Century-old Oil and Gas Giant Shell Will Move and Change Its Name

The century-old oil and gas giant Royal Dutch Shell announced a major adjustment plan to streamline the company's structure and change its name as it moves.

On November 15, Shell issued a statement on its official website stating that the company will abandon its dual-shareholding structure and move its global headquarters from the Netherlands to the United Kingdom.

In 2005, Royal Dutch Petroleum and Shell Transportation and Trading Company merged to form a group company. Shell is registered in the UK and has a tax registration in the Netherlands, maintaining a dual shareholding structure. Shell said that it did not envisage that the current A/B shareholding structure will be permanent.

Shell pointed out that the move is to increase the speed and flexibility of the company’s capital and investment portfolio. It will strengthen Shell’s corporate competitiveness, speed up the distribution of shareholder income, and help the company achieve its goal of becoming a net zero emission company.

After the headquarter is moved to the UK, Shell shares will continue to be traded in the stock markets of Amsterdam, London and New York, but CEO Van Burden and CFO Jessica Ull will move to the UK.

In Shell’s view, by simplifying and standardizing the company’s shareholding structure, the company will be aligned with other competitors and most global companies and reduce shareholder risk. Improve Shell's ability to meet the challenges of the energy transition through more flexible management of its product portfolio.

After the news came out, it caused quite different reactions in the UK and the Netherlands.

The Dutch government is very dissatisfied. The Dutch Minister of Economic Affairs and Climate Policy, Stef Blok, said: "We are surprised and unpleasant. The Cabinet deeply regrets this."

Bullock said: "We are discussing with Shell management the impact of this proposal on employment, key investment decisions and sustainability. These are all very important."

Reuters stated that Shell’s move was a blow to Dutch prestige. The Confederation of Dutch Industry and Employers called this a "great blood loss" for the Netherlands.

Shell said that it will also have a large number of operations in the Netherlands, including project and technology departments, global upstream and integrated natural gas business, and renewable energy centers, which will remain in The Hague, the Netherlands.

On the other side of the strait, Britain welcomed it.

The Secretary of State for Commerce, Energy and Industrial Strategies, Kwasi Kwotten, said: “In our efforts to enhance competitiveness, attract investment and create jobs, this is a clear vote of confidence in the British economy.”

In addition, Shell also plans to abandon the title of "Royal Dutch" that has been in use for more than 130 years. Shell said that after the proposed changes, it may no longer meet the conditions for using the "royal" name. Therefore, it is planned to change the company name from Royal Dutch Shell Co., Ltd. to Shell Co., Ltd.

According to foreign media reports, Shell has been facing investors’ doubts about its dual structure for a long time, and has recently faced pressure to transition to clean energy.

In addition, Shell and the Dutch government are still at odds with imposing a 15% dividend withholding tax on certain stocks. This policy is considered to reduce Shell's attractiveness to international investors.

After the implementation of the new unitary structure, all Shell shares will be under the jurisdiction of English law, which means that all Shell shares will not be subject to this tax. This will also enable Shell to reach a sale or acquisition deal faster.

At present, the plan is still in the proposal stage and needs to be approved by at least 75% of shareholders at the shareholders meeting held in December.