Royal Dutch/Shell: Oil industry must update financial model

Many of the oil industry's long-standing financial policies need updating to adjust to a business environment being transformed by technology, sector maturity, and the digital economy.So says Royal Dutch/Shell Group Finance Director Stephen Hodge. Left unmodernized, he said, the financial management orthodoxies that concentrate on "size for its own sake, return on capital, and cost-cutting, [will prove] unreliable guides to long-term growth in shareholder value."Outdated modelSpeaking at the Institute of Petroleum's IP Week late last month in London, Hodge said, "There is a sort of standard model for financial management in the oil industry. Like any other standard model, it is a ...

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