Windfall tax may drive Shell throughout the Atlantic, warns ALEX BRUMMER

Shell chief Wael Sawan is having trouble pleasing all investors all of the time. Despite better than expected first-quarter profits of £6.2billion shareholders are disgruntled.

One group demands bigger payouts, another is critical of Sawan rolling back climate change goals and wants better progress on Paris-set emission targets.

Sawan’s goal is to beef up Shell’s valuation in London. At present, with a market capitalisation of £182billion, it trails pharma innovator AstraZeneca, worth £189billion.

The Shell boss has cautioned that if the oil major’s valuation gap with American cohorts such as Exxon Mobil has not closed by 2025 then the company would consider ‘all options’. 

That might mean shifting its share listing to New York.

Challenge: Shell chief Wael Sawan (pictured) wants to beef up the oil major’s valuation in London

It is frustrating for Shell that it is less appreciated in Europe than big oil in the US. American majors have doubled down on fossil fuels in spite of Joe Biden’s Inflation Reduction Act, which earmarked huge subsidies for firms investing in net zero.

Suggestions by Sawan, backed by former chief executive Ben van Beurden, of a move to New York ought to be politically unacceptable. 

In France, assertive finance minister Bruno Le Maire has stressed how critical it is for Total to maintain its primary listing in Paris.

Command and control of companies more often than not shifts overseas with share quotes. 

It would be helpful if Chancellor Jeremy Hunt, Labour shadow Rachel Reeves and their Dutch counterparts showed the same determination.

Opposition parties in the UK continue to make inflammatory remarks about extending windfall taxes on big oil and closing loopholes. 

Such interventions can only leave a political cloud over energy investment, exaggerating the valuation gap, and make a departure for Shell more likely.

Politicians would do better by focusing on the contribution of already high taxes to the exchequer and the boost dividend payouts provide for pensions.

Shell is reaping the rewards of a focus on liquefied natural gas together with refining and oil trading. 

Paradoxically, disruptions in the Red Sea and Ukrainian attacks on Russian refining facilities benefited it, says group finance chief Sinead Gorman.

Shell investors for the moment will have to be satisfied with a £2.7billion share buyback amid demands from some for improved distributions in the second half of the year amid abundant cash flows. 

Sawan’s push for low costs and better operational performance should also leave more cash on the table for green initiatives.

Revolving door

You lose some and you win some.

At a time when Government and the City are so focused on persuading UK pension funds to back the London markets and start-ups the sight of royal banker Coutts, indirectly 28.7 per cent-owned by taxpayers, shuffling £2billion of assets off into global investments is not a very inspiring story.

A more sensible approach might be to leave the funds in undervalued UK equities and await the uplift which will surely come. 

Everything in economics is cyclical even if one has to wait for the ‘Kondratieff wave,’ a 50-year supercycle, to come into play.

There is no shortage of exciting investment opportunities in the UK in spite of the conventional wisdom that the country is doomed because of Brexit.

Data from consultants EY shows that Britain’s brilliant science and tech sectors attracted 985 foreign investment projects last year, a 6 per cent rise, while Germany and France saw sharp declines. QED.

Health heroes

The latest oncology breakthrough from AstraZeneca could not but catch my attention.

A combination compound, Calquence, has been shown to be effective in treating mantle cell lymphoma, an aggressive form of the disease.

It occurs as a result of a mutation that jeopardises survival for people who are diagnosed late with non-Hodgkins B cell lymphoma. 

As someone successfully treated for an early diagnosis of this cancer in the last year, one can only be grateful to Astra scientists.

Big pharma is a favourite target of critics over high pricing, and easy prey to litigants. But it does good.