A Shell of their former selves

Yesterday I received an email from Shell containing more diversity mumbo-jumbo than I thought possible:

We have just celebrated International Women’s Day, when women are recognized for their achievements regardless of age, race or beliefs.

This sentence reads as though it was written by a committee. Why not just stop after “achievements”? What have age, race, and beliefs got to do with women’s day?

The value that women have in the workforce is truly immeasurable.

Is it? Could you not apply the proportion of women in the workforce to the overall value added by the company (“profits”)? Cross-reference this with the total women’s wage bill and you’d have an order of magnitude at least. You could refine things further by assuming whichever women (and men) were involved in writing this press release represented negative value to the tune of their salaries.

At Shell, the unlimited potential in each woman is considered one of our greatest resources.

Considered by whom? I bet investors are a lot more interested in your production rate, reserves, and cash pile. And “unlimited potential in each woman”? Does each man have unlimited potential? Or only those who went to Delft?

They then provide links to various webpages, which contain such gems as:

Shell promotes a culture that is gender balanced. This extends to the way we hire and develop our female talent. We run leadership workshops designed specifically for women.

Nothing says gender equality quite like leadership workshops designed specifically for women.

In the last five years, Shell has increased female representation on our Board of Directors from 8% to 33%. We have also seen the representation of women in senior leadership positions rise from 16% in 2012 to 22% in 2017.

I for one will be extremely interested to see how this pans out. It’s not that I don’t think women can be leaders, it’s that when a company adopts progressive initiatives based on politically-driven social science papers originating in the lunatic fringe of western academia, they’ve lost all perspective. Pepsi’s CEO is Indra Nooyi, an Indian woman, and they pointedly don’t make a big song and dance about it because she is undoubtedly there on merit alone. I worked in and around Shell organisations between 2004 and 2009, and there were plenty of capable women doing very well there, some of whom were in senior positions. There didn’t seem to be any impediment to women back then, they were just fewer in number for the most obvious and natural of reasons. If Shell now believes it’s necessary to artificially inflate the number of women in senior positions in the way they’ve described above, it’s a sign they’re less interested in oil and gas production than social engineering.

For us, this is just the beginning.

The beginning of the end, I suspect. Shell will survive for a long time on its legacy production, reserves, and vast cash pile, but I’d hazard a guess that very little it has done or will do since the oil price crash in 2015 will contribute to its long term future. Applying the “clogs to clogs in three generations” analogy, Shell’s latest generation of whizz-kid managers are eyeing up their next Ferrari while the factory falls into disrepair.

I’ve an inkling I might yet be young enough to write the obituary of Big Oil. As many predicted, their demise won’t be due to a lack of oil in the ground.

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33 thoughts on “A Shell of their former selves

  1. I recognise alot of this as true. Having worked in Shell for 23 years until I resigned in 2015. I saw many senior promotions that on merit alone looked ‘odd’. The leftyism of large corporations is never a good sign. But Shell’s real challenges are that energy demand overall is falling (see today’s Zerohedge), renewables and electric vehicles are moving from being a theoretical threat to an actual one and access to reserves is getting harder and harder for non-state players.
    Shell’s share price has flatlined for well over a decade while the market has done what? Not a great relative investment. If the dividend yield looked at risk then it’d be a Sell.

  2. Why not just stop after “achievements”?

    Why not stop before? Why pretend this celebration is linked to achievement? Which of course it can’t be, because the achievements of women are “immeasurable”.

    If I was a shareholder I would want Shell to employ the best people possible and then not to waste my fucking time and money telling me about it.

  3. and access to reserves is getting harder and harder for non-state players

    That, in spades. Any new discovery from hereon out will be controlled by the government, and the IOCs will be lucky just to be able to book the reserves and make a little cash. Soon the practice of the IOCs being paid a flat fee per barrel produced will become standard, and as legacy production drops away, the overhead burden will kill them.

    If the dividend yield looked at risk then it’d be a Sell.

    Yeah, they day these outfits cut the dividend they’ll be toast.

  4. And the USP of oil majors is that ‘only they can manage giant projects’ becasue much of the core engineering expertise is bought in from oil-services groups. But Shell have had too many Kashagan / Abadi / Tacoma type disasters to be a rock solid partner / leader for major projects. One day the likes of Halliburton / Schlumberger might simply offer governments to do the whole project and cut the oil major slice of value out of the equation altogether. If financial investors can be found (incl governments) then what is Shell bringing to the party?
    Even the very ‘successful’ projects like Gas to Liquids in Qatar, which are now cash-cows came in way over budget and ramped up volumes much slower than forecast. The rate of return is NOT what was promised. The shares have flatlined for a reason. And so in the medium to long term the dividend is at risk.

