"The play was bad, the set was drab and the audience was hostile but [the performer] yesterday gave what was probably the best performance of his life. Had he a better story to tell, [he] might have won over most of the analysts and fund managers who turned up to yesterday’s presentation, held at the modest venue of the Tower Thistle Hotel to the east of the City, looking for blood in the shadow of London’s most famous execution grounds."

This was not, as you might think, the review of the latest theater opening of a West End production in London. Instead, it's a lead business story in the The Times: i.e. their report of last week's meeting of Shell chairman, Sir Philip Watts with financial analysts and investors. According to Carl Mortished in The Times, "gone was the defensiveness, the irritation and impatience that have spoilt his previous encounters with the world outside Shell. 

"The chairman’s robust, no-nonsense approach had come to resemble a dressing-down by the commanding officer rather than a discussion about matters of mutual interest. But yesterday was different. Instead of his usual brisk march to the top table, flanked by deputies and clutching notes, Sir Phil walked alone and empty-handed on to the stage looking every bit the vicar addressing a congregation of the bereaved. It was a cunning move. Speaking without notes and peering into the bright lights, he looked a bit sad." 

Watts briefly recited a litany of achievements — cash generation, record earnings and landmark projects — but quickly got to the quesiton of the oil reserves. According to Mortished, now "his audience leaned forward, hungry for the kill." This after all was what they had come for: to hear what had happened to the near-£4 billion shortfall in proven oil reserves. When the news was announced on January 9, 2004, Watts declined to appear to give an explanation, and there were calls for his resignation. 

Watts apologised for not appearing then, and, according to Mortished, his apology now was "full but not abject. 'I can come up with a perfectly logical explanation but the fact of the matter is it was a mistake. “I regret that and I am sorry I wasn’t there. I’m sorry I got it wrong.' There was the briefest of pauses and then gruff (but thoroughly tamed) Sir Phil was back telling us how the company was dealing with the problem."

Mortished reports: "It was left to Walter van der Vijver, the exploration director, to turn over stones and explain the missing 3.9 billion barrels of oil and gas which it was forced last month to remove from its balance sheet. There were a lot of wriggling worms, almost a decade of misrepresentations in Nigeria, Oman and Australia but Mr Van de Vijver offered no hostages. In an ordinary company, those responsible would walk the plank, but at Shell everyone is responsible and no one is to blame."

Watts vowed to stay in his post even as the oil giant reported disappointing year-end results and surprised markets by forecasting no improvement in production levels until 2006. Watts said in a conference call that he was "determined" to fix the company's problems and that he had "wholehearted" support of the board. He reaches the company's mandatory retirement age of 60 in June 2005. 

Responding to pressure for more oversight of corporate management, Watts said he would be open to reconsidering the much criticized two-headed structure of the company. 

But according to the New York Times, investors said the concession came too late to improve their opinion. The profit report and forecast, coupled with the company's surprise reduction in reserve estimates on Jan. 9, have fundamentally altered the way that the company is viewed, investors said. 

"At some point, we'll start worrying about them not having enough oil to produce in the future," Ivor Pether, head of portfolio construction at Royal London Asset Management, said. "They need to boost reserves relative to production by 25 percent."

In a report titled, "Shell Transport Trading: There are ways to sleep easier," Merrill Lynch analysts wrote of the fourth-quarter earnings: "Overall, a very disappointing set of results, particularly given that Exxon-Mobil and Chevron Texaco last week beat the market consensus by 15 percent and 8 percent, respectively."

And so analysts and investors continue to try to fathom the emerging Shell story. "Perception has gone through a seismic shift," said Pether. Shell was once seen as "ultraconservative, but very high quality, with a lots of good projects out there."

But now what? Was it a single big mistake, and everything in Shell is still sound? Or is it part of a pattern, a harbinger of more bad news down the pike? What sort of management is this? If they make a mistake like that, what else have they done? Or not done? What sort of results will they produce in future? And after all, what sort of a company are we dealing with here? Whatever the answers to these questions turn out to be, they will come in the form of - a story.

Read the New York Times
Read The Times story

For more examples of Storytelling in The News, go to the Archive