...Strategy: Case Study – Royal Dutch Shell in Nigeria: Operating in a Fragile State by Dr. Isaiah A. Litvak 21 March 2011 1 Royal Dutch Shell ◦ 1907 - Merger of Shell Transport & Trading Company Ltd. and Royal Dutch Petroleum Company (Shell) ◦ 1936 - Shell operations started in Nigeria – Shell D’Arcy (Shell Nigeria) ◦ “Royal Dutch Group of Companies proved more than 50% of Nigeria‟s oil and gas reserves” – (Parboteeah, 2011) Nigeria ◦ Formed by Britain in 1914 - “…the colony and Protectorate of Nigeria, governed by „indirect rule‟ through local leaders” (BBC News, 2010) ◦ High poverty and deteriorated political and security stance since existence ◦ Worldwide economic importance – Huge oil reserves ◦ 80 % revenues to Nigerian Government through oil reserves Global Business Strategy: Case Study – Royal Dutch Shell in Nigeria: Operating in a Fragile State by Dr. Isaiah A. Litvak 21 March 2011 2 Compliments ◦ Support to Nigerian economy Criticism ◦ Oil Pollution (Jolly, 2011) ◦ Development of communities ◦ “Shell invests $1bn on Nigerian oilfield” (BBC News, 1999) ◦ “Currently the Delta gets 13 percent with the balance going to the central government and other states” (Ruseckas, 2009) ◦ Employment for Nigerians (Parboteeah, 2011) ◦ Involvement in violence – Ken SaroWiwa (Pilkington, 2009) ◦ Bribery (Wyatt, 2010) Ken Saro-Wiwa in 1993. Photograph: Greenpeace/AFP Shell’s Bonga offshore oilfield - Nigeria Global Business...
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...i. Summary Royal Dutch Shell is a Dutch and British based company that in 2009 was named the world’s largest corporation by Fortune and world’s second largest corporation by Forbes. Stuck in a quagmire of violence and political issues in Nigeria, Royal Dutch Shell’s challenge was to establish socially responsible business practices to enable the company to sustain and expand its operations in Nigeria and the Niger Delta in particular. A conflict resolution and public policy consultant was brought in how to develop some constructive ideas on how best to address the problems Royal Dutch Shell faced in Nigeria. This case is intended to introduce students to some of the complex the complex issues faced by multinational corporations in developing countries. Although Shell is very lucrative company that makes millions of dollars a day, they would be very hurt to lose business operation base in Nigeria. Shell went from an egoistic operation in Nigeria to a benevolent and principle based operation. If Shell even took on a larger sense of social responsibility, they would have gained a larger competitive advantage over the competition. ii. Chronology 1. This case begins when Benjamin Aaron, a conflict resolution and public consultant, receives a request from one of his important clients, a potential new member to the board of Royal Dutch Shell, to provide advice on how to address the problems that Royal Dutch Shell faced in Nigeria. 2. The case goes on to review the turbulent...
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...A Study of Shell Oil and its Stakeholders in Nigeria Part 1 (Week Six) A Review of Basic Issues Regarding the Background and Interests of Stakeholders of Shell Oil Company in Nigeria Chapter 1 Introduction The complexity of understanding the Shell Nigeria oil spill and applying critical analysis and leadership theories to the problem is a challenging debate. A reader would tend to assume that Shell is at fault and should take all the blame for this corporate and ecological mess. Therefore, the introduction needs to provide the reader with sufficient historical information and background of stakeholders such as Royal Dutch Shell Company, Nigeria (country), Niger Delta (province of Nigeria) and its directly affected tribal communities of the oil spill. The introduction is thorough as to avoid explaining in other key elements of this research paper. The Royal Dutch Shell was ranked No1 as the largest organisation in the world in 2012 by Global 500. Shell has boosted its first quarter earnings of 2012 by 11% compared to that of 2011. Shells long term projects that have just commenced creating; a gas to liquids plant in Qatar and further projects in Canadian oil sands, have in part contributed to these revenues. Royal Dutch Shell has 87000 employees globally (Global 500, 2012) The first Shell Company in Nigeria was started in 1936 by The Royal Dutch/Shell Group. The Royal Dutch/Shell Group then founded Shell D’Arcy. Two years later in November 1928...
