"We're focused on making sure that we actually unlock the significant undervaluation through multiple levers which are directly under our control," said Sawan, who took office in January with a vow to improve Shell's performance. Shell reported on Thursday a $10 billion profit in the first three months of the year, driven by strong earnings from fuel trading and higher liquefied natural gas (LNG) sales. "It was only in 2019 when Shell and Exxon were neck and neck from a valuation perspective ... What we have seen over the past few years is that gulf between the U.S. and Europeans grow," Sawan said. "We are acting with urgency and good faith to make sure that we continue to high-grade the performance of the company." he said. Shell relocated its headquarters to London from the Hague last year after it abolished its dual-listing in the Netherlands.
In the run-up to the decision, Shell's board also weighed moving to other locations including New York, Singapore and Switzerland, although those alternatives were discounted at an early stage, company sources told Reuters.
The share valuation gap could be explained by the European
companies making larger investments than their U.S. peers in
renewables and low-carbon energy, which are today significantly
less profitable than oil and gas, according to Jefferies analyst
Giacomo Romeo.
A larger community of climate-focused investors in Europe
could further explain the gap with U.S. rivals, he added.
"Since the COVID-19 pandemic, the valuation delta between
the two groups has consistently been larger than in the last 20
years," Romeo said in a note.
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(Reporting by Ron Bousso
Editing by Mark Potter)
