Peter-Vincent Schuld

As a multinational company, you can’t easily do well in the eyes of many citizens and governments. Everyone is talking about climate change, safety during production processes, earthquake damage as a result of gas extraction and all it takes is for that to happen and the image of a company is quickly damaged by forming opinions that are not necessarily based on facts.

There’s nothing easier than parroting each other. I can already hear several of you shouting: “Are you standing up for a multinational like Shell?”
Yes, I am indeed standing up for a multinational such as Shell. I can drill in my garden for hours, but I can’t get a drop of oil out of it, unlike Dutch pride with the shell.

I think it is an achievement that this Dutch-British company has managed to be the global market leader in terms of brand and company in the field of oil, gas and nowadays also other forms of energy.

What is a company? A corporation is an entrepreneurial entity that aims to provide their owners, i.e. shareholders, with a return on their investments by making profits from business activities. What the hell is wrong with making pennies and getting a return on your investment. And what difference does it make whether they are relatively small investors or institutional investors. Here it smells a bit like jealousy towards individuals and companies that make money. In mainly left-wing circles, that is still a “dirty word” to this day.

Oil and gas have traditionally been among the most sought-after and necessary products that keep our economy running. So there are huge interests involved, both political and industrial. Because of these unimaginably large financial interests, by definition an oil company such as Shell is damn quickly in the dock and the institution of the condemned by the people’s court at the same time. This is often even before there are actually potentially improper facts. Companies such as Shell are also constantly plagued by accusations, libel and slander, but unfortunately hardly take action against them for fear of damage to their image and reputation.

Only a few decades ago, people praised the fact that the Netherlands could count on an enormous gas reserve that is being explored and extracted by NAM (a joint venture of Shell and Exxon Mobil) on behalf of the State of the Netherlands. Gas brought prosperity to the Netherlands. Whereas the natural gas revenues were first put into a pot for difficult times, now the revenues are part of the budget of the state treasury. The Netherlands flourished because of its gas reserves. Hundreds of billions were credited to her bank account by the State of the Netherlands. The whole of the Netherlands benefited from it, including the residents who often took to the streets with retention of benefits to demonstrate against that in their eyes damned capitalist system, not realizing that their livelihoods and protest clubs, whether subsidized or not, were partly financed by the income from natural gas revenues and the taxes that Shell also pays in the Netherlands.

Shell reminds me of the commercial spirit at the time of the VOC. Everywhere in the world where I have set foot, and then there are quite a few places, I have seen that yellow-red shell again and again and despite the fact that I do not own a share of Royal Dutch Oil, I still got a smile on my face because I come from a country from which this enormous company has partly emerged.

Partly because of the higher oil price, Shell has seen its profits double in the past year and seems to be intending to increase the value of Shell’s shares through share buybacks. Shell has a good cash reserve and does not need to borrow money to pay dividends. But Shell was also plagued by incomplete reporting when it was announced that it had withdrawn its liability statement for the NAM in June last year. This statement appears to only refer to current contracts and not to the legal obligations such as liability for the earthquake damage.

If a minister informs the House incompletely, a minister is summoned and, in the worst case, dismissed by the House. If the media release incomplete coverage into the world, this will remain without consequences. Comments on the fact that Shell withdrew its 403 liability statement also do not help to form a complete picture. If any lawyer argues that it is quite possible that Shell would have done this in order to minimize its liability, without the annotation that this withdrawal of the statement in question only relates to contracts and not to legal liability, then this lawyer is partly responsible for the occurrence of incorrect reporting.

Incorrect economic reporting can cause a lot of damage to a company. Damage for which the targeted company usually pays. Think of falling share prices, the difficulty of obtaining financing for projects, a waning trust between the company and governments on which a company like Shell often depends. If things go badly for a company, this can have serious consequences for the liquidity position, for employment, resulting in declining profits, in the worst case losses, which also means that the tax authorities and therefore the community receive less.

Apparently, quite a few people are not aware of the major consequences of incomplete reporting or inaccurate comments coming from people who are supposed to be connoisseurs and experts.
The arrogance of the unassailable self-righteousness.

Companies like Shell, with billions of euros invested in assets and liabilities, in installations and concessions, it is necessary for the continuity of the company to think in the long term. Where politicians often do not think or act beyond 1 maximum of two cabinet terms, companies such as Shell are forced to think decades ahead in their strategies and steer accordingly.

The fact that we want to or will make less use in the Low Countries, for example, does not mean that the demand for oil and gas will decline in other (emerging) economies. A growing world population will only increase the demand for energy.

I write energy with emphasis. Because in the parts of the world where the energy transition will take place in some form of speed, a company like Shell also wants to remain active as a player. That is why it is not surprising that De Telegraaf reported that Shell (and reportedly also Total) may be interested in a takeover of the energy company Eneco, which has invested heavily in sustainable energy. Eneco and Shell have also announced that they will jointly invest in new wind farms, which they will then also operate together.

We can all be as “green as a weed plant” and blame the oil and gas industry for everything, but remember that we depend on their activities in everything, absolutely everything. Tomorrow, the day after tomorrow, but also in 10 years’ time, we will not be able to do without oil and gas. In Belgium, there is still massive heating on domestic heating oil, most cars still run on petrol and diesel, without freight transport by road everything comes to a standstill, no ship enters the ports of Rotterdam and Antwerp and no plane takes off. Not to mention the use of petroleum products in the production of plastics.

It is easy to target companies like Shell, but it is completely inappropriate to criminalize a company like Shell, and the latter is happening more and more in the public debate and does not show any factual knowledge.