...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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...Background. Royal Dutch Shell Group is one of the world’s largest oil corporations and one of the largest companies in Europe. The company was created as a result of a merge between Netherlands’ Royal Dutch and UK’s Shell Corporation. The case looks at the issue of price differentials between several equity listings in different markets from the perspective of investors seeking an arbitrage opportunity. Royal Dutch trades more actively in the Netherlands and U.S. markets, whereas Shell trades more actively in the United States. The result is that the Royal Dutch/Shell relative price moves positively with the Netherlands and U.S. markets and negatively with the U.K. market. Structure. The Royal Dutch and Shell Group’s structure has all of its subsidiary companies controlled by the holding group of the company. These companies include Shell Petroleum NV located in Netherland, The Shell Petroleum Company Ltd based in UK, and Shell Petroleum Inc. based in the United States. These companies are controlled by the two parent companies, which are Royal Dutch Petroleum and Shell Transport & Trading. The ownership is divided in terms of 60/40 ratios. The relationship between these groups of holdings are meant to be 60/40, which means that all the inflows coming and all the outflows made to shareholders are divided between the two holdings. This represents that one share of Royal Dutch and one share of Shell is entitled to the same cash flows. The structure of the company...
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...Royal Dutch Shell Michael Swinson Dr. Brenda Harper, Professor BUS 508 Contemporary Business February 8, 2012 Shell Production and Operations Shell head office is located in Hague, Netherlands and the parent company, Royal Dutch Shell, is incorporated in England and Wales. Shell is engaged in oil and gas exploration and production, transportation and marketing of natural gas and electricity, and marketing and shipping of oil products and chemicals (www.itcilo.org). Shell’s strategic plan is to impose their status as a global power in the oil and gas industry. Providing a profitable shareholder return and meeting global demands for energy is a top priority. Shell’s core values are honesty, integrity, and respect for people. Global Corporation Types of Businesses “Shell is one of the world’s largest independent oil and gas companies in terms of market capitalization, operating cash flow and oil and gas production” (www.static.shell.com). The company consists of a global group of energy and petrochemicals companies. The number one goal of Shell are to engage resourcefully, reliably, and beneficially in oil, oil products, gas, chemical, and other selected businesses. Market Share For the past five years, Shell has been the industry leader in lubricant suppliers. During these years, Shell has gained 13% of the market volume in the United States and 23% in Mexico, the fastest growing North American market. Global demand for lubricants has grown around 6% since 2009...
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...1. Why has Shell become the subject of criticism and controversy? Shells operation in Nigeria are attracting criticism over Misleading allegations: By Environmental groups: like Greenpeace claimed that Niger Delta was an ecological disaster and this was attributed to shell’s operations like emission from flaring of natural gas at pumping sites, frequent oil spills and drainage of contaminated water into the waterways. Similar incidents had also taken place as observed in case of Bren Spar. By MOSOP: They claimed that Shell was stealing oil which was there property, without taking notice of the fact that the land of Nigeria had been all government owned and Shell had contractual agreements with the govt. Victim of political instability: Saro-Wiwa attacked shell because he believed that Shell’s international presence and multinational stakeholders would help garner international support for the Ogoni cause. MOSOP believed that Shell had control over govt and could help them in passing of Ogony Bill of Rights. Lack of Government efforts seen as Shell’s fault Due to declining profits, Govt was unwilling to contribute to improve infrastructure necessary to safeguard environment. But this was seen as shell’s unwillingness to focus on environment and to just exploit the communities and eco-system for commercial gain Long waiting period for implementation of environmental protection solutions: Projects like $3.8 billion liquefied natural gas plant took long time to...
