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Evolution of Shell

Descent of Shell Logos

Shell stores in a historical timeline

Royal Dutch Shell

Founded 1907
Headquarters The Hague, Netherlands
Area served Worldwide
Key people Jorma Ollila (Chairman)
Peter Voser (CEO)
Industry Oil and gas
Products Petroleum, natural gas, and other petrochemicals
Revenue ▼ US$ 278.188 billion (2009)
Operating income ▼ US$ 19.597 billion (2009)
Profit ▼ US$ 12.518 billion (2009)
Total assets ▲ US$ 292.181 billion (2009)
Total equity ▲ US$ 136.431 billion (2009)
Employees 102,000 - March 2009
Subsidiaries Shell Oil Company
Shell Nigeria
Shell Canada
Website Shell.com

The Royal Dutch Shell Group was created in February 1907 when the Royal Dutch Petroleum Company (legal name in Dutch, N.V. Koninklijke Nederlandsche Petroleum Maatschappij) and the "Shell" Transport and Trading Company Ltd of the United Kingdom merged their operations[4] – a move largely driven by the need to compete globally with the then predominant US petroleum company, John D. Rockefeller's Standard Oil. The terms of the merger gave 60% of the new Group to the Dutch arm and 40% to the British.

Royal Dutch Petroleum Company was a Dutch company founded in 1890 by Jean Baptiste August Kessler,[4] along with Henri Deterding, when a Royal charter was granted by King William III of the Netherlands to a small oil exploration and production company known as "Royal Dutch Company for the Working of Petroleum Wells in the Dutch Indies" (now Indonesia)[5].

The "Shell" Transport and Trading Company (the quotation marks were part of the legal name) was a British company, founded in 1897 by Marcus Samuel and his brother Samuel Samuel.[4] Initially the Company commissioned eight oil tankers for the purposes of transporting oil.

Chart of the major energy companies dubbed "Big Oil" sorted by latest published revenueIn 1919, Shell took control of the Mexican Eagle Petroleum Company and in 1921 formed Shell-Mex Limited which marketed products under the "Shell" and "Eagle" brands in the United Kingdom. In 1932, partly in response to the difficult economic conditions of the times, Shell-Mex merged its UK marketing operations with those of British Petroleum to create Shell-Mex and BP Ltd,[6] a company that traded until the brands separated in 1975.

In November 2004, following a period of turmoil caused by the revelation that Shell had been overstating its oil reserves, it was announced that the Shell Group would move to a single capital structure, creating a new parent company to be named Royal Dutch Shell plc, with its principal listing on the London Stock Exchange and the Amsterdam Stock Exchange and its headquarters and tax residency in The Hague in the Netherlands. The unification was completed on 20 July 2005. Shares were issued at a 60/40 advantage for the shareholders of Royal Dutch in line with the original ownership of the Shell Group.[7]

In November 2007 Shell acquired a majority stake in some gas fields owned by Regal Petroleum in Ukraine.[8]

Name and brand

A Shell-sponsored Ferrari F60 Formula One motor racing carThe name Shell is linked to the Shell Transport and Trading Company.[9] In 1833, the founder's father, also Marcus Samuel, founded an import business to sell seashells to London collectors. When collecting seashell specimens in the Caspian Sea area in 1892, the younger Samuel realized there was potential in exporting lamp oil from the region and commissioned the world's first purpose-built oil tanker, the Murex (Latin for a type of snail shell), to enter this market; by 1907 the company had a fleet. Although for several decades the company had a refinery at Shell Haven on the Thames, there is no evidence of this having provided the name.

The Shell brand is one of the most familiar commercial symbols in the world. Known as the "pecten" after the sea shell Pecten maximus (the giant scallop), on which its design is based, the current version of the brand was designed by Raymond Loewy and introduced in 1971. The yellow and red colours used are thought to relate to the colours of the flag of Spain as Shell built early service stations in the state of California which had strong connections with Spain.[10]

The slash was removed from the name "Royal Dutch/Shell" in 2004, concurrent with moves to merge the two legally separate companies (Royal Dutch and Shell) to the single legal entity which exists today.[11]


The upstream provides two thirds of Shell's revenuesOne of the original Seven Sisters, Royal Dutch Shell is the world's largest private sector oil company by revenue, Europe's largest energy group and a major player in the petrochemical industry.

Core businesses
Shell has five core businesses: exploration and production (the "upstream"), gas and power, refining and marketing, chemicals (the "downstream"), and trading and shipping. The company operates in more than 140 countries.

Shell oil depot in Kowloon, Hong KongShell's primary business is the management of a vertically integrated oil company. The development of technical and commercial expertise in all the stages of this vertical integration from the initial search for oil (exploration) through its harvesting (production), transportation, refining and finally trading and marketing established the core competencies on which the company was founded. Similar competencies were required for natural gas, which has become one of the most important businesses in which Shell is involved, and which contributes a significant proportion of the company's profits.

