SHELL DEEDS NOT WORDS THAT COUNT

Shell’s disdain for its governing constitution, Shell Business Principles

Dec 2nd, 2014 

by John Donovan. 

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By John Donovan

A few days ago I published an article pointing out that the Shell Business Principles document, proclaiming Shell’s core values and setting out the ethical platform on which Royal Dutch Shell supposedly operates, is conspicuously out of date.

The version published onshell.com still bears the name of Peter Voser who resigned as Shell CEO in controversial circumstances a year ago.

The document is accessible in multiple languages on shell.com. Those in Dutch, Chinese, German, Italian, Norwegian, Polish, Portuguese, Russian, Spanish, Thai, Turkish and Vietnamese – are all signed by Peter Voser.

A very slow transition seems to be in progress. We have found a Shell Code of Conduct document signed by Ben van Beurden, the current COE.

However, on a number of Shell websites e.g. the UK, Nigeria, Shell Sarawak and Oman, the Shell Business principles document is signed by Jeroen van dear Veer, who was CEO three CEO generations ago.

Here is a screen shot from the document on the Shell UK site taken 2 December 2014.

Perhaps, somewhere in the far flung Shell empire, there is one still signed by Sir Henri Deterding, or even Moses.

If current senior Shell management has such little regard for the Shell Business Principles, why should Shell employees, ethical investors, or anyone else, treat the principles as anything other than empty words that do not need to be heeded.

We have received encouraging Shell insider comments about the leadership qualities of Mr Ben van Beurden. Whoever has direct responsibility for the global uniformity of the Shell General Business Principles and making sure they are current, is badly letting him down, bearing in mind that Mr Van Beurden is ultimately responsible. 

Looking at the guidance over fighting corrupt practices, to my certain knowledge, Shell has been guilty on almost all counts. Ask the Irish Shell supplier, OSSL. The principles were supposedly in operation for the whole period of the Corrib Gas Project, which was mired in corruption at the hands of Shell.

Whatever the status of the claimed Shell ethical code, irrespective of whose name appears, it is deeds, not words, which count.

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Posted in: Africa, Ben van Beurden, Bribery, Business Principles, Corporate Governance,Corrib Gas Project, Corruption, GoogleNews, Jeroen van der Veer, John Donovan, OSSL,Peter Voser, Royal Dutch Shell Plc, Russia, Shell, Sir Henri Deterding.

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BP shares have rallied

Shell bid for BP?

Dec 2nd, 2014 

by John Donovan. 

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By John Donovan

Since May, we have posted a number of articles suggesting that a Shell bid for BP is in the pipeline.

Shell BP Mega-Merger?: 29 May 2014

It is therefore interesting to note that Reuters has today published speculation on the same subject under the headline: BP shares rise, traders cite talk of bid from Shell

Extract

(Reuters) – Shares of UK energy major BP rose more than 3 percent on Tuesday afternoon, with several traders citing market talk of a takeover bid from rival Royal Dutch Shell.

Royal Dutch Shell and BP declined to comment. Shares of Shell were up 2.5 percent.

“BP shares have rallied on the back of enthusiastic buying on talk of Shell’s interest in the company,” said Chris Beauchamp, analyst at IG. “But it seems difficult to believe that Shell would make such a big acquisition at this difficult time for the oil market.”

A fresh slide in the price of crude had wiped tens of billions of dollars off oil companies’market value on Friday and signalled an end to the sector’s safe-haven status, as fears mounted over future profits and dividend payouts.

FULL ARTICLE

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Posted in: BP, John Donovan, Oil Prices, Reuters, Royal Dutch Shell Plc.
Tagged: BP · Oil · Oil Prices · Royal Dutch Shell Plc · Shell BP Merger

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DID ZUCCALA ACTED ON HER OWN ?

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Swiss Role in Aggressive Tax Avoidance by Shell

Swiss Role in Aggressive Tax Avoidance by Royal Dutch Shell

Nov 30th, 2014 

by John Donovan. 

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By John Donovan

The lead article in The Sunday Times Business section today (authored by Simon Duke and David Smith) says that Britain is at the forefront of a crackdown on corporate tax avoidance – a blitz on tax avoidance by multinationals.

The UK Treasury  is planning a consultation on forcing multinationals like Royal Dutch Shell to declare how much tax they pay in every country in which they operate.

