Shell picks oil and gas veteran Sir Andrew Mackenzie to lead its green revolution
Shell raised eyebrows yesterday when it picked former BHP chief executive Sir Andrew Mackenzie to steer it through the green revolution.
He will take over as chairman in May from Chad Holliday, who has been in the role for six years.
Mackenzie, a geologist by training who was knighted in 2020 for services to business, has been a director on Shell’s board since October.
New chairman: Sir Andrew Mackenzie will take over at Shell in May from Chad Holliday, who has been in the role for six years
But some have questioned whether he is the right man for the job given that the biggest item on the agenda for energy companies is to make the shift to renewable power and seeing through ambitious climate targets.
The 64-year-old Scot, a doctor’s son from a coal town near Glasgow, is an oil and gas and mining veteran. He was the chief executive of BHP from 2013 to 2019, and also spent 22 years at Shell rival BP.
His time at BHP was overshadowed by a deadly dam collapse at an iron ore mine in Brazil – the country’s worst ever mining disaster.
An iron mine run by BHP and Brazil’s Vale had been dumping its liquid waste behind a dam.
When the dam eventually burst, it released more than 40m cubic metres of sludge, knocking down most of the village of Bento Rodrigues, killing 19 people, and destroying local wildlife.
Mackenzie will also be taking over at a time when Shell is perceived to be behind BP in its plans for the energy transition.
Green target: Shell is aiming to reach net zero – meaning it will balance out any emissions it produces – by 2050
The company is aiming to reach net zero – meaning it will balance out any emissions it produces – by 2050. But there has been discord within Shell over its strategy – and in late 2020 a slew of executives at its clean energy division all left the group.
In a statement, the company said: ‘Andrew brings to Shell his experience of leadership, his global outlook, and a deep understanding of the energy business and climate action.’
But others were more critical. Mark van Baal, the founder of environmental activist shareholder group Follow This, said the appointment was ‘a kind of insult to responsible investors who are increasingly voting for change’.
Follow This has spent years campaigning for Shell to crack down on its emissions and tabled resolutions on the issue at its annual meetings.
Van Baal said: ‘This is a very bad signal to responsible investors who increasingly ask for the company to embark on the energy transition away from fossil fuels to renewables.
‘I think institutional investors who are serious about climate change will not like this.’
Richard Hunter, head of markets at Interactive Investor, said Mackenzie would need to prove his critics wrong.
He said: ‘As chairman he’ll be more of a mouthpiece than rolling his sleeves up. But that being said, he’s got this incredible experience, there’s little doubt in his CV, and there’ll be a lot of crossover in terms of experience.’
Shell’s other main priority is recovering from the blow dealt by the pandemic, which sent it nosediving to a £15.6billion loss last year and forced it to cut its prize dividend by two-thirds.
The oil major will be aided by rising oil prices – which had crashed as the use of car and jet fuels slumped during lockdown but are now back at pre-pandemic levels.
Documents filed by Shell yesterday showed chief executive Ben van Beurden’s pay packet fell by 42 per cent to £5million after 2020’s dire performance. This was partly down to not receiving a bonus.