While the vertically integrated business model provided significant economies of scale and barriers to entry, there has been much less interdependence recently between the businesses, and each business now seeks to be a self-supporting unit without subsidies from other parts of the company.

The petroleum and gas business is increasingly an assembly of independent and globally managed business segments, each of which must be profitable in its own right.

The downstream, which now also includes the chemicals business, generates a third of Shell's profits worldwide and is known its global network of more than 40,000 petrol stations and its 47 oil refineries.


A Shell oil refinery in Martinez, California
Shell tank truck in Reykjavík, IcelandOver the years Shell has occasionally sought to diversify away from its core oil, gas and chemicals businesses. These diversifications have included nuclear power (a short-lived and costly joint venture with Gulf Oil in the USA); coal (Shell Coal was for a time a significant player in mining and marketing); metals (Shell acquired the Dutch metals-mining company Billiton in 1970) and electricity generation (a joint venture with Bechtel called Intergen). None of these ventures were seen as successful and all have now been divested.

In the early 2000s Shell moved into alternative energy and there is now an embryonic "Renewables" business that has made investments in solar power, wind power, hydrogen, and forestry. The forestry business went the way of nuclear, coal, metals and electricity generation, and was disposed of in 2003. In 2006 Shell sold its entire solar business[12] and in 2008, the company withdrew from the London Array which is expected to become the world's largest offshore wind farm.[13]

Shell also is involved in large-scale hydrogen projects. HydrogenForecast.com describes Shell's approach thus far as consisting of "baby steps", but with an underlying message of "extreme optimism".[14]

On 4 August 2005, the board of directors announced the appointment of Jorma Ollila, then-Chairman and CEO of Nokia, to succeed Aad Jacobs as the company’s non-executive Chairman from 1 June 2006. Ollila is the first Shell Chairman to be neither Dutch nor British. Other non-executive directors include Maarten van den Bergh, Wim Kok, Nina Henderson, Lord Kerr, Adelbert van Roxe, and Christine Morin-Postel.

As of 1 July 2009, Peter Voser has served as CEO of Shell.[15] Peter, who is Swiss, is the first non-Dutch, non-British CEO of the company.

Corporate responsibility
This article or section may be slanted towards recent events. Please try to keep recent events in historical perspective. (June 2009)

Main articles: Controversies surrounding Royal Dutch Shell and Royal Dutch Shell environmental issues

Shell Research and Technology Centre, AmsterdamShell's compliance to corporate social responsibility also includes its UK and international Shell LiveWIRE programmes. This initiative has over 26 years experience of encouraging young people to start and develop their own businesses in the UK and 26 other countries in the world.[16]

Shell has been criticised for its businesses in Africa, notably in relation to protests of the Ogoni in 1995.[17]

In the 1990s, protesters criticized the company's environmental record, particularly the possible pollution caused by the proposed disposal of the Brent Spar platform into the North Sea. Shell reversed the decision under public pressure but maintained that sinking the platform would have been environmentally better.[18] Shell subsequently published an unequivocal commitment to sustainable development, supported by executive speeches reinforcing this commitment.[19]

Shell Oil (the U.S. subsidiary) was one of the first companies to leave the Global Climate Coalition, a lobby group which had opposed restrictions on greenhouse gases.[20][unreliable source?] Shell is also a founding member of the World Business Council for Sustainable Development, which Watts led as Chairman in 2002/2003.

Delivering the annual business lecture hosted by Greenpeace in 2005, Shell chairman Lord Oxburgh said that we must act now on global warming or face a "disaster", and encouraged governments to provide a regulatory framework to encourage the reduction of greenhouse gas emissions.[21]

Shell whistleblowers
Shell has set up a global internet-based facility for whistleblowers to report alleged violations of the law or the Shell general business principles, a voluntary code of ethics pledging transparency, integrity and honesty in all of Shell's business dealings.[22] The introduction at the global helpline website says "Reporting and addressing suspected violations of the law or the Shell General Business Principles (SGBP) is of critical importance in protecting our reputation and the value of the Shell brand." Whistleblowers are asked to provide identity details but anonymous reports are also accepted. The Global Helpline operated by Global Compliance, Inc. is available to "customers, suppliers, partners, advisers and employees of Shell".[23]

Corporate communications

Shell Centre building in London, UKShell's advertising regarding its renewable energy business has been described as a "greenwash" by some environmental lobbies,[24] but praised by other commentators.[25]

In August 2008, the British Advertising Standards Authority (ASA) ruled that Shell had misled the public in an advertisement, claiming that a $10 billion oil sands project in Alberta, Canada was a "sustainable energy source".[26]

Oil reserves
In 2004, a disclosure about the overstatement of oil reserves was seen as the most serious crisis encountered in the Group’s nearly 100 years of history. A class action lawsuit was settled for $450 million, with Grant & Eisenhofer P.A. representing the class. The Economist asked in an article dated 11 March 2004 whether Shell could be seen as "another Enron", but answered its own question with "importantly, Shell's shifting of reserves (from “proven” to “probable”) simply cannot be compared with the phantom profits and bogus assets booked by Enron. That is because the oil and gas actually still exists, and Shell still owns them as real, usable assets".[27] The crisis led to the dismissal of the chairman of the Committee of Managing Directors Philip Watts, and prompted a major reorganisation of the Group.

