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Shell is a global group of companies which produces energy and petrochemicals products. Its business includes Upstream Americas, Upstream International, Downstream, and Projects & Technology. Shell has got 101,000 employees worldwide in around 90 countries and territories. Thus shell meets the world's growing demand for energy in economically, environmentally and socially.
Shell's business can be broadly classified in five areas. Exploration & Production; Oil Sands; Gas & Power; Chemicals; and Other Industry Segments
Exploration & Production: Shell helps in exploration of oil and gas fields by surveys and exploration of wells. This takes place in 36 countries. Its activities include drawing up contractual agreements; exploring; surveying and drilling; analyzing the results; developing and planning for production; running production operations and maintenance; and decommissioning.
OilÂ SandsÂ - This involves in converting the crude oil from the wellhead into Shell products. It refines and processes crude oil and other feed stocks to market fuels and lubricants.
Gas & Power - Shell delivers natural gas by long-distant pipeline or tanker. Shell has got five liquefied natural gas plants and power plants and markets electricity.
The Chemicals business is one of the core businesses of the Royal Dutch/Shell Group. Shell produces petrochemicals in around 70 shell chemical companies and then further processed by their industrial customers. Shell chemical companies are the largest petrochemical suppliers in the world. Their products range from basic chemicals such as ethylene, propylene and aromatic chemicals through intermediates such as styrene monomer, ethylene glycols, solvents and detergent alcohols.
Other Industry Segments includes renewable, Shell Hydrogen, Shell Consume, Shell Trading and Shell Global Solutions
Shell sees great potential in unconventional hydrocarbons. Thus combination of unconventional and shell's technology will drive the company in both resources and reserves basis and will provide a long term production growth.
History of shell:
The two multinational companies, Royal Dutch Petroleum Co. of the Hague, Neth., and Shell Transport and Trading Co., PLC, of London, Eng began as rivals. In 1878, Marcus Samuel in London took over his father's import-export business (which included Oriental shells) and he started selling kerosene and there by entered the oil business in East Asia, and after that in 1897 he founded Shell Transport and Trading Co., Ltd. At the same time in 1890 the Dutch businessmen found the Royal Dutch Co. for the Exploitation of Oil Wells in the Dutch Indies, in 1907 the two companies united in to one named Royal Dutch/Shell Group, and placed producing concerns in Egypt, Iraq, Romania, Russia, Mexico, Venezuela, California, and Oklahoma. The logo named scallop shell is since 1900s.
In order to simplify the management, the companies started to trade as a single company on 20 July 2005 for the first time in history in its 98 years. "Royal Dutch Shell" is headquartered in the Netherlands and incorporated in the UK.
Faisal Khamees Al Hashar Managing Director says "We shall continue to deliver best value to our stakeholders by providing superior offerings to our customers, maintaining our high financial performance and improving our standing as a good corporate citizen of Oman by aligning our direction in long-term sustainable fashion."
Â http://www.shell.com/home/content2/om en/about_shell/how_we_work/mission_statement_1112.html
It is observed that the objectives of the shell simple. They emphasis the Royal Dutch Shell executives to act wisely at all times in harmony with Shell General Business Principles, which will include the principles of honesty, integrity, openness and respect for people in all of Shell's dealings. Â http://royaldutchshellplc.com/2008/03/13/mission-statement-for-this-website-royaldutchshellplccom/
Shell - Overview of current strategy
The current strategy of Shell is focused on three issues
1. Increased upstream activity which will deliver profits downstream
2. to improve operational performance and returns in every sector of shell business
3.making sure that shell's culture is always 'enterprise first'.
The portfolio of shell includes,
1. Oil production which is the core business
2. Oil related business which includes petrol stations, explorations and production and oil by products
3. Wider energy operations which includes LNG or liquefied natural gas and renewable energy.
4. Shipping which is transportation and consultancy for eg:governments
5. Credit cards.
CEO peter Voser says" This seems to be exciting time for shell for a financial and production growth Shell should be in a surplus cash flow position in 2012, after capital investment and dividend payments, assuming $60 oil prices and a more normal environment for natural gas prices and downstream."
"By Continuous improvements in operating performance, with an emphasis on safety, asset performance and operating costs, including firm plans for $1 billion of cost savings in 2010, and staff reduction of some 2,000 positions by end-2011.Net capital investment is expected to be $25-$27 billion/year for 2011-14, with up to $3 billion/year of asset sales, and $25-$30 billion/year of organic investment. Cash flow from operations excluding net working capital movements was $24 billion in 2009. Shell expects cash flow to grow by around 50% from 2009-2012 assuming a $60 oil price and a more normal environment for natural gas prices and downstream margins. In an $80 world, 2012 cash flow should be at least 80% higher than 2009 levels.Â Oil & gas production is expected to average 3.5 million boe/d in 2012, compared to 3.15 million boe/d in 2009, an increase of 11%, in line with previous guidance of 2-3% average annual growth rates, and with confidence in further growth beyond 2012.These changes will enhance both Shell's financial flexibility, and the potential for the dividend payout to be more closely linked to Shell's profitability. The dividend for Q1 2010 is expected to be $0.42/share, and is expected to be unchanged from 2009 to 2010. The medium-term upstream fundamentals are robust, we expect oil to trade typically in a $50-$90 range, and to trend to the upside."
