23 JUNE 1939, Page 34


Two major points for shareholders emerge from Lord Bearsted's review at the Shell Transport and Trading meet- ing. One is that, whatever the outlook may be, this com- pany's immense financial resources will enable it to see things through without strain. The other is that, in Lord Bearsted's view, the 1939 prospect for the oil industry as a whole is not particularly encouraging. So far as the

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" Shell's " widespread interests are concerned, there has been no let-up in development and expansion. Big strides have been made in Venezuela, the discovery of the Rhas Garib field has improved the outlook for Anglo-Egyptian Oilfields in which " Shell " is largely interested, and an expansion programme is now in hand in Colombia. These develop- ments should go some way towards offsetting the loss in production from the seizure of the Mexican fields by the Mexican Government. As to the chances of a satisfactory settlement of the dispute in that field, shareholders were told of the recent discussions, but it seems that no real basis of agreement is yet in sight.

In analysing the outlook for 1939 Lord Bearsted empha- sised the key position of the United States. Although the statistical set-up at the end of 1938 was not unfavourable, he could not take a very optimistic view. Petrol stocks had recently increased, and although consumption was running about 5 per cent. above last year's level, American business recovery had not quite got the basis on which safe estimates could be made. Lord Bearsted did not venture a forecast of the earnings of the company itself, as I would not expect him to do in present conditions, but so far as one can judge it seems wisest to budget on rather, though not materially, lower earnings this year than last. I still feel, however, that " Shell " ordinary units are worth holding at their current price. * *