The big news this morning is a restructuring at Royal Dutch Shell plc (NYSE:RDS.A) as the oil major welcomes a new chief executive on July 1st. The company is dividing its business geographically, into Americas and non-Americas divisions.
The first casualty of the new regime is Linda Cook, head of Shell’s liquid natural gas business, who fell on her sword today after being passed over for the CEO post. The company’s restructuring had re-organized (i.e., eliminated) her division. Cook was not a believer in alternative energy as a viable business for Shell and she said so. She wanted the company to put its money in biofuels.
Shell also plans to add a new division to take over its technology and construction projects, following the path of Exxon Mobil Corp. (NYSE:XOM). Shell’s inability to bring in major projects on time and on budget has really hurt the company in the past few years. The most famous case is the Sakhalin-2 project, which doubled in cost and led to a restructuring of the deal with Russia.
Shell’s RDS-A shares are trading down about 2% in the pre-market this morning, at $51.76. The 52-week range is $38.26-$86.98. The company’s RDS-B shares are off about the same amount, at $52.48. RDS-B shares have been trading in a 52-week range of $37.16-$85.43.
May 27, 2009