Shell CEO isn’t bluffing — if the London Stock Exchange doesn't improve, it'll lose its most valuable company

Is Wael Sawan bluffing when he says he is prepared to move Shell’s main listing from London to New York if its shares stay as undervalued as they are currently? 

I would not bet on it.

Although his Bloomberg interview is the first time the oil giant’s CEO has made the threat explicitly in public, he has been saying much the same thing privately for some time.

The Beirut-born boss enjoys life in London, where Shell is still headquartered, but in many other respects his loyalty to this country is pretty limited. He is certainly no paid up member of the British corporate establishment.

The 49-year-old has dual Lebanese and Canadian nationality and his career has taken him all over the world in a variety of roles often far away from head office. He feels that the antipathy for the oil and gas sector expressed through the Extinction Rebellion movement and other high profile campaigns is an indulgent “north west Europe” phenomenon not shared by the rest of the world, particularly in developing countries.

He is also deeply frustrated by what he sees as London investors’ under-appreciation of the financial performance of the company, and the British government’s over-taxation of its profits, a state of play unlikely to be eased by Keir Starmer’s arrival in Downing Street and Ed Miliband’s at the Department of Climate Change.

In his Bloomberg interview he has effectively put London on two years’ notice: shape up or we will ship out. It is hard to overstate just what a blow to London’s prestige the loss of Shell’s listing would represent.

It is a founder and “ever present” member of the FTSE 100 and is often — even with the undervaluation that irks Mr Sawan so much — Britain’s most valuable quoted company.

If that threat does not shake the Stock Exchange out of its complacency, it is difficult to know what will.