunday June 20, 2004

Disgruntled institutional investors intending to rattle the directors’ cage at Royal Dutch/Shell’s annual meeting this month face a basic question – where do we go?

This is not a reference to Shell’s decision to move the AGM from the planned Westminster venue (capacity 4,000) to the Docklands ExCel centre which can take 20,000 – a change that reflects expectations of a packed and rowdy meeting as often quiescent institutions join the ranks of irascible private investors to ask difficult questions in the wake of the reserves downgrading scandal. read more

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Sunday Telegraph: Shell coming to the end of going Dutch

Sunday Telegraph: Shell coming to the end of going Dutch

(Filed: 20/06/2004)

Shareholders are demanding wholesale reform, including the creation of a single company, writes Sylvia Pfeifer

Urban myth has it that Royal Dutch/Shell is so dedicated to ensuring it is prepared for all possible scenarios that its planning department once worked out what the oil giant would look like in the aftermath of a nuclear holocaust.

Myth or not, in many ways, the combination of four downgrades of its oil and gas reserves, management upheaval, regulatory investigations and shareholder pressure has struck the oil giant a series of devastating blows that even its planners would struggle to predict. read more

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Shell Weighs End Of Dual Boards As Pressure Rises

The Wall Street Journal: Shell Weighs End Of Dual Boards As Pressure Rises

By CHIP CUMMINS

Staff Reporter of THE WALL STREET JOURNAL

June 18, 2004; Page A3

Posted 19 June 04

LONDON — Royal Dutch/Shell Group said it is considering doing away with its nearly century-old, dual-board structure amid mounting pressure from big investors following the Anglo-Dutch oil company’s energy-reserve scandal.

Creating a single, unified board is among a number of options the company said it is considering to simplify its corporate structure. Royal Dutch Petroleum Co. of The Hague and London-based Shell Transport & Trading Co. jointly own Shell’s operating companies, holding 60% and 40%, respectively. The company is run by a committee of managing directors, a group of executives who act as Shell’s top management body. The committee answers to separate boards from each parent company. read more

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Shell Weighs Modifying Dual Setup

The New York Times: Shell Weighs Modifying Dual Setup

By HEATHER TIMMONS

Published: June 18, 2004

Posted 19 June 2004

LONDON, June 17 – The Royal Dutch/Shell Group said on Thursday that it would consider changing its century-old two-company structure to create a unified board.

In the past, the British-Dutch company has been cool to calls for a simplified structure. But Shell is now striking a more conciliatory tone as it grapples with the fallout from a scandal surrounding its overstatement of proven oil and natural gas reserves. In March, the chairman, Sir Philip Watts, was ousted and succeeded by Jeroen van der Veer. The chief financial officer was removed in April; the company is considering a permanent replacement who has a history of shaking up companies, investors say. read more

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