Shell's CEO van Beurden prepares to step down next year

Sept. 2, 2022
Shell has shortlisted four candidates to succeed CEO Ben van Beurden, who is preparing to step down next year, two company sources told Reuters.

LONDON — Shell has shortlisted four candidates to succeed Shell CEO Ben van Beurden, who is preparing to step down next year after nearly a decade at the helm of the giant energy firm, two company sources told Reuters.

During his tenure, van Beurden oversaw Shell's biggest acquisition in decades and steered the company through two major downturns and a pivotal move to slash greenhouse-gas emissions, which is a task Reuters said will only grow in importance for his successor.

Shell's board succession committee, headed by Chairman Andrew Mackenzie, has met several times in recent months to draw up plans for van Beurden's departure and interview potential successors to the 64-year-old Dutchman, the sources said.

The successor shortlist has been narrowed down to Wael Sawan, Shell's head of integrated gas and renewables and Huibert Vigeveno, who heads the company's refining operations of downstream.

Recently appointed CFO Sinead Gorman and Zoe Yujnovich, head of upstream, are also seen as possible successors, the sources said.

Shell declined to comment. Despite battling with two major oil price slumps and an unprecedented 66% cut to Shell's dividend in April 2020, van Beurden's track record looks acceptable. Since Jan. 1 2014, when he took over, Shell shares have returned 67%, not as good as TotalEnergies; 85%, but appreciably better than domestic rival bp and Exxon Mobil, Reuters said. He also pulled off the $70 billion purchase of BG Group in 2016, which made it a leading force in LNG.

The problem for Mackenzie, the Shell chair tasked with identifying van Beurden's successor, is that the British energy giant is pulled in opposite directions. A Dutch court has ordered it to slash its 1.6 billion tonnes of annual emissions by 2030, which requires offloading its most polluting operations. But an ongoing energy crisis means oil prices could hover about $100 per barrel for a while, which legitimizes hanging around in fossil fuels.

The four internal candidates for the top job all have their merits:

  • Dutchman Huibert Vigeveno heads Shell's refining operations, which have been making money hand over fist amid record refining margins.
  • Zoe Yujnovich and Sinead Gorman are both well thought of. That said, Shell doesn't tend to have two Dutch CEOs in a row, and the female candidates are less well known to investors.
  • By contrast, Canadian Wael Sawan looks ideal. He used to head oil production. But he now runs Shell's Integrated Gas and Renewables arm, which includes LNG and green activities like solar and wind. LNG, in which Shell has a leading 20% market share, could be the key driver of its medium-term valuation given energy security concerns. Green energy, currently a trifling contributor to revenue, could be the key to supporting Shell's long-term revenue growth.

While balancing cash-generating fossil fuels and emissions won't get any easier, Sawan looks the best placed to try, Reuters reported.