OIL giant Royal Dutch Shell has provided an apparent vote of confidence in the UK as the Scot who is the new chairman of the group unveiled plans for historic changes.
The group said it would move its headquarters from the Netherlands to London and drop the words “Royal Dutch” from its name, which it said had been a source of pride for more than 130 years.
Shell also plans to move its tax residence from the Netherlands to the UK and to simplify a shareholding structure which features two share classes.
Business minister Kwasi Kwarteng said on Twitter that the decision to relocate its group HQ to the UK provided a “ clear vote of confidence in the British economy”.
The Dutch government said it was “unpleasantly surprised” by the decision, with economic affairs minister Stef Bloc highlighting concerns about the implications for jobs, crucial investment decisions and sustainability.
However, Shell’s chairman, Sir Andrew Mackenzie, said the changes would leave Shell better positioned to seize opportunities and play a leading role in the energy transition.
The company has said it will use the profits made from its oil and gas operations in areas such as the North Sea to fund investment in clean energy systems. Its plans to develop the Cambo oil field off Shetland with Siccar Point Energy have stoked controversy.
“The simplification will normalise our share structure under the tax and legal jurisdictions of a single country and make us more competitive,” said Sir Andrew, who became chairman of Shell in May after running mining giant BHP for six years.
The current structure, which features A and B class shares, dates from the 2005 unification of Koninklijke Nederlandsche Petroleum Maatschappij and The Shell Transport and Trading Company under a single parent company.“It was not envisaged at the time of unification that the current A/B share structure would be permanent,” said the group, which will establish a single line of shares.
It added:“Notwithstanding Shell’s continued and significant presence in the Netherlands, we expect that the Company will no longer meet the conditions for using the honorary Royal designation. Carrying the designation has been a source of immense pride and honour for more than 130 years.”
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The group has faced challenges in the Netherlands in recent months. In May a court ruled that the group must move faster to cut emissions. Shell has mounted a vigorous defence of the action it is taking on emissions but has appealed against the ruling.
Last month a significant Dutch pension fund, ABP, said it planned to sell its holdings in fossil fuel producers including Shell, citing the need to accelerate the energy transition.
The group said the move of its tax residence could trigger a Dutch tax charge of up to $0.4bn.
Chief executive Ben van Beurden and chief financial officer Jessica Uhl will relocate from the Netherlands to London.
The changes proposed by Shell must win shareholder approval at a general meeting that will be held on December 10.
The group said: “Shareholders will continue to hold the same legal, ownership, voting and capital distribution rights in Shell, while shares will continue to be listed in Amsterdam, London and New York.”
It added that investors would hold the same number of shares as before and the simplification would not impact its dividend policy.
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