Endless hours have been spent imagining a world without oil as net zero looms decades in the future.
In London, however, stock exchange chiefs face the prospect of a more immediate – and more worrying – oil crisis: life without Shell.
Just two years after ditching the Dutch and delighting Britain’s Brexiteers by moving to the UK, Britain’s biggest company is now discussing leaving for New York.
London, says chief executive Wael Sawan, is devaluing his company. It can’t provide the capital, its politics are too turbulent and its taxes are too unpredictable. Just having a London address is pulling his share price down.
“I have a location that clearly seems to be undervalued,” he said in an interview published by Bloomberg on Monday.
He pledged to keep cutting costs to try and boost the company’s share price but added that if that did not work “we have to look at all options. All options.”
This is not the first time he has hinted at a move. Last July he reflected on the warm welcome extended to him by the New York Stock Exchange (NYSE) when he met investors to set out Shell’s plans to cut costs and maximise profits.
“The welcome we had there was exemplary. The Shell flag was waving next to the New York Stock Exchange flag,” he said.
Sawan’s peers think the idea of moving to the US is outlandish. Ben van Beurden, Sawan’s predecessor, told the FT Commodities Summit in Lausanne last week: “The company is massively undervalued…the share price today is at an all-time high, but it could be significantly higher from where it is today.” He said a host of factors “conspire against the [companies] listed in Europe”.
Sawan and van Beurden’s key complaint is that Shell is undervalued compared to its American peers.
On the face of it he’s right. Shares in US oil majors like Exxon and Chevron listed in New York are valued at around 12 to 13 times their earnings, while Shell is valued at a multiple of just nine times earnings.
