Oil major Shell to to cut Royal from title and move HQ to UK

Oil giant Royal Dutch Shell has announced a major overhaul to its business which will see it drop the first two words in its name and move its tax residence to the UK.

The company, which insisted it was not abandoning the Netherlands, said it would no longer qualify for the Royal Dutch designation following the proposed changes.

Board meetings will be held in the UK, and Shell's chief executives and finance bosses will be based in the country from now on.

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It also plans to cancel its slightly confusing dual-share structure. In London today shareholders can buy an A share or a B share in Shell.

A general view archive picture of the Shell Exploration and Production offices in Aberdeen. Picture: Andrew Milligan/PAA general view archive picture of the Shell Exploration and Production offices in Aberdeen. Picture: Andrew Milligan/PA
A general view archive picture of the Shell Exploration and Production offices in Aberdeen. Picture: Andrew Milligan/PA

By folding these share categories into each other the company would be "simpler for investors to understand and value", Shell said.

It will reverse a structure that the business took on in 2005 when Shell abandoned its dual-listed structure in the UK and the Netherlands.

Instead the two arms unified under one group, with a dual-share structure, an incorporation in the UK, and Dutch tax residency.

"It was not envisaged at the time of unification that the current A/B share structure would be permanent," the group said.

Chairman Sir Andrew Mackenzie said: "The simplification will normalise our share structure under the tax and legal jurisdictions of a single country and make us more competitive.

"As a result, Shell will be better positioned to seize opportunities and play a leading role in the energy transition."

But the move will cost Shell its Royal designation, which the company and its forerunners have held for more than 130 years.

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The company said it would "no longer meet the conditions for using the designation", and proposed changing its name from Royal Dutch Shell plc to just Shell plc.

Sir Andrew added: "At a time of unprecedented change for the industry, it's even more important that we have an increased ability to accelerate the transition to a lower-carbon global energy system."

Shareholders will be given a vote on the proposals next month.

Laura Hoy, equity analyst at financial services group Hargreaves Lansdown, said: “Ultimately, the new structure would be a net positive for shareholders as it will streamline the company and make it easier to manoeuvre moving forward.

“Aside from the fact that the shares they hold will no longer come with a ‘Royal’ designation, this new alignment won’t change much for investors.

“The long-term growth story for Shell still rests heavily on the oil price. For now, buoyant oil prices are keeping the group’s cash coffers topped up, which has had a positive impact on debt and given the group the means to boost shareholder returns.

“However, with the inevitable shift to more sustainable energy picking up steam we suspect the need to invest in greener operations will keep a lid on what the group can pass on to shareholders.”

AJ Bell investment director Russ Mould noted: “The London market was bolstered by the news Royal Dutch Shell is casting off its dual-share structure but unlike BHP and Unilever is not threatening divorce and has instead committed itself to the UK and remaining in the FTSE 100 index.”

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