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...Shell Company Analysis Dr. Scruton Methodist University Management and Organization Abstract Shell Oil is a global company in the oil industry. This long established company has withstood the test of time in this competitive market. Management practices have established the resources necessary to overcome the obstacles of a global company. This detailed analysis of Shell Oil focuses on management in order to provide an understanding of how the company is able to succeed. The organizational analysis provides insight into Shell’s goals, culture, and resources. An example of a specific problem that Shell faced, oil spills in Nigeria, continues off of the company analysis. Nigeria is a major extraction location for shell, but sabotage and oil leaks grew to be a major concern. Shell faced court cases in search of relief in Nigeria, but the majority of the oil leaks were a result of sabotage; therefore, shell was not responsible. However, people believed that it was shell’s responsibility to safeguard the oil lines and prevent sabotage in the first place. Shell funded the cleanup of previous oil spill sites along with a major advertising campaign to avoid a negative impact on its business. Some people still believe that Shell should be taking more responsibility for the oil spill crisis in Nigeria. Shell Company Analysis Oil is a resource that has been in great demand since the production of combustion engines, as well as other industrial machines. Royal Dutch...
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...TMG 610 Global Trends in Technology Case #8: Royal Dutch / Shell: Ethical Issues, Human Rights and Resource Extraction Case Study Report Ozel Kirkland 29 March 2014 I. Introduction – In General Terms What is this case is about? Why is it relevant to TMG 610? Whether the extractive industries like it or not, the nature of their involvement with host nations is a precarious balance between competing interests (Dicken, 2010), and firms are either obligated to conduct themselves responsibly when dealing with developing nations like Nigeria, or mitigate the negative effects of their choices after the fact, like Royal Dutch / Shell was compelled to. Unfortunately, some extraction companies have a reputation for embracing their short-term self-interests, exploiting developing countries rich with oil like Nigeria, instead of acting ethically. Many of the extractive resources of the world are found in poorer, or developing countries. The question is how can these resources be exploited without foreign assistance. In the earlier part of the twentieth century, many of these extractive industries originated from colonial powers that had expanded into these countries and invested in these companies. This expansion was singularly intended to expand the grip for these foreign countries over mineral resources, used to support their home country and the growing manufacturing and infrastructure growth in those home nations. However the relationships between these host...
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...Shell Nigeria is one of the largest oil producers in the Royal Dutch/Shell Group. 80% of the oil extraction in Nigeria is the the Niger Delta, the southeast region of the country. The Delta is home to many small minority ethnic groups, including the Ogoni, all of which suffer egregious exploitation by multinational oil companies, like Shell. Shell provides over 50% of the income keeping the Nigerian dictatorship in power. In 2000 oil and gas exports accounted for more than 98 % of export earnings and about 83 % of federal government revenue. New oil wealth and the concurrent decline of other sectors, fuelled massive migration to the cities and led to increasingly widespread poverty, especially in rural areas. The Nigerian government hanged 9 environmental activists in 1995 for speaking out against exploitation by Royal Dutch/Shell and the Nigeria government. The most prominent activist was Ken Saro -Wiwa and in 2009 Shell settled the case with a US$15.5 million “humanitarian gesture”. The settlement came days before the start of a trial in New York that was expected to reveal extensive details of Shell's activities in the Niger Delta. There is currently a joint effort by the government and Shell to suppress a growing movement among the Ogoni people towards, environmental justice, recognition of their human rights and economic justice (in the form of wages and equal opportunities). Additionally, Shell has brought extreme, irreparable environmental devastation to Ogoniland...
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...Critical Essay- Shell Dann Sokol: 14679766 Word Count: 1665 Oil products are controlling aspects of how people and societies go about everyday activities and life. Thus, the ever-growing corporations such as Royal Dutch Shell and BP, who supply these products, are subject to immense public scrutiny to the quality of these products and more recently the ways in which they are manufactured. The focus of this argument involves the ethical aspect of Shell’s management with regards to the issue of human rights in the regions they operate in, as well as their engagement with their employees and other stakeholders. According to their website the Niger-Delta region, which Royal Dutch Shell produces a quantity of their oil, the company provides funds to the government and commissions. Under law of the Niger Delta Development Commission and operations through the Shell Petroleum Development Company of Nigeria (SPDC), Shell contributed up to $82 million in 2008 ($56.8m and $25.2m, respectively). The contributions through the SPDC “promote and support small businesses, agriculture, skills training, education, healthcare, micro lending and capacity building.” They also have contributed through royalty payments amounting to “$36 billion in taxes and royalties from 2005-2008.” Although the government will ultimately decide how to allocate the funds, Shell firmly believes that through their contributions “these funds can be used to promote development, reduce poverty and support economic...
