Shell hopes to calm troubled waters

OIL giant Shell is hoping that a bumper set of profits will defuse a rebellion against chairman Sir Philip Watts.

Fund managers are questioning his future after Shell's shock downgrade of 20% of its proven oil and gas reserves on Friday which wiped 30p off the share price.

Asked whether any investors had questioned Watts' position, Shell said: 'We are not going to comment on that.'

The shares fell a further 3 1/2p to 367 3/4p as brokers lowered their ratings and credit agency Standard & Poor's put Shell on its list for a possible downgrade.

All this has obscured the fact that Shell had one of its best ever years in 2003. With oil and gas prices at sustained high levels, net income could top the 2000 record of $12.7bn, and a final dividend rise from last year's 9.3p is on the cards.

Watts will front the results presentations. Shell will seek to delay any announcements on the board and succession at least until the May annual general meeting.

Watts is due to retire in 18 months. If the row worsens, he might go early. But Shell has not yet identified a successor and its Anglo-Dutch structure may make a quick decision difficult.