Jeroen van der Veer, Royal Dutch Shell's first chief executive, is used to skating on thin ice. The 57-year-old Dutchman has twice completed a 135-mile race along frozen canals through 11 cities in the Netherlands.
But even that cannot be as demanding as the task at hand -- righting the third largest oil company following its reserves accounting crisis last year. The debacle spurred a boardroom purge, class-action lawsuits and a complete reorganisation of the company's century-old governance structure.
Informal and unpretentious, Mr Van der Veer's manner is miles away from the caricature of a swaggering oilman. He speaks English with a Dutch accent; his tone is measured and moderate at all times. In other words, he is the consummate Shell Man -- something that disappointed those who felt that the company needed a radical break with its conservative and consensus-driven culture. But Mr Van der Veer is not about to apologise for his style.
"Basically, when I think about my style I do two things. First is that you try to keep your feet on the ground [and focus on] where the company is at the moment. [You] try to form a good picture about the good and the bad, founded in reality. Don't be too optimistic or too pessimistic, have a kind of feeling for what's going on, what's the mood of the people.
"The second thing I try to do is think where the company should be so many years from now. After you come to certain insights or conclusions, you try to share that mental picture of where the company should be longer-term."
The oil and gas industry is arguably more competitive than ever before, a fact Mr Van der Veer readily acknowledges. Behind the record earnings at the international oil companies there is deep uncertainty about the future.
The countries that own easily accessible resources no longer need the oil majors to extract it or sell it to foreign markets. At the same time, newly aggressive state companies from countries such as China and India are muscling in on their territory, striking deals directly with resource-rich states. Backed by governments, they have access to cheap capital on a scale comparable with the oil majors, and yet can offer trade and aid deals that public companies cannot match.
The result is that oil companies are having an increasingly hard time replacing reserves -- a key measure of their future value. And none more so than Shell. It was already struggling with its reserves figures before it had to cut them five times last year.
"You can only [beat] those kinds of companies by being ahead with technology and innovation, so you can work cheaper or you can access oil with your technology [that] they can't access. Or you are better at project management," he says.
To meet that challenge, Mr Van der Veer has put a series of changes into effect. He is setting up two new "academies" -- one to improve the management of large-scale, multi-billion dollar projects and the second to sharpen the commercial proposals the company makes to host governments.
Shell suffered a severe setback recently when it revealed that its flagship Russian gas project, Sakhalin-2, would be at least eight months late and $10bn over budget. Mr Van der Veer hopes the project academy will put an end to such problems. "We have to get this project management to a very high art, and that's exactly what we intend to do."
Similarly, he hopes his commercial academy will prevent a recurrence of another recent setback in Oman, where the government transferred operation of one of its prize oil fields to a rival consortium with more ambitious development plans. "The commercial academy is how to make proposals which really fit the agenda of the country," he says. "So it is back to being good entrepreneurs in a very classic way."
Welcome though they are, critics say that Mr Van der Veer's proposals will do little to solve the deep-seated problems at the company which has recently been listed as a newly unified entity on the London Stock Exchange. Many analysts have said that Shell must buy some additional reserves through acquisitions -- something it has steadfastly refused to do.
"We are not afraid or shy to do large acquisitions, but they should create shareholder value at different energy prices as well," he says.
Shell has said it might acquire small companies in the range of $1.0bn-$9.0bn and recently engaged in an asset swap with Russia's state-controlled gas monopoly, Gazprom. Mr Van der Veer says the company will continue to look for other asset swaps, which are less dependent on the oil price remaining high.
In fact, he thinks that, over the long-term, oil prices are unlikely to remain at current high levels. Shell continues to use $25 a barrel as a yardstick by which to measure profitability of future projects. "If you do it that way, a scenario is not a gamble on the future."
Mr Van der Veer remains convinced that the future lies in executing giant projects, and the problems at Sakhalin-2 have done nothing to deter him. "That is where we can show our value, and if we do a good job of course, can create income."
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