Oil majors listed in New York enjoy higher stock valuations and have friendlier investors and increased access to capital, Shell’s former CEO Ben van Beurden said on Tuesday, following media reports that Shell is considering shifting its listing from the London Stock Exchange (LSE) to the NYSE.
Shell is considering shifting its listing from London to New York, the Telegraph reported on Monday, citing the company’s CEO Wael Sawan.
According to the UK daily newspaper, Shell is considering “all options” as it bemoans under-appreciation on the London Stock Exchange.
Sawan, who runs the largest company on the FTSE 100 index in London, said in an interview with Bloomberg Opinion the London exchange was an “undervalued” location. [if !supportLineBreakNewLine] [endif]
“I have a location that clearly seems to be undervalued,” Sawan, who succeeded van Beurden as Shell’s CEO in early 2023, told Bloomberg.
Sawan was trying to explain the valuation gap between lower-valued European oil majors and their U.S. peers listed in New York, such as ExxonMobil and Chevron.
Shell’s former boss van Beurden, who left the group at the end of 2022, has also seen the gap and told the FT Commodities Global Summit in Lausanne that “It’s a major issue,” Bloomberg reports.
Moreover, investors are more positive toward oil companies in America, van Beurden said.
“All these factors conspire against the people listed in Europe,” the former CEO of Shell said, as carried by Bloomberg.
Van Beurden also acknowledged that there have been discussions about moving Shell’s listing to New York at the end of his tenure. In 2021, Shell was considering a move to the NYSE, the former CEO said.
This was before Shell dropped its dual share structure, ditched ‘Royal Dutch’ from its name, and moved its tax residence to the UK in late 2021.
Shell’s time on the LSE could further worsen in terms of investor apathy after the supermajor eased some of its emission reduction targets last month.
By Tsvetana Paraskova for Oilprice.com
