• Natural Gas News

    Shell to drop “Royal Dutch,” move to London


Shareholders seem in favour of a November proposal to change tax residence.

by: Daniel Graeber

Posted in:

Complimentary, Natural Gas & LNG News, Europe, Corporate, Financials, Political, Tax Legislation, News By Country, Netherlands, United Kingdom

Shell to drop “Royal Dutch,” move to London

Shareholders at Shell backed a move to place its headquarters in London, simplify its dual share structure and remove “Royal Dutch” from its legal name, the company reported December 10. Excluding the 57.8% of votes that were withheld, 99.77% voted in favour of the changes. 

Shell in November proposed moving its tax residence and headquarters from the Netherlands to the UK. The move followed pressure in the Netherlands to beef up its targets on reducing emissions after a Dutch court ordered the company to commit to more ambitious targets for cutting Scope 1 and 2 emissions, and introduce a goal for Scope 3 emissions.

Shell will remove the "Royal Dutch" from its title that it has held for more than a century, and remove its dual-class A/B share structure, which gives some investors disproportionate voting rights.

"This resounding support from shareholders to amend Shell’s Articles of Association will enable a simplification of the company’s share structure and an increase in the speed and flexibility of capital and portfolio actions," Shell chair Andrew Mackenzie said. "The board believes that the simplification will strengthen Shell’s competitiveness and accelerate both shareholder distributions and delivery of its strategy to become a net-zero emissions energy business by 2050, in step with society."

Following the November proposal, Stef Blok, Dutch minister for economic affairs and climate, said the government “deeply” regretted the decision, adding there were profound concerns about investment decisions and payrolls.

Mackenzie, however, offered assurances that his company would still have a footprint in the Netherlands.

"We have considerable operations here in the Netherlands ... and that will not be changed one bit by the possible change in location,” he was quoted by Reuters as saying.

The company is not without its critics in the UK either. A spokesperson for Edinburgh-based consultancy Gneiss Energy said Shell’s decision to not play a role in the Cambo oil and gas field west of Shetland was a major blow to operations in the North Sea.

"Whilst making a case that it was an economic decision, it does seem more likely to many external observers that Shell has bowed to political and societal pressure, particularly from those who have used the development decision on Cambo as a watershed moment for the debate in the UK North Sea," a Gneiss spokesperson said.

Shell pulled out from the project operated by Siccar Point Energy citing insufficient economics, but the decision comes after months of intense scrutiny over the project's environmental impact.

Siccar Point is waiting for government approval to develop a first stage that will target some 175mn barrels of oil and over 50bn ft3 of gas.