THE WALL STREET JOURNAL: Shell US Appointment Latest Step To Rebuild Reputation: “Shell's reserves scandal has dominated news about the company…” (ShellNews.net) Posted 19 Jan 05

By JOHN BIERS

Of DOW JONES NEWSWIRES

HOUSTON -- Supplementing its campaign to return to the elite of Big Oil, Royal Dutch-Shell (RD, SC) has tapped an American-born executive to manage the Anglo-Dutch company's U.S. division.

John Hofmeister, currently Shell 's Director of Human Resources, will transfer from the Hague to Houston March 1, where he will serve as U.S. country chair and President of Shell Oil Co. Aside from overseeing key oil-producing and refining assets, the U.S. country chair has traditionally served as one of the company's main representatives to U.S. investors and government officials.

Shell 's reputation nose-dived in the wake of its announcement one year ago that it was slashing its oil and gas reserves by more than one-fifth. While new disclosures about the scandal have proven embarrassing over the last year, Shell profits have continued to soar with high commodity prices, enabling the company's shares to outperform those of other scandal-ridden companies.

In October, Shell announced that it was streamlining its corporate structure to address longstanding criticism that its dual-management system was bureaucratic and opaque. In a little-noticed announcement in December, Shell 's U.S. division announced Hofmeister's appointment on its U.S. website.

Hofmeister, a Pennsylvania native who joined Shell in 1997 following stints at General Electric and Allied Signal, succeeds Lynn Laverty Elsenhans, who held dual positions as U.S. country chair and president of the company's U.S. downstream operations. In her new post, Elsenhans will remain in Houston as executive vice president of Shell 's global downstream, reporting to global downstream head Rob Routs. Hofmeister will report to Shell Chief Executive Jeroen van der Veer, said Shell spokesman Johann Zaayman.

Zaayman said Shell opted for a low-key announcement in December because of the lag before Hofmeister's arrival. The Houston Chronicle reported the shift in Saturday's editions.

"The role of the country chair has always been to represent the company in the country and build on its role and reputation," Zaayman said Saturday. "One of his key functions will be to rebuild the reputation of the company."

Although Shell's reserves scandal has dominated news about the company, the company has also suffered some recent missteps in the U.S. After motorists in Florida and Louisiana purchased tainted, Shell-produced gasoline last May, the company paid to repair fuel gauges for more than 80,000 cars.

Shell was also forced to backpedal from a plan to shut a small refinery in Bakersfield, Calif. Shell revived efforts to sell the plant after state and federal officials balked at the loss of refining capacity in the tight western market. Last week, Shell announced it was selling the refinery to Flying J Inc. (FCP.XX) in a deal worth $110 million.

By John Biers, Dow Jones Newswires; john.biers@dowjones.com; 713-582-5070