LONDON — Shell, the oil giant, announced on Thursday that it is still contemplating the possibility of relocating its stock market listing from London to New York, although it emphasized that this is not currently an active discussion.
The comments came after the company revealed a 16% decrease in its full-year earnings, which totaled $23.7 billion, down from $28.3 billion the previous year. CEO Wael Sawan faced inquiries regarding the ongoing considerations for Shell’s potential move, aimed at bridging the valuation gap with its U.S. counterparts, specifically ExxonMobil.
During an interview with CNBC, Sawan stated that the company continuously evaluates the status of its headquarters and listings, but reiterated that there are no immediate conversations taking place regarding this issue at Shell. He highlighted that the company’s primary focus is to fully unleash its potential.
Previously, Sawan indicated that Shell’s market listing was under assessment due to a persistent valuation discrepancy between Shell and its American peers, resulting in increased costs when seeking capital through the markets.
This is not the first time Shell’s listing has been brought to light. In 2022, the company transitioned away from its dual share structure with a departure from its Amsterdam listing, a decision influenced by various factors, including tax implications.
The potential return of former U.S. President Donald Trump could also factor into Shell’s future listing deliberations, especially considering his support for fossil fuels and the decision to withdraw the U.S. from the 2015 Paris Climate Accord.
Shell, along with other energy firms, has benefited from rising profits in recent years due to soaring oil prices, particularly following Russia’s extensive invasion of Ukraine nearly three years ago. However, declining oil prices in 2024 contributed to the recent drop in profits.
Despite the downturn in profits, Shell has increased its dividend payment by 4%, a move aimed at maintaining investor interest in its stock. Following this latest announcement, the company’s share price experienced a modest rise of 0.5%.
Even with Trump’s pro-oil stance, the global shift towards net zero emissions continues to progress, albeit at a slower pace than many advocates would prefer. Consequently, companies like Shell are looking to broaden their business ventures.
“There’s a notable tension within Shell as it navigates the dual pressures of the energy transition and shareholder expectations,” remarked Derren Nathan, head of equity research at Hargreaves Lansdown.
Nathan mentioned that the upcoming capital markets day in March “should shed more light on the strategic direction of the company and is expected to draw more attention than ever.”
