Shake-up at Shell fails to quell City concerns

Shares in Shell gave up some of their gains yesterday as scepticism set in about the extent of the boardroom shake-up the oil giant is prepared to undertake following the ousting of its chairman Sir Philip Watts for overbooking of reserves.

There was also concern that the sacking of Shell's head of exploration and production, Walter van de Vivjer, who was widely seen as a future successor to Sir Philip, might indicate that the internal review of Shell's reserves booking policy being carried out by its audit committee had thrown up fresh problems.

The new Shell chairman Jeroen van der Veer, the president of its Dutch arm, will brief investors, analysts and journalists today following criticism of his failure to speak on Wednesday when Sir Philip's departure was annnounced.

Investors have been pressing the Anglo-Dutch company to abandon its dual-board structure and opt for a conventional unified board with a traditional separation of responsibilities between chairman and chief executive. However, the announcement that Lord Oxburgh, senior independent director of the UK half of the group, Shell Transport and Trading, had been made its non-executive chairman, has raised fears among shareholders that this may be the extent of the company's concessions.

That would mean Shell continuing with a dual board structure, with the Dutch, who control 60 per cent of the shares, in the driving seat. One shareholders said: "This cannot be the extent of the changes. What they need to do is appoint a conventional chief executive either from inside or outside."

Shares in Shell, which rose 2 per cent on Wednesday, last night closed 2.5p lower at 381p.

On Wednesday, Shell said that it was the "facts and circumstances" surrounding the 20 per cent cut in reserves announced on 9 January that had led the board to demand the resignations of the two men.