A 20-minute stroll through The Hague takes you from the prime minister’s office to the workplace of someone who’s arguably even more powerful: the CEO of Royal Dutch Shell Plc.

       But when Ben van Beurden, who’s worked at Shell since he graduated from nearby Delft University in 1983, called Mark Rutte on Sunday afternoon, the conversation was anything but close.

       He rang to tell the prime minister that Europe’s biggest oil company was moving its headquarters to London, a step that would simplify its corporate structure and cut taxes for investors.

       What’s more, the company would drop Royal Dutch from its name, discarding a link to the ruling House of Orange that goes back to its founding in the 19th century.

       Rutte reacted with dismay and embarked on a last-ditch effort to persuade Shell to stay, according to people briefed on the conversations. He lobbied coalition partners to back the abolition of a tax on dividends that was one of the main drivers for Van Beurden’s decision.

       Shell CEO Ben van Beurden

       The relationship between Shell and its home country had been under strain for some time. Hosting a company that pumps more than three million barrels equivalent of oil and gas each day is increasingly awkward for many in Dutch society, even though Van Beurden has committed the company to achieving net-zero carbon emissions by 2050.

       Earlier this year, a judge ruled Shell’s transition to clean energy wasn’t happening quickly enough and ordered the company to slash greenhouse gases even faster out of respect for the human rights and opinions of Dutch citizens. Last month, the pension fund for government employees in the Netherlands decided in to dump all oil company shares, a decision that infuriated Shell’s management team.

       The Netherlands – home to many multinationals that punch above the weight of the US$900bil (RM3.75 trillion) economy – is seen as one of Europe’s most business-friendly nations. But Shell is not the first company to balk at the burdens of corporate life there. Unilever Plc, the Anglo-Dutch consumer goods giant, choose London for its headquarters last year.

       The company is embarking on a multi-decade transition from oil and gas to clean energy, and trying hard to keep its investors sweet while it does so.

       After aggressively cutting its dividend last year at the depths of the Covid-19 pandemic, Shell is now promising to return a torrent of cash to its shareholders.

       In these circumstances, the 15% withholding tax that the Netherlands imposes on dividends has become more onerous.

       Rutte had tried to scrap the dividend tax in 2017, but had to backtrack after intense opposition in Parliament.

       In the wake of Shell’s announcement, he made one last ditch effort to persuade his coalition partners to drop the tax in a bid to keep the energy giant from leaving The Hague.

       Before the end of the day, it was already clear the government would fail to get a majority.

       Shell says that simplifying the structure was always part of the plan, because of the limitations of having to juggle two classes of shares in different jurisdictions.

       Aside from the challenges of a split nationality, Shell is under growing pressure about the environmental impact of its business.

       Setting a net-zero target for 2050 has done little to ease the company’s predicament, with everyone from activists and courts on one side to shareholders and hedge funds on the other telling it to move faster, or slower, or in a different direction entirely. ― Bloomberg

       Laura Hurst, Diederik Baazi and Fred Pals write for Bloomberg. The views expressed here are the writers’ own.