Royal Dutch Shell Case Study

Royal Dutch Shell Case Study

Submitted by: Waqas Ahmed Student ID: M003416757 Module: MGT3201 – Global Business Strategy Module Leader: Dr Qiuping Li

Global Business 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 Strategy: Case Study – Royal Dutch Shell in Nigeria: Operating in a Fragile State by Dr. Isaiah A. Litvak

21 March 2011

3

Addressing Question 1



Risks Operating in Nigeria
◦ Criticism by NGOs – Friends of Earth (pg. 484, Parboteeah, 2011) ◦ Losing capable Employees (pg. 484) ◦ Deadly threats to Shell employees on site (pg. 485) ◦...

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