The Independent (UK): Shell's game of two halves comes to an end: “Shell has also created a single board, after blaming its dual-nationality structure for the disasters of recent years. It had been overstating its reserves of oil, and had to fess up last year. But only last week the company revealed the development of its Sakhalin natural gas field in Russia was 100 per cent over budget, a whopping extra cost of $10bn (pounds 5.8bn) which had not even been hinted at when Shell sold part of the field earlier this month.”: "You wouldn't bet there aren't other unpleasant discoveries still to be made and for new investors, BP is a better bet.": Saturday 23 July 2005

Stephen Foley

Jul 23, 2005

Shell, the Anglo-Dutch oil giant, has merged its Anglo half, Shell Transport & Trading, with its Dutch half, Royal Dutch. If you owned 100 Shell shares on Tuesday, you now own 29 Royal Dutch Shell 'B' shares. They fell a little on their stock market debut, but hang on to them "the company you own still has the same assets and prospects.

Shell has also created a single board, after blaming its dual-nationality structure for the disasters of recent years. It had been overstating its reserves of oil, and had to fess up last year.

But only last week the company revealed the development of its Sakhalin natural gas field in Russia was 100 per cent over budget, a whopping extra cost of $10bn (pounds 5.8bn) which had not even been hinted at when Shell sold part of the field earlier this month.

This track record stands in stark contrast to that at BP, its UK rival, but Shell shares have performed as well as BP's so far this year.

You wouldn't bet there aren't other unpleasant discoveries still to be made and for new investors, BP is a better bet. The consolation for existing shareholders is that the oil price is hovering at about $60 while the City still appears to value Shell on the basis of a long-term price of half that. A rising tide lifts all boats, even the rudderless ones

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