Royal Dutch Shell : Overview

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Royal-Dutch/Shell Group

www.shell.com


Industry Areas: Oil and gas exploration and production, refining/marketing and supply of petroleum products, manufacturing and marketing of Chemicals.

Overview

The Royal-Dutch/Shell groups of companies is an Anglo-Dutch group, the holding companies who own the group being The Shell Transport and Trading Company PLC (UK) and Koninklijke Nederland (Royal Dutch Petroleum Company: Netherlands). These two holding companies own 40 per-cent and 60 per-cent respectively of the following 3 subsidiaries, which are themselves holding companies for further operating subsidiaries:

  • Shell Petroleum NV (Netherlands)
  • Shell Petroleum Company LTD (UK)
  • Shell Petroleum Inc. (USA)

The three companies and their operating subsidiaries are managed worldwide by Shell International. Operating subsidiaries are divided into the following divisions:

  • Exploration & Production
  • Oil products
  • Chemicals
  • Gas & Power

(Other small divisions include Coal, Hydrogen, Forestry and Renewables)

Over recent years Shell has successfully come to be seen as one of the more progressive companies within its sector. Since it withdrew from the Global Climate Coalition (lobby group) in 1998[1]. Shell has tried hard to brand itself as a caring, green company. Even before that, a concerted public relations campaign had followed the execution (in November 1995) of Nigerian writer and campaigner Ken Saro Wiwa[2]. Shell portrays itself as a good corporate citizen, but like all multinationals and all oil companies Royal-Dutch/Shell continues, behind the greenwash, with many of its old ways.

Market share/importance

The oil sector accounts for about 13.3 per cent of FTSE 100[3] in the UK Royal-Dutch/Shell is one of the largest players in this sector. As such, it is one of the barometer companies of the British economy. Shell's successes and failures are likely to be mirrored in the UK economy as a whole.

  • Shell's Crude oil production in 2000 stood at 2,274 thousand barrels per-day[4]
  • Shell's Natural gas production available for sale at 8,212 million standard-cubic-feet per-day[5]
  • Shell's oil product sales at 5,574 thousand barrels per-day[6]

For comparison:

  • BP's crude oil production in 2000 stood at 1,928 thousand barrels per-day,[7]
  • Gas production at 7,609 million cubic-feet per-day,[8]
  • Marketing sales at 3,756 thousand barrels per-day,[9]
  • Exxon-Mobil's liquids production in 2000 stood at 2,600 thousand barrels per-day [10]
  • Exxon-Mobil's natural gas production available for sale at 10,300 million cubic-feet per-day [11]
  • Exxon-Mobil's petroleum product sales at 8,000 thousand barrels per-day[12]

For a guide to the units used by the oil and gas industry try: www.nepo.go.th/ref/UNIT-OIL.html

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History

The 'Royal Dutch Company for the Exploitation of Petroleum Wells in the Netherlands East Indies' was registered in the Hague in 1890. The name was abbreviated in 1949 to Royal Dutch Petroleum Company[13].

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Shell was first registered in London in 1897 by the brothers Marcus and Sam Samuel as `The "Shell" Transport and Trading Company, Ltd.' (Now PLC: public limited company)[14].

The first Royal-Dutch/Shell joint operating company: the Asiatic Petroleum Company was established in 1903 and in 1907, Royal-Dutch and Shell merged all of their operations: 60% Royal-Dutch; 40% Shell. Despite merging their interests the companies remain separate: One can buy shares in Royal-Dutch or in Shell-Transport, but not in the Group as such[15].

In 1912, the Group founded the American Gasoline Company to sell gasoline along the Pacific Coast and Roxanna Petroleum to buy oil in Oklahoma[16]. US operations have grown so that in 2000, 34 per-cent of earnings from exploration and production and 4 per-cent of earnings from oil product sales were generated in the USA[17].

Shell's Chemical division has grown since 1928 when, Shell Development Company was established to identify chemical products which could be made from refinery by-product gases. One year later, Shell Chemical Company was chartered to manufacture these products[18].

In 1972 Shell pioneered CO2 injection, as an enhanced recovery technique,[19] a process it is now branding as a solution to climate change[20].