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...Royal Dutch Shell in Nigeria For Shell, there are a few key issues that must be addressed. Since the company is located in Nigeria, the company faces a certain animosity from the native Nigerians specifically the Ogonipeople. One of the main key issues in this case comes from Ken Saro-Wiwa who is an avid Ogoni protestor to foreign companies stealing resources and suggesting that the Nigerian government gives nothing in return to the Ogonipeople. Ken argued where the Nigerian Bill of Rights had been compromised by the multinational corporation. From this conflict, violence escalated and people have died in protests against the government and Shell. Another key issue is the fact that the environment of Niger Delta is affected by the process of natural gas flaring and oil spills. Though Shell claimed that the oil spills were from the effects of corruption, their operations have damaged the land with acid rain and water contamination. This case at the time is concerned with Shells pending decision to take action in politics and violate business ethics or to sit back and face contempt of court exposing the company to judicial sanctions. Some of the key stakeholders in this case involve the government, Shell employees, CMD managers, and Shell investors. The Nigerian government relies on Shell to be profitable. At a point in time, the Nigerian government had owned between 25% to 80% through the Nigerian National Petroleum Corporation. The Nigerian government wantoil companies to...
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...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,...
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...Royal Dutch/Shell case write up Introduction Royal Dutch/Shell Group of Companies was formed through and alliance of Royal Dutch Petroleum company and Shell Transport Trading company in 1907. Even though the two companies remain separate, the matrix structure of Royal Dutch/Shell Group of Companies had helped the company survive the oil price collapse and some other crisis. By 1990, Royal Dutch/Shell’s revenues exceeded the industry leader Exxon’s, making it the largest oil company in the world. However, In the 1990s and early 2000s, the company’s reserve replacement ratio has dropped from above 100 percent to almost below 100 percent, which indicates that the company was having trouble with replacing the oils it produced each year with new reserves. In order to boost up its reserve placement ratio and offset other series of problems, Royal Dutch/Shell Group Companies changed its operating structures. In January 2004, the company announced that it would reduce its estimate of proved oil reserves by 4 billion barrels, or 20 percents. Six months later, by the time the restatement was completed, the company had reduced its reserves for 3 additional times. Royal Dutch/Shell’s reputation was hugely affected as it had been suited by several security boards. Shareholders were outrageous as well. Causations of the reserve restatement Firstly, the complex operating structure of Royal Dutch/Shell had a huge negative impact on Royal Dutch/Shell’s performances and it directly led...
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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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...steamers to carry oil in bulk, using for the first time the Suez Canal. They also set up bulk oil storage at ports in the Far East and contracted with Bnito, a Russian group of producers controlled by the Rothschilds, for the long-term supply of kerosene. Their strategy was high-risk: if news of their operations got out they would be squeezed out by Rockefeller’s dominant Standard Oil. With the maiden voyage of the first bulk tanker, the “Murex”, through the Suez Canal in 1892 the Samuels had achieved a revolution in oil transportation. Bulk transport substantially cut the cost of oil by enormously increasing the volume that could be carried. The Samuel brothers initially called their company The Tank Syndicate but in 1897 renamed it the Shell Transport and Trading Company....
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...Royal Dutch and Shell Write-up Sebastian Fersch, MiFFT2013 Jimish Gandhi, MiFFT2013 Ryan Kruger, MiFFT2013 Rafa Leon, MiFFT2013 1. What are cross listings and dual listings? Where are RD and Shell listed? What are ADRs? Cross listing is the listing of a company’s common stock on a different exchange than its primary and original stock exchange. For a company to be cross-listed, it must meet the requirements of all the exchanges its shares trade on. Cross listings provide companies with more liquidity and a greater ability to raise capital. A Dual Listed Company (DLC) is a corporate structure in which two corporations function as a single operating business through a legal equalization arrangement, but retain separate legal identities and stock exchange listings. Almost all DLCs are cross-border, and have tax advantages for the corporations and their shareholders. Royal Dutch and Shell used to be a DLC until 2004 with listings on nine exchanges across Europe and the United States. While Royal Dutch traded primarily in the U.S. and the Netherlands, Shell traded predominantly in the U.K. In the U.S., Shell shares traded as American Depository Receipts (ADRs). An ADR is a negotiable certificate issued by a U.S. bank representing a specified number of shares in a foreign stock that is traded on a U.S. exchange. An ADR allows you to own shares of a foreign company while realizing any dividends and capital gains in U.S. dollars. It is now a single entity with primary...
