Royal Dutch wins fight to take Shell Canada private

News Story

Quote:

---

TAVIA GRANT

Globe and Mail Update

After a five-month battle, Royal Dutch Shell PLC on Monday declared victory in its plan to buy the rest of Shell Canada and take the company private.

The offer was extended to last Friday, and an additional 75.7 million Shell Canada shares were tendered, at $45 a share.

Royal Dutch, one of the world's largest energy firms, now owns about 98.8 per cent of the Canadian company. The offer, which had been seen by some shareholders as too low, has now expired.

Shell Canada's current management keeps responsibility for the company's operations and projects, Royal Dutch said in a release.

The U.K. company made a $40-a-share bid for Shell Canada in October. That offer was boosted to $45 in January.

Royal Dutch wanted the rest of Shell Canada so that the Anglo-Dutch company could increase its oil sands holdings.

---

Saw this on the news wire this morning, there are a few people on these boards that do work at Shell, who probably already know this from their water cooler meetings this morning.

My question for them or anyone for that matter, is there a feeling of layoffs coming from the "redundancy department of redundancy" to reduce any overlap of resources? If these layoffs do occur, would this finally help alleviate the labour shortage in Calgary?

PS: I know that Royal Dutch maintains in their releases that Shell Canada retains control of operations, but the cynic in me thinks that is more to appease the lawmakers/public.

There'll be layoffs. No doubt.

Cost centre functions like IT and Accounting would be the easiest targets for reduction or consolidation. So will the refineries and operations. You'll see some jobs absorbed by US Shell.

But don't expect it'll happen quickly. Complete phase out probably won't be done for at least 2 years.

Would it help labour shortage? Probably not.

Not only layoffs.... many months ago, I posted that this may happen, and the word on the street at the time was that IF it happened (which it just did), that they may shut down the Clagary offices all together.... :dunno:

Why would they shut down the Calgary offices? Do you really think it makes more sense to run Canadian operations from Houston or The Hague? I'd say that considering they have existing expertise and infrastructure here, they will keep an office here. Certainly there will be layoffs, but I wouldn't count on closing their entire head office.

Quote:

---

Originally posted by Fivewayradio
Why would they shut down the Calgary offices? Do you really think it makes more sense to run Canadian operations from Houston or The Hague? I'd say that considering they have existing expertise and infrastructure here, they will keep an office here. Certainly there will be layoffs, but I wouldn't count on closing their entire head office.

---

Well, for one, Calgarian commercial space is among the highest in North America, and a lot of the departments are redundant...

.

Quote:

---

Originally posted by Fivewayradio
Why would they shut down the Calgary offices? Do you really think it makes more sense to run Canadian operations from Houston or The Hague? I'd say that considering they have existing expertise and infrastructure here, they will keep an office here. Certainly there will be layoffs, but I wouldn't count on closing their entire head office.

---

Acutally, Oil Products and Exploration/Production size is huge opportunity for being ran from Houston.

It' doesn't mean that all the people will be layoff but a significant amount (management/tech) will be good candidates.

Corporate is also a very good candidate. Getting rid of Shell Centre on 4th and 4th? If they do it, it'll be in a decade or so. Definitely not something can be done quickly.

You need to back that up because it doesn't make any sense to me. Obviously there will be redundancy, but I can't see why it's better to run canadian operations from houston.

Cost Centres like Accounting would take a hit for sure. As for their IT, they're all contracted out anyways.

I read that Royal Dutch was looking to increase interests in the Oil Sands projects. If that's true why would they move operation to Houston? A hub in Calgary would be vital to maintain their Oil Sands commitments.

Shell has leases on huge tracts of land west and south of Ft. Mac. towards Wabasca. It is believed that there is more bitumen among these tracts that there is around Ft. Mac. It is just deeper and tougher to separate from the entrained material. They talking about investing huge capital in developing these areas. Also, Shell has large research centers in Alberta. These factors, plus their large oil-sand holdings (including their partnership with Albian) will keep Shell Canada in Calgary.

Just what I heard :dunno:

And IF it happens, it will be fast... 1 to 2 years.

Quote:

---

Originally posted by Fivewayradio
You need to back that up because it doesn't make any sense to me. Obviously there will be redundancy, but I can't see why it's better to run canadian operations from houston.

---

Because there is a bigger pool of people supporting more refineries in US. If you were to streamline the process and people, you would follow the one with the bigger operation.

IT is half way out already since most is supported by Bangladesh and Kular Lumpur.

Financial will be next since it's now 1 big company with no independent investors, PR isn't needed. Once they find a way to dissolves the pension responsibility, capital management will also not needed. The only people will be kept will be tax people (if not outsourced already). HR can be reduced since it'll be following a different protocol.

The safest job is related to oil sand. Where the situation is a bit different since Shell operates with partners. So unless RDS buy out the partners, this arm will operate with some autonomy.

Quote:

---

Originally posted by Toma
Just what I heard :dunno:

And IF it happens, it will be fast... 1 to 2 years.

---

Transition will take 1-2 years would be my bet. But Shell Centre will not be abandoned. ERP conversion will take 3-5 years at a minimum. Converting retail operation (currently based here) isn't a small task either.

Erm...I work at Shell. We are leaving the building by Fall, to the new one being built just a block away.

There is something people have to understand though. Shell in Canada is made up of two entities - Shell Canada and Shell Chemicals Americas Ltd. The former is oil and gas, the latter is chemicals - both are in the same building right now but are seperate companies. I work for SCAI, so I can't really speak for Shell Canada, but it is pretty obvious that there will be layoffs.

The thing is, a complete relocation to Houston is not entirely necessary. We'll see what happens, but I'm pretty sure they will keep a presence in Calgary.