Shell's PR disaster and the turning point for CSr:
1995 was the bad year for shell when it was accused of complicity in the execution of Ken Saro Wiwa and eight other activists in Nigeria. Thus Shell temporarily lost the confidence of investors and the public. And thus there was high demand that shell should know the importance of their public reputations and the ability of campaigners to damage them. As a solution for this the CSR was carried over. To overcome the complicity shell carried out various programs to rebuild its reputation like
Shell spent £20 million on its PR offensive
Shell published a statement of business principles which gave importance to honesty, integrity and respect for people.
3. The company was focused on its openness and dialogue.
4. They produced a report focusing on environmental issues and created a new website which encouraged stakeholders to 'Tell Shell' and thus enabled the community in making decisions and no definite commitments.
So employing CSR helped the companies to stop anti-corporate activism and it brought success for corporations regaining their public image in terms of the social and environmental needs of business. Tom Delfgaauw, former vice president for sustainable development at Shell, described the company's problems in the mid 90s as 'the best thing that ever happened to us, first because we've come out of it much, much stronger as a company, and second because it accelerated a great many needed corporate developments.'
Shell has invested more than USD 273 million in corporate social responsibility (CSR) program in 2006 to prove that the company has got a commitment to involve in community level.
Shell presented its successful CSR initiatives at the 4th Corporate Social Responsibility (CSR) Summit, which was organized by IIR in association with Shell, when it was held recently at Dubai's Dusit
Downstream of Shell in China. Downstream deals with offering lubricants, bitumen, fuel and retail services.
In 2006 shell was the topmost international oil company marketing lubricants in China with a 75% share in Tongyi. In past year it increasd agin by double the ratio. At present Shell has 5 lubricants blending plants in China and now a plant is in process in Zhuhai, Guangdong Province. Thus the plant produces Shell branded lubricants.
In case of retail, Sinopec and Shell established a joint venture in Jiangsu and it has got more than 400 sites in operation in Suzhou and Wuxi.
Apart from the Jiangsu partnership, Shell is currently operating Shell-branded retail sites in Guangdong, Tianjin, Beijing, Chengdu, Chongqing and Shaanxi. In total, about 600 Shell and JV sites are managed in China.
Shell has 14 bitumen depots in China with emulsion and Polymer Modified Bitumen manufacturing plants. Mostly every provinces and major highway projects in China is using high quality Shell bitumen, including roads surrounding Tiananmen Square and the major sites of 2008 Beijing Olympics.
GTL (Gas to Liquids) Fuel:
Shell GTL Fuels were tested and results showed that they can be used safely on the engines and buses made by Chinese OEMs without the need of modification and demonstrated in the public transport in Shanghai, Beijing and Tianjin. It reduced 70% of the smoke.
upstream deals with finding and producing oli and gas
ijiang oil field, South China Sea:
35 per cent of oil production of shell comes from two offshore Xijiang oil fields which is located 150 km south of Hong Kong in the South China Sea. Shell has got partnership with CNOOC and ConocoPhillips. In 2008 this joint venture produced 46,300 barrels/day
Coalbed Methane (CBM):
Shell (55%) is developing the North Shilou CBM block under a Product Sharing Contract (PSC) with China United Coalbed Methane Company (40%) and Verona (5%).Â The project is now in exploration phase.
Liquefied Natural Gas (LNG) :
After the Shell made two Sales and Purchase Agreements with Chinese partners in 2008, it remained to be the largest IOC LNG supplier to China and will deliver 5 mtpa of LNG per year for the next decade in addition to a project signed for aurtralia and Malaysia which supplies 1 mtpa per year.
CEO Peter Voser commented "Upstream, we have built up strong foundations in activities like gas-to-liquids (GTL), oil sands and liquefied natural gas (LNG). Looking out to 2020, I expect Shell's exploration to underpin new upstream growth, especially in North America and Australia, with additional barrels from development-led projects. Downstream, we are making substantial investments in new refining and petrochemicals capacity. Once these projects are on stream, I expect the downstream growth emphasis will switch to further strengthening our marketing for the next several years."
A business was formed in 1996 by Shell Exploration & Production Company and Shell Oil Products Company aiming to provide a wide range of integrated and customized services to the oil and natural gas producers in the Gulf of Mexico and Gulf Coast region. It is part of Shell Offshore Inc.
The Service include
Handling productions on shell-operated platforms and also helping in processing equipment.
Production Gathering & Transportation on Shell crude and gas pipelines.
Natural Gas Liquids Supply & Transportation including marketing and product movement on Shell's pipelines and tank cars.
Trading crude oil.
Jim Funk, president of Shell Midstream Enterprises says "For a number of years, various Shell groups have marketed a variety of services to Gulf of Mexico producers. Now, through Shell Midstream Enterprises, a producer can make one call for a full range of integrated or customized services," http://www.thefreelibrary.com/SHELL+FORMS+MIDSTREAM+BUSINESS-a018423057
Shell's role in exploration will help to ensure continued activity over coming decades.
