Business View: Shell's real location problem is finding more black stuff

Unifying the two Shells is so long overdue you can hardly believe it hasn't happened
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The Independent Online

Shell is changing. Historically it was awful at news management. Distant and arrogant, it felt that anything it said should be taken by the market and treated like solid gold. But the beast has evolved. The misreporting of reserves scandal showed all the worst Shell traits - secrecy, haughtiness, inertia. However, losing three senior executives and a great deal of face can be a real eye-opener. So Thursday's announcement showed the new Shell.

Shell is changing. Historically it was awful at news management. Distant and arrogant, it felt that anything it said should be taken by the market and treated like solid gold. But the beast has evolved. The misreporting of reserves scandal showed all the worst Shell traits - secrecy, haughtiness, inertia. However, losing three senior executives and a great deal of face can be a real eye-opener. So Thursday's announcement showed the new Shell.

But not in the way most people think. Unifying the two Shells into one company is so long overdue that you can hardly believe it has not happened. What it created is a company headquartered in The Hague but incorporated in Britain. This is not some Anglo-Dutch fix. This is solid pragmatism. The tax regime is better in Holland. The investment community is in London. If it were the other way round Shell might pay more tax and would not be in both the FTSE 100 and Eurotop indices. So far so good.

However, the real change at Shell is indicated by the timing of the announcement. Shell had been telling everyone that the review of its structure would not be complete until December. It maintained that a week ago when we spoke to them. Then, yahoo, it's suddenly ready.

So what's the hurry? Was it because Shell had to admit that it had uncovered another 900 million barrels of doubtful crude in its reserves and was likely to uncover 600 million more? The old Shell would have tried to sneak out an announcement like that. Or worse, would have tried to cover it up. Not the new Shell. The new Shell makes a bigger and bolder announcement to distract everyone's attention. But it has not really worked. Because whether it is based in London, The Hague or Timbuktu, Shell has to face up to the fact that it is pumping a lot more oil than it is finding. Unless it starts reversing this trend, it will be a much smaller company than it used to be. And no one will care where it was based because it will be gobbled up by someone else.

Diamond in the rough?

Deutsche has pretty bad figures and it is cutting back. Credit Suisse and UBS are expected to reveal poor figures and cutbacks. Commerzbank is wondering what it is doing in this business. Investment banking is not flavour of the month.

Except on Lombard Street, where Barclays is continuing to pump money into its Barclays Capital subsidiary. The BarCap boss, Bob Diamond, said he wanted to bring in up to 3,000 extra staff. He has since hired 750 at an estimated annual cost of £250,000 per person.

Goodness. Somebody is going to have to work pretty hard to make those figures stack up, given that fixed interest - the bedrock of BarCap's business - is where other big banks are suffering.

Maybe Mr Diamond has a magic formula. He certainly has a banker with the magic touch - Roger Jenkins, who delivers the bulk of BarCap's profits. ButBarclays has rather bet the farm on BarCap. Without it powering profits, the group looks a little pedestrian. So it is up to Mr Diamond and Mr Jenkins to buck the investment banking trend.

Stress strictures

This Wednesday is Stress Awareness Day. But before you say you are too much under the cosh to be bothered, consider this. According to consultancy Businesshealth Group, a law that came in five years ago law requires companies to assess the risks of stress at work for employees, and to identify the most vulnerable. But Businesshealth has found that two-fifths of companies have no stress management policy, let alone means of assessing it.

Stress is the largest cause of illness at work, losing 13 million days a year. It is the cause of the biggest growth in claims against businesses by employees. This ostrich mentalityof so many employersis only going to cost them in the long run.

j.nisse@independent.co.uk

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