  5. “Could you not apply the proportion of women in the workforce to the overall value added by the company (“profits”)?”

    Now that’s patriarchical thinking for you. Wanting to use data, facts and analysis to prove a point. It ignores female centred viewpoints which emphasise different factors and can legitimately lead to different conclusions.

    Incidentally my workplace has now got explicit targets for female representation at the levels immediately above mine. Given the turnover rate at that level (low), new post creation rate (as near zero as to be effectively zero), target date (next couple of years) and current/future proportions I worked out the chances of me getting promoted are near zero. So…. do I continue to strive or kick back or leave? I am sure a lot of guys at Shell are thinking the same way.

    Disclaimer – I hold shares in shell as do my children’s portfolios. Bought when the oil price was really really low. It’s also a long term bet that “green”explodes so I am rooting for Trump.

  6. In slight mitigation to your original post, though, I would say that Jessica Uhl is a very smart cookie (despite her Napa Valley Californian origins?) and is also a very pleasant person and an all-round good egg. (Am I allowed to say she is very pretty too?). I can vouch for all of that personally as I worked for her and sat in the room opposite for 2 years. The previous Finance Leadership Team were flabbergasted that she got the CFO job when Simon Henry left. Says alot about the old FLT. (I wonder how much of the feminist stuff is her doing though).

  7. In slight mitigation to your original post, though, I would say that Jessica Uhl is a very smart cookie

    I don’t doubt that.

  8. And the USP of oil majors is that ‘only they can manage giant projects’ becasue much of the core engineering expertise is bought in from oil-services groups.

    I could write a book on the supposed USP of oil majors.

  9. A while back I was mixing with a number of Shell types (let’s just say that I used to cycle to work past their HQ), and speaking fluent Dutch at the time, some of the Dutch guys from there would tell me all sorts of things. The things that stuck out for me were the following:

    1. Massive British style H&S culture. On steroids. And smoking crack. The Dutch have a typical continental shrug with respect to that kind of thing, but one of the guys (engineer) reported getting literally screamed at by a (female) manager in the staircase for – wait for it – not holding the handrail, in contravention of policy.

    2. Massive PC culture. Woe betide anyone who said anything bad about the people or places in Shitistan or wherever your project was being done. Or women. Or any minority. Plus they employed all manner of people in “green” roles, mostly on AGW crap.

    3. This massive PC culture didn’t extend to even basic courtesy towards Holland or the Dutch. It was entirely acceptable to bad-mouth both in even the filthiest of terms. And whenever anyone dared bring this up with mgt, the excuses were entirely predictable. That since it was their country they were “dominant” inside and outside the organisation and so should drink a nice steaming hot lekker bakkie of Shut de Fock Up.

    This, to me, did not seem to be a healthy working environment, or a healthy company.

  10. At Shell, the unlimited potential in each woman is considered one of our greatest resources

    If it is ‘immeasurable’, how do you know it is one of your greatest resources? It is thinking like this, when it seeps into the actual real world where words and things have meaning, that gets people killed.

  11. one of the guys (engineer) reported getting literally screamed at by a (female) manager in the staircase for – wait for it – not holding the handrail, in contravention of policy.

    (A) laugh, (b) shove the silly twat down the stairs shouting “hold onto the rail!”, (c) both.

  12. The Dutch have a typical continental shrug with respect to that kind of thing, but one of the guys (engineer) reported getting literally screamed at by a (female) manager in the staircase for – wait for it – not holding the handrail, in contravention of policy.

    To be honest, I’ve learned that’s not a bad thing. It means the arguments and questioning happens over the silly things like holding handrails, not over serious issues like “should we check with engineering before cutting into this pipe?” Having experienced both worlds, I’d say Shell’s has some merit.

    The PC stuff is ridiculous, though.

  13. one of the guys (engineer) reported being literally screamed at by a (female) manager in the staircase for – wait for it – not holding the handrail, in contravention of policy.

    Reverse the sex in those roles and the man would have been sacked.

  14. “energy demand overall is falling”

    Except it isn’t, it’s growing and will continue to do so as far out as we can look. There’s -penty of room for renewables but don’t think that they will take market share away from hydrocarbon, both energy sources will grow and hydrocarbon will still be king.

