Where Shell locates it’s corporate HQ is pragmatic and has nothing to do with Brexit

According to a piece in The Times today Royal Dutch Shell is considering moving it’s corporate HQ from The Hague to London and predictably the Brexiteers in The Times and also elsewhere are already beginning to celebrate this as a triumph. They shouldn’t. This decision, if taken, says virtually nothing about the management of the corporation and a lot about the respective tax regimes of Britain and The Netherlands. The tax benefits of the U.K. as they are at present, are made clear in the article. As is the perceived need to simplify the Capital Structure. These issues have nothing whatsoever to do with Brexit. It’s financially driven and pragmatic.

Royal Dutch Shell’s (RDS) has over the past few decades become a much more centralised corporation than it was in the four decades during which I worked for it. The direction of the business comes primarily from London and The Hague – with Houston being a sort of third central office for some activities. RDS has always been Anglo Dutch and this is unlikely to change.

The Hague as well as being the location of the HQ is also the location of the executives at the top of various key business streams such as Oil and Gas exploration and production – the “Upstream”. All the technical, engineering and associated activities of the Upstream take place in The Netherlands. The same applies to Manufacturing (the Refining sector). In theory all these Holland based activities could relocate to London and there would be some cost reduction benefits – but it’s very unlikely to happen.

Shell Centre in Waterloo is the location of the central offices of Shell’s other businesses including Marketing, Supply Trading, Legal, Finance etc. This duality of location is long established and it would be complex to unravel it. Certainly any move of the registered office HQ from The Hague to London would have few implications for the daily operation of the business. Very few employees would be in any way affected. The only visible change of a move of HQ would be that RDS AGMs would in future be in London rather than The Hague – which would please The City.