In 1995, the Shell Learning Centre was opened 40 minutes north of Houston. As Shell puts it the training school has been conceived to encourage "out-of-the-box free thinking."[21]

Also in 1995 a question mark was put over Shell's real commitment to free thinking when Nigerian writer Ken Saro Wiwa and eight other Ogoni were hanged, by the Nigerian authorities "for speaking out against the environmental damage to the Niger Delta caused by Shell Oil".[22]

Shell had already suffered a blow earlier in 1995 when in April, Greenpeace activists occupied the Brent Spar oil platform which had come to the end of is working life and was due to be dumped at sea[23].

The platform contained tonnes of toxic drilling muds, plus oil residues and radioactive waste. Shell's cosy relationship with the UK Department of Trade and Industry (DTI) ensured that it got approval for the dumping - indeed the DTI refused to accept written protests from Greenpeace. Shell said it had submitted an objective view from "independent" scientists but a number of reports are alleged to have been hidden or destroyed. One of these predicted that the Spar would break up on its way down to its intended resting place 150m below the surface, dispelling its waste into the water column[24].

After a three year campaign by Greenpeace the Brent Spar was, in November 1998, broken up and incorporated into a new ferry terminal in the harbour of Mekjarvik, Norway[25]. Since this decision, European countries surrounding the North Sea have invoked a moratorium on such dumping of platforms, avoiding a dangerous precedent for the misuse of our seas.

In March of 1997, Shell, Texaco and Saudi Aramco announced, a hugely significant joint venture that would combine their Eastern and Gulf Coast United States refining and marketing businesses[26].

From July 2000 Jeroen van der Veer replaced Maarten van den Bergh as president of Royal-Dutch[27] and in 2001 Phil Watts replaced Sir Mark Moody Stuart as chairman of the board of Shell transport and Trading[28].

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References

[1] www.worldwatch.org/chairman/issue/000725.html

[2] www.greenpeace.org/~comms/ken/murder.html

[3] www.business-line.com/business-weekly/archives/233/investor.html

[4] Results, 4th quarter and full year 2000, Royal Dutch/Shell group of companies www.Shell.com/investordata/downloads/134/q42000pdf3.pdf / (page 4)

[5] Results, 4th quarter and full year 2000, Royal Dutch/Shell group of companies www.Shell.com/investordata/downloads/134/q42000pdf3.pdf / (page 5)

[6] Results, 4th quarter and full year 2000, Royal Dutch/Shell group of companies www.Shell.com/investordata/downloads/134/q42000pdf3.pdf / (page 6)

[7] BP annual report 2000: www.bp.com/downloads/457/BP_RA_Complete.pdf

[8] BP annual report 2000: www.bp.com/downloads/457/BP_RA_Complete.pdf

[9] BP annual report 2000: www.bp.com/downloads/457/BP_RA_Complete.pdf

[10] ExxonMobil, summary annual report, 2000 (page 8)

[11] ExxonMobil, summary annual report, 2000 (page 8)

[12] ExxonMobil, summary annual report, 2000 (page 16)

[13] www.shell.com/royal-en/content/0,5028,25448-50918,00.html

[14] www.shell.com/royal-en/content/0,5028,25448-50918,00.html

[15] www.shell.com/royal-en/content/0,5028,25448-50918,00.html

[16] www.countonshell.com/welcome/history/history.html

[17] Financial and Operating Information, 1996-2000, Royal-Dutch/Shell group of companies, page 10

[18] www.countonshell.com/welcome/history/history_1912.html

[19] www.countonshell.com/welcome/history/history_1942.html

[20] The Ecologist, Climate Change Report, November 2001, page 27

[21] www.countonshell.com/welcome/history/history_1992.html

[22] www.greenpeace.org/~comms/ken/murder.html

[23] www.greenpeace.org/~comms/brent/diary.html

[24] www.corporatewatch.org.uk/publications/shell.html

[25] www.greenpeace.org/pressreleases/oceandumping/1998nov25.html

[26] www.countonshell.com/welcome/history/history_1992.html

[27] www.shell.com/royal-en/content/0,5028,25455-50931,00.html

[28] www.shell.com/royal-en/content/0,5028,25456-50912,00.html