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...| Ship “Shell” Hit an Iceberg | Shell Oil Scandal in 2004 | | In 2004, the Shell Company was involved in an oil reserves reporting scandal. It made them caught in low point. | | Ines Chen, Leilani Zhao, Bingchen Wang | Contents Background……………………………………………………………………….. 2 Purpose of the case study… ………………………………………………...…2 Shell Company, the oil Industry giants………………………………………..3 The Iceberg ----Shell oil scandal ……………………………………………….. 4 Effect of the Scandal ……………………….……………………………………..6 The Origins of the Scandal …….………………………………………………....7 Weak internal controls, the dual company structure ......……………….…7 The shortage of oil reserves and World oil crisis ……………….....………10 The Closed Corporate Culture…………………………….………………..….11 Conclusion…………………………………………………………………….……14 Works Cited………………………………………………………………………15 Background: In recent years, Shell was one of the most famous companies of the world because of excellent long-term planning, outstanding technical capabilities and unique management style. Shell, which was the Anglo-Dutch heritage and a twin board structure, once was treaded as textbook example of a multinational company. When people talked about the Shell Company, they always remembered the old corporate slogan, 'You could be sure of Shell'. Yes, this seemed a mere statement of fact. But such the good company liked this also did some bad things from the mid-1990s. The company had dealt with the environmental and human right's problem, and its competitors...
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...Royal Dutch Shell Introduction and strategic profile of the firm 1. The company and the industry Royal Dutch Shell, commonly known as Shell, is a company incorporated in the United Kingdom, headquartered in the Netherlands, the Anglo-Dutch multinational oil and gas companies. Created by the merger of Royal Dutch Petroleum and UK-based Shell Transport & Trading, which is the largest company in the world. Shell's business is very extensive, including exploration and exploitation of oil and natural gas, petroleum products and chemical products marketing, coal and natural gas production, processing, marketing, power generation business, as well as renewable energy. 2. Overview of firm’s corporate, business, and international strategies Shell operates 10% of the global oil and gas resources for exploration and exploitation in more than 50 countries worldwide and operates in more than 100 countries and regions. The industry of shall is consisted by 14 segments, each operating oil, gas, chemical products, non-ferrous metals, coal and so on, where oil and fossil fuel production and sales capacity ranks second in the world. Shell invests in more than 130 countries, has more than 100,000 employees, and total assets over 100 billion dollars. Today, Shell companies business involve in many countries, more than any other oil groups. The key of Shell's international strategy is that explore gas and oil in about fifty countries, petroleum refining in 34 countries, and the oil...
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...In 1890, Aeilko Jans Zijlker located oil in the Dutch East Indies and found Royal Dutch. The company partnered with Shell 17 years later, keeping 60%. Shell took care of the transportation and storage while Royal Dutch processed and refined the oil. The companies became world leaders in the oil industry after WWII. Shell partnered with British Petroleum and unwillingly, with the Nigerian government that ended up owning up to 35% of the partnership. Nigeria was Africa’s most highly populated nation. The Nigerian National Petroleum Corp owned 55 percent of the Shell Petroleum Development co of Nigeria Limited joint venture. They settled similar deals with other oil companies like Chevron, Texaco, and Mobil. In the late 90s, oil counted for about 90% of the country’s foreign exchange profits and placed it among the top 10 oil producers and distributers in the world. In the Niger Delta, which most oil was extracted from, 20 tribes could be found. The Nigerian government had promised to invest to help these tribes but the organization in charge of the project claimed to have never received funding from the government. On the other hand, Shell had spent about $22M in community development projects to appease the tribes near the Niger Delta. Around that area, because of oil extraction, refining, storing, and transportation, the environment had been severely damaged. The people provoked oil spills in response to the environmental damage and with the intention of generating spill-cleaning...
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...Kiobel versus Dutch Petroleum IRAC Case:KIOBEL, INDIVIDUALLY AND ON BEHALF OF HER LATE HUSBAND KIOBEL, ET AL. v. ROYAL DUTCH PETROLEUM CO. ET AL. No. 10–1491, U.S. Supreme Court Issue:Can you sue Corporations under this Tort? Does the Alien Tort Statue even apply to outside the US or to what extent can you prosecute? Rule: 28 U.S.C. § 1350 : US Code - Section 1350: Alien's action for tort - The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States. Analysis: The case of Kiobel v. Royal Dutch Shell Petroleum Company a.k.a. Shell was brought up by a group of 12 Nigerians claiming that they or their relatives were tortured, unlawfully arrested, executed, and other crimes against humanity. They alleged Shell supplied ammunition to the Nigerian police, transported soldiers in the corporate helicopters to carry out the crimes, Shell was involved in Corporate Bullying, aided and abetted in the rape of Nigerian women, and violation of human rights (Legal Information Institute, 2015). Kiobel could not sue Shell in Nigeria because the Nigerian Government was corrupt. The Nigerian group’s attempt to file a suit was dismissed by the UK and the Netherlands Company because those countries would not take jurisdiction. The group had taken political asylum because of the crimes in Nigeria and after becoming US citizens. The 12 Nigerians sued in the US under the 1789...
