AMSTERDAM (AP) — Royal Dutch Shell PLC said Monday Chief Executive Peter Voser will step down in early 2014 as it reported lower first-quarter profits in the wake of a decline in oil prices.
The departure comes as a surprise, as Voser is just 54 years old and is well-regarded within the industry. The company did not specify why he has decided to leave.
Voser has led Shell since July 2009, investing heavily in new production. In particular he has focused on expanding the company's presence in liquefied natural gas, or LNG, which can be transported without pipelines.
The company also became Europe's largest oil company by market capitalization on his watch, as major rival BP PLC struggled to recover after its massive 2010 oil spill in the Gulf of Mexico. Among independent oil companies globally, only ExxonMobil is larger.
Chairman Jorma Ollila praised Voser for "reorganizing the company, delivering growth, and developing a clear forward strategy with a strong portfolio of new options."
He said a search for a new CEO is underway, with candidates inside and outside the company under consideration.
"The search for a replacement CEO will be an unwelcome distraction," said analyst Richard Hunter, Head of Equities at Hargreaves Lansdown Stockbrokers, who rates shares a hold.
However the company has time on its side as Voser won't be leaving until the first half of 2014.
The surprise announcement came as Shell said its net profit fell to $8.18 billion from $8.74 billion in the first quarter of 2012. Revenues fell 5.1 percent to $112 billion.
Stripping out the impact of oil price fluctuations and asset sales, underlying earnings grew 2 percent, the company said in a statement.
Shell produced 3.56 million barrels of oil per day, fractionally higher than 3.55 million a year ago. Shell said core production is growing, but some of its capacity in Nigeria is closed due to security threats.
Production earnings fell 10 percent to $5.65 billion due to lower oil prices. The company's refining arm profits rose 28 percent to $1.69 billion amid better margins.
Hargreaves Lansdown's Hunter said the company's earnings were better than expected, but highlighted that Shell is playing a "long game" by investing heavily in infrastructure to increase earnings over time.
He said Shell has an "extensive project plan...to underpin future production across several energy sources." Around 30 projects are under development.
Shares rose 1.3 percent to 26.18 euros in early trading in Amsterdam.