Age is not a barrier

Jeroen van der Veer will remain with Shell until the end of his contract

The head of Europe's largest oil company, Royal Dutch Shell, Jeroen van der Veer will remain in his post until June 30, 2009. An official representative of the corporation in The Hague told Bloomberg. According to him, the top manager will serve until the end of the five-year contract, although in the Netherlands it is customary for the managing director to leave his post after celebrating his 60th birthday. Mr van der Veer will reach this age in October. “Significant progress has been achieved in the company in recent years,” said Jorma Ollila, chairman of the company’s board of directors. “Jeroen’s decision today gives us clarity and I am extremely pleased that he will remain with us longer, providing valuable continuity and leadership to Shell over the next few years.” Mr. van der Veer himself said that he is focused on further progress within the framework of his chosen growth strategy.

The top manager will remain, even though Shell will soon lose 800 million barrels of oil equivalent of its reserves due to the transfer of control of the Sakhalin-2 project into the hands of Gazprom. But three years ago, the predecessor of the current head of the Anglo-Dutch giant, Sir Philip Watts, was expelled with scandal after a strong decline in the company's reserves, when it became known that information about them was unreliable.

Nevertheless , against the background of his fellow competitor Lord Browne of BP, who was recently forced to agree to leave his post early , Mr. Van der Veer's latest achievements look preferable in the eyes of experts and shareholders. Firstly, he managed to restore the company's image after an incident with reserves. Secondly, this year Shell returned the title of the largest oil company in the Old World, pushing BP out of first place. During his tenure, the company became worth 17% more expensive, while its British competitor was able to increase its capitalization by only 3%.

Investors, however, are slightly dissatisfied that the company was unable to seriously increase production and lost half of Sakhalin-2, but are not yet inclined to blame the head of the company for this. The majority believes that under such pressure from the Russian leadership, foreign owners of Sakhalin Energy shares had no chance of keeping them in their ownership. As is known, Shell has 55% in the project, 25 and 20% belong to the Japanese Mitsui and Mitsubishi, but at the end of last year, under the threat of a complete stop of the project due to environmental claims of Rosprirodnadzor, the shareholders decided to sell half of their shares to Gazprom. The fact that the Russian monopolist will become the controlling shareholder and will pay the previous owners $7.45 billion for this was announced directly at a meeting of the participants in the deal with the country's President Vladimir Putin. This money will cover the investments made by foreign investors, which the state should have reimbursed them anyway under the production sharing agreement.

Alexey GRIVACHS