Jeroen van der Veer (60), the head of Shell, earned £2,9million last year, the average for FTSE-100 firms and almost a quarter of what was paid to his former business rival, Lord Browne at BP.
The relatively modest salary suits the slightly downbeat Dutchman, who is a mile away in style from the garrulous and glitzy Browne.
Van der Veer, a cost-conscious Calvinist who cycles to work at weekends “because petrol is expensive”, is unwilling to discuss pay, saying only that he is focused on what he can do for the company, not on pay. But he is prepared to comment on another controversial topic: the treatment of Browne by the British tabloid press when he left BP this year, having lied in court in an attempt to keep his private life under wraps.
The Shell man says he was surprised by the British tabloid stories that highlighted Browne’s sexuality. “I hope people in our country are more tolerant regarding these aspects,” he says. “This is not a big issue in the Netherlands.”
Does he think the former BP boss will be remembered for the scandal or for the considerable industrial legacy he created at the oil group? “I think the man has made a remarkable career in the oil industry. He did many good things for that company and I hope he will be remembered for that,” says Van der Veer.
The Shell boss, straight-talking but clearly uncomfortable with journalists, has not been forced to deal with the media spotlight on his personal life, but he does know what it is like to be a senior member of a company being put to the media sword over its business practices.
Shell was subjected to ferocious criticism after it misreported its reserves by 25% in filings to the United States regulator, the Securities and Exchange Commission. His predecessor, Sir Phil Watts, lost his job in the ensuing row.
Van der Veer remembers the stormy press conference well. He was also hurt by the coverage of another fiasco, when Shell consultant Bill Campbell blew the whistle on safety breaches in the North Sea.
“What really irritates me is when people broadcast programmes that are deliberately spun in a negative way, as though our employees are villains. Our staff are a hell of a lot greener than the average person.”
Big oil companies are never going to be loved, but Van der Veer says they bring the kind of financial muscle and technical expertise needed in a world of mega-projects such as the £10billion Russian liquefied natural gas project, Sakhalin-2.
His view is that business leaders have to stand up and be counted. “You have got to communicate from your heart. I simply tell things how I think they are,” he says.
Green groups are suspicious of the Shell message. They made this clear when the oil company sponsored a recent conference on climate change. They do not like the fact that it talks about renewable energy yet continues investing increasingly heavily in carbon-intensive schemes such as oil sands in Canada.
Van der Veer is unrepentant. He says the public has been misled that wind and wave can provide more energy than is realistic; the world must accept it is going to be dependent on carbon-based fuels, but must find ways of dealing with greenhouse emissions. Carbon sequestration in old offshore oil fields perfectly fits this model is his argument.
Meanwhile, with “easy oil” running out, it is necessary to concentrate on “unconventional” fossil fuels such as tar sands and gas-to-liquids while still proceeding with potential new sources such as biofuels, thin-film solar technology and hydrogen.
“Ultimately it is up to the government to determine the energy mix. When the politicians have decided what they want, then we work with that,” he says. “The Canadian government supports oil sands so we are developing them.”
What is less clear is the direction the British government is taking at a time when North Sea oil is running out. A huge asset sale by Shell and its partner ExxonMobil has led some to question the commitment of the companies to the UK more generally.
“We are not really pulling back,” says Van der Veer. “But I think you will see a trend whereby more specialised operators come in to optimise the oil that is left towards the end of a field’s life.” As for the overall future of the North Sea, he remains optimistic, saying the sector will remain “pretty big” as long as governments play their part by providing the right fiscal incentives.
But does the new prime minister look like the best guardian of the North Sea? “At least Gordon Brown knows how much he can take out of it,” says Van der Veer with a flicker of a smile.
Understanding national leaders has become increasingly important to an oil boss in a world where “resource nationalism” is on the increase. This week Shell’s Kashagan project in Kazakhstan was stopped amid a blizzard of government criticism.
Shell is getting used to this. It has been forced to hand over operation of its controversial Sakhalin-2 liquefied natural gas project and has been criticised continually by global wildlife fund WWF and Friends of the Earth.
Van der Veer disputes their claims over Shell’s Sakhalin record, pointing to monitoring of the project by the European Bank for Reconstruction and Development. “We got a lot of positive feedback from the bank about the huge progress made on environmental issues.”
As for the Russian government, Van der Veer says it is understandable that the Kremlin got nervous when costs began to soar. But he insists that, even at the higher cost, the gas is coming out of the ground at about $5 a barrel, compared to $25 in the North Sea.
There is one area where comment is not forthcoming: a potential merger with BP. Van der Veer is even more unwilling to discuss this than he is executive pay. “I made it very clear at the time of the original reports that we believe in our current [internal growth] strategy.” And with that, the straight talking is over. — Â