You became CEO at the beginning of 2014. What have your first impressions been?
First of all I am very happy to have taken the job. Many things that I believed to be true have been reinforced: Shell has an incredibly strong reputation, we are seen as innovative thinkers and preferred partners. As I visit our projects, it’s fantastic to see how we bring technology to life and the truly remarkable breadth of what we do. Our people are really committed.
But at the same time a few things are not so pleasing. It is frustrating that, despite all the good things we do, we are not “moving the needle”. Our investors are yet to be convinced: we have not always allocated our capital spending well. We need to reflect more deeply on how we control our performance. I will be devoting a lot of effort to better focusing the capabilities and commitment of our people on the bottom line.
You took over as CEO at a time of international turmoil with events in Ukraine and Russia, as well as continuing uncertainty in the Middle East. How does the energy landscape look to you today and into the future?
There are many things happening. North America has seen a revolution in shale gas and tight oil. There is volatile economic sentiment around the world. To perform well in this environment we need a two-fold approach: first we must keep a fundamental, long-term view. We shouldn’t change our strategy, but instead look ahead through the turmoil and cycles. Shell has the financial strength to do that and the capacity to understand that the long-term view for our industry is positive.
Energy is fundamental to our lives and we will need all the sources we can get. We are in a growth industry. But we also need to understand what’s happening in the short-term and build resilience in our own portfolio, so we are able to cope with multiple scenarios. I don’t see that the turmoil will stop – it will likely intensify. There are growing tensions in global systems, with added pressure on energy, water and food. Tremendous resourcefulness is required to deal with the challenges.
Shell experienced a poor year for results in 2013 with the volatile security situation in Nigeria, tight refining margins, as well as low gas prices in North America. But our performance seems to have bounced back in the first quarter of 2014. Is that “job done”? If not, how will you keep up the drive to improve performance?
I’m very pleased with the recent results: it takes some of the pressure off and removes doubts that we were essentially on the wrong track. We saw highlights, such as our performance in our integrated gas activities.
But our problem areas remain: a very low return on our oil products business, while our tight and shale oil and gas business is not performing as it should. There is a discrepancy between the capability of our people and the bottom-line results. So we can’t go back to “business as usual”.
To ensure change, the most important lever I have on my desk is communication. But it can’t all come from me. Each person in the company must be clear on his or her own role and how they can have an impact: whether an engineer on the Mars B project in the Gulf of Mexico or someone marketing products in Malaysia.