The Sunday Times: Shareholders can no longer be sure of Shell
By William Lewis
SHELL, led by the ghastly Sir Phil Watts, is blaming overambitious executives in Australia and Nigeria for booking immature reserves of oil and gas on its balance sheet.
The faceless folk at the Shell Centre near Waterloo in London have said that the finger should be pointed not at them, but at local management in the field. They say that offences took place when Shell used to be heavily decentralised, and that head office can therefore not be held responsible.
If that is a strategy dreamt up to help save Watts, then it is about as far from being brilliant as you can get. It won’t wash with investors, who have rightly had their doubts about Watts for some time.
He reeks of all the worst elements of the company — patronising, bureaucratic, secretive, lumbering and underperforming. And let’s not forget the arrogance. Watts could not even be bothered to turn up to a conference call meeting with investors on Friday to explain what had happened to the small matter of 20% of the company’s proven reserves.
If you can think of a company that shareholders should trust less, please let me know. I can’t think of one. You can no longer be sure of Shell.
Investors are correct to argue that the booking in the accounts of such a large amount of assets must surely have been reviewed at head office. And if that did not happen, why not? Let’s not forget that Watts was head of the company’s exploration and production division when the Australian and Nigerian fields were classified as proven.
After its calamitous announcement, the best Shell could offer up was an investor-relations manager (now that’s a good job to have), who said: “I think it is fair to say that, over a period of time, our appreciation of reasonable certainty has evolved.”
Well, here’s one reasonable certainty for you: Watts will soon be out of a job. And maybe there will be the chance for Shell to make a fresh start.
http://www.timesonline.co.uk/newspaper/0,,2769-958798,00.html
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