Peter Voser's retirement as chief executive of Shell took the City by surprise yesterday, while his stated motivation of spending more time with the family initially sounded a bit fishy.
At 54, Mr Voser is arguably a little young to hang up his boots. And with 30 new projects under way and less than four years in the top job, he can hardly say his work is done.
But upon further reflection, analysts said Mr Voser's decision to retire in the first half of next year looks both reasonable and wise. Far from being a failure, they regard Mr Voser's tenure as a success, saying he looks set to leave the company in much better shape than he found it.
Furthermore, while the quietly spoken Swiss national may have only been chief executive since July 2009, he has actually spent 29 of the last 31 years at Shell, his company loyalty only compromised once during a short stint at ABB, the Swedish engineer.
Mr Voser was Shell's chief financial officer for five years before landing the top job – which he took in 2004 shortly after the company was caught inflating its oil reserves, which damaged its reputation at the time but has since been well and truly eclipsed by the woes of its arch-rival, BP.
Andrew Whittock, an analyst at Liberum Capital, said: "I'm surprised about Voser's retirement, but there is absolutely no reason to think there is anything else behind it. Voser has delivered beyond expectations, both operationally and in terms of projects."
Iain Pyle, an analyst at Sanford C Bernstein, said: "His main legacy will be starting up some really big developments – oil sands in Alberta, the Pearl gas-to-liquids venture in Qatar and the huge LNG [liquefied natural gas] project, also in Qatar. He has also expanded significantly into North American shale gas and oil."
Analysts praised Mr Voser for clearly identifying some key growth areas and focusing the company on them hard – an endorsement clearly shared by the market, which has pushed the company's shares up by more than 50 per cent during his tenure, making it Britain's biggest company and Europe's largest oil producer as its market value overtook BP's.
LNG is produced by freezing gas to 1/600th of its normal size for long-distance export, while the gas-to-liquids venture turns gas into diesel and other high-value oil products. Although the LNG market is in its infancy, it has the potential to become huge in the coming years as Asia in particular demands increasing amounts of gas.
Shell's business extracting oil from the Canadian tar sands is also thriving, but its scope for continued development is limited by the lack of a pipeline that would enable producers to transport much larger volumes of hydrocarbons over long distances, which would significantly increase its market. A 1,664-mile pipeline from Canada to Texas, the Keystone XL, is planned but is in danger of being blocked on environmental concerns.
Similarly, the fledgling market for shale gas outside the US – it is already highly developed in North America – is potentially huge, but Shell's progress in Europe and elsewhere could be hampered by concerns about the technique used to extract the hydrocarbons.
Gas, and increasingly oil, is produced from shale by blasting a mixture of sand, chemicals and water into the rock at high speed to release the hydrocarbons. The practice has been linked to earth tremors and water pollution.
The environmental concerns notwithstanding, Mr Voser has overseen significant progress in most of the areas he has targeted. But his tenure hasn't been an unalloyed success. Shell's six-year quest to produce oil in the Arctic has so far cost about $5bn, and has yet to produce a single drop of oil. A series of setbacks culminating in the grounding of the Kulluk oil rig off Alaska on New Year's Eve has badly damaged Shell's reputation, prompting questions about whether it will ever succeed in the Arctic. Shell insists it is committed to the region. Nigeria also continues to dog the company in the form of lawsuits relating to oil spills, thefts from its pipes and strikes.
However, Shell has had a far smoother ride than BP in the three years since the oil spill. Since then, Shell's shares have jumped by 12 per cent to give it a market capitalisation of £140bn. By contrast, BP's shares have fallen more than a quarter, valuing it at £80bn, as the spill badly dented its reputation and prompted it to sell more than $50bn of assets to meet the costs.
Even that might not be enough. BP has budgeted for about $42.2bn of spill-related costs but admits the eventual bill could be much higher – up to $50bn higher in a worst-case scenario. BP has stolen a march on Shell in the Arctic – finalising a deal in March with Russian oil giant Rosneft that left it with a 19.75 per cent stake in the company and an agreement to explore jointly in the region. But analysts say it has trailed Shell in the rapidly growing gas markets. "Shell has performed better than BP and is in better shape. BP has just been so heavily affected by the Macondo spill," says Mr Pyle.
Although Shell's oil reserves increased by about 2.5bn barrels to 13.2bn under Mr Voser, they still trail BP, at 16.8bn. But, while important, there is more to oil-company life than reserves. The early front-runner for Mr Voser's job looks to be Shell chief financial officer Simon Henry, who refused to rule himself out of the race yesterday.
In contrast to BP boss Bob Dudley, his most pressing task will be to carry on Mr Voser's work, ensuring the projects under construction come in on time and budget. It would also be good if he could clear up the mess in the Arctic.