Extract

Country by Country reporting would introduce greater transparency into the complex structures used by big companies to minimise their tax liabilities…

It is therefore interesting to note that earlier this year, two organisations – Stichting Onderzoek Multinationale Ondernemingen (SOMO) aka Centre for Research on Multinational Corporations and Friends of the Earth Europe, jointly published a 23 page report entitled “The Role of Switzerland in Shell’s Corporate Structure and Tax Planning.”

It is focussed on Shell’s Tax avoidance and points out the distinction between tax avoidance (unethical) and tax evasion (outright illegal).

EXTRACT

SOMO and Friends of the Earth Europe jointly took the initiative to clarify the role of Switzerland in Royal Dutch Shell’s corporate structure and tax planning. The aim of the research is to highlight the use of low-tax and secrecy jurisdictions by Shell in order to minimize its tax payments in other jurisdictions. This research should be seen in the context of Shell’s extensive global network of mailbox companies in tax havens like Bermuda, the Cayman Islands and the Bahamas, where they pay very little or no tax over their profits. Switzerland was chosen as an example because there are indications that Shell may be using Switzerland for tax purposes, at least since 2005, when the company shifted ownership of its brands and trademarks to a Swiss-based subsidiary, Shell Brands International AG. This company was registered in the canton of Zug, which is a very popular location for multinational corporations because of its particularly low income tax rates for foreign companies and because of Switzerland’s high secrecy regulations, in combination with Switzerland’s extensive network of double taxation treaties. It is hypothesised that Shell’s presence in Switzerland is potentially leading to significant tax losses for developing countries because Shell is able to use the specific advantages of the Swiss financial system (and other secrecy jurisdictions and tax havens) to lower its profits in developing countries, leading to lower tax payments there. Different Shell subsidiaries in Switzerland may play similar roles as Shell Brands International AG and have also been included in the research for this report.

A number of people, including a Swiss tax justice expert, reviewed the report which was supplied to Shell in advance of publication to give the company the opportunity to conduct a fact check and provide missing information. As could be predicted, Shell was not forthcoming.

The royaldutchshellplc.com website is cited as an evidence source for an internal Shell document.

Shell’s tax avoidance machinations are such that the Guardian is quoted as concluding that, “legally speaking, Shell is now simultaneously a British public company, tax-resident in Amsterdam, whose brands are Swiss.”

The report concludes by making recommendations to Shell, including that the company should implement full country-by-country reporting, to live up to their claims of leadership in tax transparency. Policy recommendations are also made to the Swiss Government and to the European Union to end the facilitation of aggressive tax avoidance by multinational corporations. (Closing paragraph from the report).

RELATED

Shell risked offshore workers lives to dodge Alaskan tax bill: 9 April 2014

Shell company DNA: price-rigging, tax dodging, flawed wonder fuels and a cover-up culture: 2 June 2013

A taxing time for Shell: 31 May 2013

Shell and ABN Amro ‘masters in tax avoidance’: 1 April 2013

Starbucks a novice at tax dodging compared with Shell: 7 December 2012

ROYAL DUTCH SHELL HISTORY OF TAX AVOIDANCE: 1 October 2011

Royal Dutch Shell Plc Tax Dodgers: offshore – and out of reach to the Revenue: 3 February 2009

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Posted in: Business Principles, Friends of the Earth, GoogleNews, John Donovan, Oil, Oil Company Profits, Royal Dutch Shell Plc, Shell, Shell Tax Avoidance.
Tagged: John Donovan · Royal Dutch Shell Plc

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Too honest to sign Shell’s Business Principles?

CEO Ben van Beurden T

Nov 30th, 2014 

by John Donovan. 

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By John Donovan

It is a year since Peter Voser left his job as Chief Executive of Royal Dutch Shell Plc to allegedly spend more time with his family. Soon after his surprise early exit, Shell announced a profits warning. 

Leaving that contentious issue to one side, I am puzzled that his replacement Ben van Beurden has still not put his name and signature  to the Shell General Business Principles document.

As can be seen, as of todays date, it is still displayed on shell.com signed by Peter Voser in his capacity as Royal Dutch Shell Chief Executive Officer.

What is supposed to be an important ethical code pledging honest transparent trading unpinning the entire Royal Dutch Shell business, is woefully and conspicuously out of date. 

This has been pointed out to Shell several times in the last year, but the document remains out of date thereby undermining the credibility and competence of the company and its senior management.

Doesn’t anyone care?

Perhaps Ben van Beurden does not one to put his name to a sham, given that Shell’s track record proves that in reality, the oil giant does not abide by the pledges trumpeted in its claimed business principles. 