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...Shell in Nigeria: The Ethical Issues Ethics are moral principles, as of an individual, a country or a religion. A lot of people have different perspectives of the world and carry different opinions involving what is ethical and what is not. Ethics are a major concern in International Business and companies face ethical issues very frequently. Royal Dutch Shell, commonly known as Shell, is a fusion of over 1,700 companies around the world. Shell Nigeria is one of the largest oil producers in the Shell Group and more than 80% of the oil extractions in Nigeria is in the Niger Delta. The Delta is a home to many small minority ethnic groups, such as Ogoni, all of which suffer exploitation of human rights, environmental rights, and economical and health issues by big multinational oil companies, mainly Shell. Emanuel Nnadozie, A famous writer, has said "Oil is a curse which means only poverty, hunger, disease and exploitation for those living in oil producing areas.” This paper will focus mainly on the case of Shell’s ethically immoral attitudes towards Ogoni, but one must keep in mind that there are dozens of other groups that suffer the same exploitation of resources and injustices, both environmentally and economically. Firstly, Ogoni continuously faces human rights violation from Shell. Oil from Ogoniland provides close to $30 billion to the economy of Nigeria and the people of Ogoni see only very little from their contribution to Royal Dutch Shell. According to The Essential...
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...Delivery and growth Royal Dutch Shell plc Annual Report and Form 20-F for the year ended December 31, 2007 Royal Dutch Shell Our Business With 104,000 employees in more than 110 countries and territories, Shell plays a key role in helping to meet the world’s growing demand for energy in economically, environmentally and socially responsible ways. Our Exploration & Production business searches for and recovers oil and natural gas around the world. Many of these activities are carried out as joint venture partnerships, often with national oil companies. Our Gas & Power business liquefies natural gas and transports it to customers across the world. Its gas to liquids (GTL) process turns natural gas into cleaner-burning synthetic fuel and other products. It develops wind power to generate electricity and invests in solar power technology. It also licenses our coal gasification technology, a cleaner way of turning coal into chemical feedstocks and energy. Our Oil Sands business, the Athabasca Oil Sands Project, extracts bitumen from oil sands in Alberta, western Canada and converts it to synthetic crude oils. Our Oil Products business makes, moves and sells a range of petroleum-based products around the world for domestic, industrial and transport use. Its Future Fuels and CO2 business unit develops fuels such as biofuels and hydrogen and synthetic fuels made from natural gas (GTL Fuel) and potentially from biomass; and leads company-wide activities on CO2 management. With...
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...The role of LNG in a global gas market Linda Cook Executive Director Gas & Power Royal Dutch Shell plc Oil & Money Conference, London 21st September 2005 Linda Cook is Executive Director Gas & Power of Royal Dutch Shell plc. Her other responsibilities are Renewables, Hydrogen and Carbon Dioxide; Shell Global Solutions; Group Research; East Asia and Australasia. She was born in Kansas City, Kansas, in 1958 and joined Shell after graduating in Petroleum Engineering from the University of Kansas. She has worked for Shell companies in the United States, the Netherlands, and Canada. Before becoming a Group Managing Director, Linda Cook had been President and Chief Executive Officer of Shell Canada Limited since August 2003. Prior to that she has been Chief Executive Officer of Shell Gas & Power since 2000. She is a member of the Society of Petroleum Engineers and a Director of the Boeing Company. Linda Cook: The role of LNG in a global gas market Global demand for natural gas may double by 2030, with LNG growing perhaps fivefold – driven by continued cost reduction. Despite the capital intensity of LNG projects and the complexity of the value chain, LNG supply capacity is increasing rapidly. Existing schemes are being expanded and many greenfield projects are moving ahead. Although the spot market for LNG is growing, new projects continue to be underpinned by long-term sales contracts. Competition for supplies is increasing price connectivity between regions. Seizing...
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...it outsource? Is it vertically integrated, or does it rely on a network of suppliers? In 2012 Royal Dutch Shell was crowned number one on Fortune Magazine's Global 500 list, the magazine's yearly ranking of the world's 500 largest corporations (O'leary, 2012). In 2013 alone the company brought in revenues of $451.2 billion with a net income of $16.5 billion. Royal Dutch Shell Group, an oil and gas company, was created when Royal Dutch Petroleum and British based Shell Transport & Trading merged in 1907; the company is headquartered in the Hague, Netherlands but is incorporated in the London and Wales. (About Shell). It was in the early 20th century that the company began its dominate climb to the top of the world market in large part to their role during the first world war. Shell was the main supplier of fuel to the Allies, the sole supplier of aviation fuel, provided 80% of the Army’s TNT and by the 1920s it established itself as the world’s leading oil company, producing 11% of the globe’s crude oil supply (About Shell). Today the company operates in more than 70 countries with an average of 92,000 employees, 44,000 shell service stations around the world, over 30 refineries and chemical plants that produce 2% of the world’s oil and 3% of the world’s gas at 3.2 million barrels produced daily (About Shell). Vertical Integration According to their website Royal Dutch Shell’s main mission is to “engage efficiently, responsibly and profitably in oil, oil products, gas...
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