Shell CEO suggests oil and gas company could quit London Stock Exchange

As Wael Sawan focuses on a two-and-a-half-year turnaround plan, he refuses to rule out leaving the UK

Wael Sawan speaks at an event in Abu Dhabi in October last year. AFP
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Shell chief executive Wael Sawan refused to rule out the possibility of the oil and gas company leaving the London Stock Exchange amid concerns it is underappreciated by investors.

Mr Sawan said he could move the largest FTSE 100 company to New York and that he is considering “all options”.

Shell is facing increasing pressure to close a valuation gap with New York-listed rivals such as Exxon Mobil and Chevron.

“If we work through the sprint, and we are doing what we are doing, and we still don't see that the gap is closing, we have to look at all options,” Bloomberg cited Mr Sawan as saying.

By mid-2025, if the valuation gap remains, then Mr Sawan made clear nothing is taboo, including switching the listing to New York.

Shares in Shell had a bad start to the year, losing 8.2 per cent in the first three weeks of 2024. But since then they gained 19.5 per cent in value.

Having hit a 52-week high of 2,825.5p on Monday, the shares continued to climb on Tuesday and by mid-morning were a further 0.7 per cent higher.

Over the past 12 months, Shell shares have gained 16.1 per cent and over five years they have added 13.8 per cent in value.

A representative for Shell said Mr Sawan had made comments along similar lines on several public occasions, adding that the company will “explore other options” if there was a valuation gap beyond 2025.

Mr Sawan said the current undervaluation presented a “fantastic investment opportunity”.

“I will keep buying back those shares, and buying back those shares at a discount,” he added.

Moving the company's primary listing away from the UK would require at least 75 per cent approval in a shareholder vote.

Leaving the London Stock Exchange would deal a huge blow to the UK's struggling stock market.

Investors could take a hit as many rely on dividend income from FTSE 100 companies, including tracker funds and pension schemes that support millions of retirees.

In the UK, the oil company is looking at a future in which institutional investors are increasingly focused on environmental, social and governance (ESG) measures, and growing criticism from climate activists and shareholders for not raising its share of renewable energy.

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A Labour government could also present problems for the company with concerns about the party's anti-business policies and leader Keir Starmer suggesting he would introduce a “proper” windfall tax that is tougher than the existing energy profits levy.

Some UK businesses are also uneasy with Mr Starmer's plans to enact a package of “day one” employee rights.

If Shell leaves the London Stock Exchange, it would be following a trend that mining company Glencore began last year when it listed its coal business in New York, with secondary listings in Toronto and Johannesburg.

In recent months, chip company Arm, building materials supplier CRH, Paddy Power owner Flutter and travel operator Tui have all abandoned London for overseas listings.

There are fears that rival energy company BP, the fifth-largest company on the index, could also follow suit.

Updated: April 10, 2024, 6:47 AM