EXTRACT

The Form 20F declarations about Shell’s claimed hydrocarbon reserves filed with the US Securities & Exchange Commission ten years contained multiple references to Shell’s business principles. This was in an effort to bolster confidence in the false information provided. The huge scandal involved the Shell Group Chairman Sir Philip Watts (later sacked) at a time when Ben van Beurden was his private assistant and advisor. 

Mr van Beurden has shown himself to be more honest that his predecessors, candidly admitting that he puts shareholder commercial interests before what he described as geopolitical considerations – Russia’s invasion and annexation of Crimea.

He may be a religious man who simply does not want to associate his name with such a discredited, dishonest ethical platform.

There must be some logical reason for the withholding of his name and endorsement for a whole year from such an important undertaking. 

EXTRACT

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Posted in: Ben van Beurden, Business Principles, Corporate Governance, GoogleNews,John Donovan, Royal Dutch Shell Plc, Shell, Shell Oil Reserves Scandal, Sir Philip Watts.
Tagged: Ben van Beurden · John Donovan · Peter Voser · Royal Dutch Shell Plc

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OPEC KEEN TO SELL ALL WHAT THEY HAVE WHILE OIL IS STILL VALUABLE

Repercussions Of Lower Oil Prices On Energy Sector

Nov 30th, 2014 

by John Donovan. 

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Published: November 29, 2014 at 11:11 am EST
By: Micheal Kaufman

The decision by the Organization of Petroleum Exporting Countries (OPEC) to maintain production at 30 million barrels of oil per day came as a shock for most oil companies. As a result crude oil prices fell drastically and West Intermediate Texas (WTI) was down 10% yesterday, to $66.15.

The fall in oil prices has severely affected numerous economies and companies. It was far more than what was expected by experts. Last month, before deciding to take on investment projects, BP plc. (ADR) (NYSE:BP) assumed Brent crude oil prices would be at $80. Goldman Sachs had predicted the price of WTI would hover around $75 for the first three months of next year. Russia had expected average crude oil prices to remain at $100 and had planned its budget accordingly.

US energy stocks also suffered as investors dumped them. Among the most-affected companies were Continental Resources (NYSE:CLR), Exxon Mobil (NYSE:XOM), BP, and Royal Dutch Shell plc. (ADR) (NYSE:RDS.A). Continental Resources saw its stock decline by 19.9% yesterday, to $41. Exxon, BP and Shell are currently trading at $90.5, $39.32 and $66.4, each falling 4.1%, 5.4% and 6.9%, respectively.

The most influential member of OPEC, Saudi Arabia had indicated that the curb in oil production would have allowed the US to capture Saudi Arabia’s market share. Thus, it was necessary for OPEC to maintain production, driving down prices and making it unprofitable for a lot of US companies. Companies such as BP and Shell are clearly suffering due to the lower oil prices as they have higher costs of production.

According to a Shell spokesperson, the company, before taking on an investment, must be certain that it is able to break even at $70 per barrel.

Although many oil producers are expected to suffer, oil consumers are bound to benefit. According to the International Air Transport Association, jet fuel constitutes around 30% of an airline’s cost, thus allowing the global airline industry to save $7 billion on fuel costs compared to 2013. This has seen airline companies such as Delta Air Lines, Inc. (NYSE:DAL) and American Airlines Group Inc. (NASDAQ:AAL) reporting year-to-date (YTD) returns of 32.08%.

The decline in commodity prices has also led some airline companies to hedge their current positions and lock on lower oil prices in order to gain if prices were to rise again. One such company is Ryanair Holdings plc. (NASDAY:RYAAY), which hedged 90% of its expected full-year consumption. The lower oil prices also contributed to falling raw-material prices. Anglo American plc. (ADR) (OTCMKTS:AAUKY) indicated that each $10 fall in oil price allows the company to earn an extra $44 million in annual earnings.

Falling oil prices have also led companies and asset managers around the world to restructure their investments by moving away from the energy sector. UK-based Fastnet Oil & Gas PLC. indicated giving back $25 million to its shareholders by moving out of the energy sector and going into medical technology. Asset managers also are pulling out investments from energy companies. Aberdeen Asset Management did the same and took out its investment from Nigeria and reinvested it in Turkey, which is a big oil importer.

SOURCE

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Posted in: Bidness Etc, BP, Exxon Mobil, Nigeria, Oil, Oil Company Profits, Oil Prices,OPEC, Royal Dutch Shell Plc, Russia.
Tagged: BP · ExxonMobil · Gas · Nigeria · Oil · Oil Prices · Royal Dutch Shell Plc · Saudi Arabia

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