Shell helps to maintain the ecological concern and reduces the issues by doing research into biofuels, solar power, wind power taking energy from hydrogen
Improvement in products such as fuel cards and credit cards is helping Shell to maintain a wider portfolio of products.
Shell is expert in making planning tools and meeting the strategy for future demands.
It gives much importance for reputation and maintains as ever.
Shell focuses much on oil and gas and thus it makes shell to search continually for replacement supplies and it is also a cost consuming process.
Shell uses procedures which are not environmentally acceptable as it uses flaring and burning gas from oil extracting sites.
Shell's problems with Nigeria have made this area politically volatile and there has been security problems for staff and this attacks on production.The company may thus be forced to withdraw by compromising its network of resources and threatening its ability to meet production obligations.
Shell is reported to be reviewing involvement with a windpower development near Blackpool which is raising questions regarding its obligation to alternative energy sources.
Shell has explored many new oil and gas reserves but still there is the potential to discover more.
Shell previously was not possible to move in areas which were rich in reserves but now it could easily move in.
Shell's showed a quick response for environmental problems and thus it leads to less antagonistic relationship with environmental group.
Shell develops in opening new markets by diversification into new products and alternative fuels.
Potential profit may be reduced due to volatile fuel prices which raises initially but drops significantly.
Due to the issue of Nigeria shell faces problems politically to hand over a site on the Niger Delta to local ownership.
Negative publicity created when tanker drivers working for Hoyer, suppliers of Shell, striked in 2008.
Due to decreased demand for fossil fuels the shell has faced the economic downturn.
Weather can have significant effects on production, with refineries particularly hit recently by Hurricane Ike.
Royal Dutch Shell competitors include:
by having a knowledge on competitors it is possible to qualify prospective partners and suppliers
- Keep fully up to date on your competitors' business structure, strategy and prospects
- Obtain the most up to date company information available
E-business provides easy and faster business. It uses automated sysytem for management.
Shell provides various tolls in ebusiness fro range of activities.
Telephone queueing: by telephone queueing they provide information on call regarding the services, products.
Shell e serve: by shell e serve online transactions can be carried over. The transaction remains to be simple to use and secure, orders can be placed any time day or night.
Shell router: shell provides shell router to large organisation which is the concept of electronic data interchange(EDI) to provide increased efficiency and accuracy in transactions. Thus time can be saved and procurement costs reduced.
Vendor managed inventory: VMI provides reduced procurement costs and ease in placing oders.this VMI is provided only to bulk fuel customers and they also help in focusing the inventory levels of storage tanks and maintains the stock level.
self service interactive voice response provides quick response over phone in ordering fuel, checking delivery and it also deals with account enquires..
Thus ebusiness provides better service from palcing oders to dealing with queries over phone. It palys a major role in saving time and it makes the process easy with transactions of purchasing and placing orders and therby provides a good customer care.
The knowlege management focused on existing initiatives known as shell EP global networks which included technical and business communities of practice using Sitescape software. This network has over 15000 members spending $300m per annum.
Knowledge management has always taken place in shell by arranging internal conferences, workshops and training programmes. But the systems and devices used were informal in nature. When measures were taken to be formal, the communications infrastructure to share knowledge was limited and couldn't cope with increasing volumes of information.
The knowledge sharing has always allowed people to share knowledge that are natural, which will help people to perform daily work effectively and to create solutions for existing problems.
The key challenges that we faced, as with many organisations, included:
Achieving the right balance between efforts spent embedding effective behaviours and developing appropriate IT solutions;
Justifying the effort spent on KM by trying to tie down the moving target of measured value;
Managing the increasing number of disparate, home-grown KM solutions popping up all over the organisation.
Due to knowledge management, old networks have been replaced into expanded ones. 'Old boys' networks have expanded into global communities of practice;
Central service teams have expanded which includes clusters of expertise globally - the EP Centres of Excellence;
Project teams based in different locations have developed into virtual teams with direct face to face.this reduces round the clock.
The knowledge management dealt with bringing two strategies to work people, tools and behaviours. Tools were more solution oriented and it was welcomed among IT seldom work. The behaviour was hard to understand and it could not be changed in work people.it was hard for people to change their behaviour and adapt the tools. Thus behaviour management remained to be failure.
Thus to balance tools and behaviour remained always challenging in knowledge management.
CUSTOMER RELATIONSHIP MANGEMENT:
Satisfying customers always remain challenging in any business. There was much demand from customers which should be satisfied . Satisfying customers should always be done which would be a strategy to stay successful among competitors. For shell to make it customer oriented it faced difficulties with solving the problems of the customers. Shell placed one stop shop were customers queries will be solved and thus providing care about relationship. Thus 80% of the problems were solved by this one stop shop. Apart from this experts were appointed outside the organization so that queries will be solved when ever created. This process may also be done over phone or seeing the person face to face and solving it.
Thus shell is able to provide good customer relation and thus it remains as a strategy for success among competitors.