AMSTERDAM (Reuters) – Royal Dutch Shell on Thursday named Jorma Ollila, chairman and chief executive of cellphone maker Nokia, to be its non-executive chairman from June 1, 2006.
Ollila will replace Aad Jacobs at the oil group, which gave up its dual Anglo-Dutch ownership structure on July 20 to revive an image scarred by an oil reserves overbooking scandal last year that was partly blamed on complicated management.
The 54-year-old Finn has the necessary experience to supervise the world”s third-largest oil company by market value as it aims for a more efficient, transparent and accountable management system in an industry facing a tough future.
Ollila is seen as a corporate hero in his homeland, having overseen Nokia”s transformation from a diversified Finnish industrial group into the world”s biggest mobile phone maker.
He became chief executive at the Finnish group after a boardroom shake-up and as head of the company from 1992 switched its focus to telecoms equipment and sold off other operations.
"We were looking worldwide for a chairman with international standing, a global outlook, and proven success in managing a complex organization," Lord Kerr of Kinlochard, Shell deputy chairman and senior independent director, said in a statement. "In Jorma Ollila we found all these qualities, and more."
The Financial Times reported last month that Jacobs, who has been chairman of the Royal Dutch arm of the group since 2002 and is retiring, had hinted at a successor who was neither British nor Dutch to avoid upsetting the oil giant”s balance of power.
Jacobs has weathered the reserves scandal, management change and surrender of a century-old dual structure.
Ollila will have his work cut out for him.
Rampant inflation in the oil service sector and the difficulty of having to search for oil in ever more remote and harsh locations have led analysts to warn of a structural erosion in oil firms” profits.
Shell”s earnings growth lags that of its rivals and the group warned last month that it was forced to delay starting production at a key Nigerian oil field.
"Jorma Ollila will be an excellent Chairman. He comes to us with a wealth of valuable experience and an excellent record of success," Shell CEO Jeroen van der Veer said.
By 0839 BST Shell”s A shares in London were down 0.44 percent, performing slightly better than the benchmark DJ Stoxx Oil & Gas index, which was down 0.78 percent.