  15. @Tim

    “negative value to the tune of their salaries”

    Depending on company size, this could be an orders of magnitude underestimation of the absolute value.

  16. Depending on company size, this could be an orders of magnitude underestimation of the absolute value.

    Indeed.

  17. Shell’s traders missed their q1 target by a billion dollars.

    Our host’s musings on diversity growth vs revenue growth in blogs passim are holding true.

  18. Shell’s traders missed their q1 target by a billion dollars.

    It matters not if they hit their diversity targets!

  19. Bought at 15, good dividend, will get out if it changes and I couldn’t give a crap about their stance on anything other than making me money.

  20. “I’ve an inkling I might yet be young enough to write the obituary of Big Oil. As many predicted, their demise won’t be due to a lack of oil in the ground.”

    On a similar note… In the mid-1970s I recall being told that by ’85 all the oil in the North Sea would have been discovered and being produced via fully automated platforms controlled by six guys in a control room onshore – the rest of us would be out of work. Our kids are now in their 40s and doing the same jobs we did.

    As far as Shell’s diversity programme is concerned (and maybe I led a sheltered life), having worked for them on and off as a subcontractor for more than 25 years (my final day at work was to fly to The Hague and deliver a presentation to a room full of staffers from around the globe), during all that time I never came across a single female Shell employee.

  21. I worked for BP from 2001 – 2008 on their trading floor and I must say that even in such a temple of misogyny as trading they were pretty politically correct. Gender mix wasn’t really much of a thing back then in the rest of the world, but BP did like to give the ladies the opportunities that they might have been excluded from in other trading environments.

    When I went elsewhere, especially to the former Iron Curtain oil companies (SOCAR aka State Oil Company of the Republic of Azerbaijan, Litasco, Kazakhmys et al) the differences in culture were noticeable. It was like stepping back in time. Sure, there were plenty of ladies and they were all very attractive (suspiciously so in fact), but every single one of them was either a secretary or some form of administrator.

  22. The women are an untapped resource are they, does that mean we should be drilling or fracking them? Will their flow be dependent upon the time of the month?

  23. @Thud

    Commodities outlook including oil and gas bullish, the cycle could take them up on its own irrespective of management performance. Good luck with it anyhow.

  24. @Thud. Dec ‘15 buyer were you? That’s when I bought in as well. Missed the absolute low as we need to get trade pre-approval for anything. When you buy that cheap you can afford quite a bit of sjw bullshit if the firm is making money. It’s not Enron nor Tesla but a core part of the global economy.

  25. As far as Shell’s diversity programme is concerned (and maybe I led a sheltered life), having worked for them on and off as a subcontractor for more than 25 years (my final day at work was to fly to The Hague and deliver a presentation to a room full of staffers from around the globe), during all that time I never came across a single female Shell employee.

    Really? Blimey, there were loads as far back as 2006.

  26. Sure, there were plenty of ladies and they were all very attractive (suspiciously so in fact), but every single one of them was either a secretary or some form of administrator.

    I found plenty of women held technical positions in Russian companies. A company which specialised in airport construction was full of them.

  27. Really? Blimey, there were loads as far back as 2006…

    I retired in 2001.

  28. I retired in 2001.

    That’s interesting; it’s obviously more recent than I thought, which reinforces one or two theories I have about the oil business. Thanks!

  29. renewables and electric vehicles are moving from being a theoretical threat to an actual one

    Oh, ffs. No, they aren’t. Not even remotely close. Take away the government subsidies, incentives and other outright bribes with public money to prop them up, and they immediately vanish.

    There are tiny corner cases (long-life rechargeable batteries, LED lights, and high-efficiency solar panels allow you to drop decent lighting just about anywhere without needing an electrical grid) but “renewables” are a scam and always have been.

  30. Tim, I wish you would consider adding pictures to your blogs. This would make them shareable on social media. That’s assuming you want a wider audience. Or perhaps you don’t like poseurs like me sharing your posts with the intention of making ourselves seem better-informed than the rest.

  31. Tim, I wish you would consider adding pictures to your blogs.

    I tried that once: it took me as much time to find and upload a suitable picture as it did to write the post. Thinking of a title is hard enough!

    Or perhaps you don’t like poseurs like me sharing your posts with the intention of making ourselves seem better-informed than the rest.

    Oh, I have no problem with this!

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