A few years ago, the Shell oil and gas group considered not only leaving the Netherlands, but also leaving Europe and becoming an American company. The British economic newspaper Financial Times writes it when it spoke to insiders. Current chief executive Wael Sawan was also involved in the talks but would not be supportive of the American plans.
These plans are said to have been prompted by a valuation gap in the stock market. The value of American peers such as ExxonMobil and Chevron is much higher than that of Shell. American companies are worth about six times their free cash flow in a year. Shell’s stock market valuation is just three times its free cash flow.
Eventually it was therefore decided to leave the Netherlands and become fully British. Before that, Shell was a Dutch-British company with two headquarters. The move to the UK cost Shell the honorary title Royal.
Canadian Sawan, who succeeded Ben van Beurden as Shell’s top boss last year, still has plans to attract American investors. He himself was already in New York this year for talks and has commissioned a team to evaluate parts of Shell to see if any adjustments are needed.
Furthermore, plans to reduce the oil branch by 1 to 2% a year to meet the Paris emission targets are also not sacred. This path was taken by Van Beurden in 2019 under strong pressure from some shareholders. But Sawan and other chief executives were said to have been impressed by BP’s 10% gain on the stock exchange, also British, when it watered down its climate plans earlier this month.
Shell officially says it still supports its energy transition strategy. The company will provide an update for its investors in June.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