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...Overview The oil industry is an integral part of the U.S economy and with new legal revisions in place; Royal Dutch Shell will be better able to develop technologies to continue advancing this industry. Also know as Shell, they are headquartered in the Netherlands and are the second largest energy company in the world. “Shell has operations in over 90 countries, produces around 3.1 million barrels of oil equivalent per day and has 44,000 service stations worldwide (Shell, 2011).” Shell Oil Company, its subsidiary in the United States, is one of Royal Dutch Shell’s largest businesses. It has integrated itself into every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading. It also has in its holdings major renewable energy activities, including bio-fuels, hydrogen, solar and wind power. Shell takes pride in being a leading innovator in the oil industry. Political Analysis At $1.8 trillion dollars a year, oil is the most traded commodity and the demand over the past year is rising. As discussion to extended drilling on U.S soil has intensified, President Obama has recently enacted a plan to place a hold on the 1,700 mile Keystone Pipeline Project after hearing concerns from environmental groups such as the BlueGreen Alliance. This comes after “the State Department subjected the Keystone Project to three years of review” (Krauthammer, 2011) and construction was set to...
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...Talent Solutions Case Study AirAsia Business Challenge Company Profile AirAsia, the leading and largest low-cost carrier in Asia, services an extensive network of 85 destinations. Within 10 years of operations, it has carried over 152 million guests and grown its fleet from just two aircraft to 106. The airline today is proud to be a truly ASEAN (Association of Southeast Asian Nations) airline with established operations based in Malaysia, Indonesia, Thailand, Philippines and Japan. This is complemented by AirAsia X, its low-cost long-haul affiliate carrier that currently flies to destinations in China, Australia, Taiwan, Nepal, Korea and Japan. AirAsia was named the World’s Best Low Cost Airline in the annual World Airline Survey by Skytrax for four consecutive years, from 2009 to 2012. Since 2001, AirAsia has swiftly risen to become one of the leading low-cost carriers in the world. In Malaysia where its headquarters and other key corporate functions are based, one of its key human resource challenges has been to stay ahead of the growth curve by sourcing for quality candidates to fill critical high-level positions within the company. AirAsia had been advertising on social media networks such as Facebook and Twitter as well as other job portals to fill non-executive or executive roles. However, while this approach worked well for positions such as Flight Attendants and Guest Service Assistants, it was less successful when it came to filling...
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... CASE 8 ROYAL DUTCH SHELL : FUELING THE WORLD INTRODUCTION Almost 200 years ago, a London historic dealer began importing sea shell from the Far East to supply a fashion for exotic décor. Marcus Samuel enterprise arranged the foundation for a thriving import and export business later run by his sons, Marcus Juniorand Sam. At this time oil was largely used in lighting and lubricants and the industry was based in Baku and Russia with it is large reserve of high quality oil and strategic natural harbour. The arrival of the internal combustion engine in 1886 to a demand for transport fuel. Building on their shipping expertise the Samuel brothers commissioned a fleet of steamers to carry oil in bulk. They revolutionised oil transport with the maiden voyage oftheir first tanker, Murex. In 1892 murex was the first ever tanker to transit the Suez Canal. The brother company was name the shell transport and trading company in 1897. Itused a mussel shell as it logo. Shell transport activity in the East combined with a search for new sources of oilto reduce dependence on Russia brought it into contact with Royal Dutch petroleum. Thetwo company join force in 1903 to protect themselves against the dominance of standard oil. They fully merged into the Royal Dutch Shell group in 1907. Shell changed its logoto the scallop shell or pectin which is used today. By the end of the 1920 Shell was the world leading oil company producing 11% of the world crude and owning 10% of it tanker tonnage....
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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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...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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