Health, safety, and other issues
Main article: Royal Dutch Shell safety concerns
A number of incidents over the years led to criticism of Shell's health and safety record, including repeated warnings by the UK Health and Safety Executive about the poor state of the company's North Sea platforms.

Problems have also occurred with the Sakhalin-II project in Russia and the controvesial Corrib Gas Field development in Ireland. Shell's social investment initiative the Shell Foundation has also run into some controversy. In 2007 Friends of the Earth alleged that the damage caused by Shell's oil activities to local communities and the wider environment could be assessed at $20 billion.[28] Accusations have also flown about the conduct of Shell in Nigeria.[29]

Canadian oil sands
Shell are one of numerous firms who are extracting oil from Canadian oil sands[30][31], a process that produces four times as much CO2 as conventional drilling, as well as having a devastating effect on the local environment and communities[32]. The Cree aboriginal group describe BP as being complicit in 'the biggest environmental crime on the planet' [33].

Human rights concerns
In the beginning of 1996, several human rights groups brought cases to hold Shell accountable for alleged human rights violations in Nigeria, including summary execution, crimes against humanity, torture, inhumane treatment and arbitrary arrest and detention. In particular, Shell stood accused of ­collaborating in the execution Ken Saro-Wiwa and eight other leaders of the Ogoni tribe of southern Nigeria, who were hanged in 1995 by Nigeria's then military rulers [34]. After the execution, Mr. Saro-Wiwa's body was burned with acid and thrown in an unmarked grave [35]. The lawsuits were brought against Royal Dutch Shell and Brian Anderson, the head of its Nigerian operation [36]. In 2009, Shell agreed to pay $15.5m in a legal settlement [34]. Shell has not accepted any liability over the allegations against it [37].

Corporate governance

Shell service station in Hiroshima, JapanTraditionally, Shell was a heavily decentralised business worldwide (especially in the downstream) with companies in over 100 countries, each of which operated with a high degree of independence. The upstream tended to be far more centralised with much of the technical and financial direction coming from the central offices in The Hague. Nevertheless. there were very large "exploration and production" companies in a small number of major oil and gas production centres such as the United Kingdom (Shell Expro, a Joint Venture with Exxon), Nigeria, Brunei, and Oman.

The downstream business, which in some countries also included oil refining, generally included a retail petrol station network, lubricants manufacture and marketing, industrial fuel and lubricants sales and a host of other product/market sectors such as LPG and bitumen. The practice in Shell was that these businesses were essentially local and that they were best managed by local "operating companies" – often with middle and senior management reinforced by expatriates. In the 1990s, this paradigm began to change, and the independence of operating companies around the world was gradually reduced. Today, virtually all of Shell’s operations in various businesses are much more directly managed from London and The Hague. The autonomy of “operating companies” has been largely removed, as more "global businesses" have been created.

North America

Service station near Lost Hills, CaliforniaThrough most of Shell's history, its business in the United States, Shell Oil Company was substantially independent with its stock ("Shell Oil") being traded on the NYSE and with little direct involvement from the group’s central offices in the running of the American business. Such practice also changed in the 1990s when Shell first bought out the shares in Shell Oil that it did not own and then took a more hands-on approach. In Canada, also previously very independent, Shell has completed its purchase of the shares in Shell Canada that it did not own, to apply the new global business model.

Service station in Jamaica
Shell petrol station in Wagga Wagga, New South Wales.Australia
Main article: Shell Australia
In Australia, retailer Coles Group (now part of Wesfarmers) purchased the rights to the retail business from the existing Shell Australia multi-site franchisees in 2003 for an amount less than A$100 million. The purchase was made in response to a popular discount fuel offer by rival Woolworths Limited launched some years earlier.

Coles Express' only affiliation with Shell is that Shell is the exclusive supplier of fuel and lubricant products, leases the service station property to Coles, and maintains the presence of the "pecten" and other Shell branding on the price board and other signage. Coles Express sets fuel and shop prices and runs the business, provides convenience and grocery merchandise through its supply chain and distribution network, and directly employs the service station staff.

Norway, Sweden, Finland and Denmark
On 27 August 2007, Royal Dutch Shell and Reitan Group, the owner of the 7-Eleven brand in Scandinavia, announced an agreement to rebrand some 269 service stations across Norway, Sweden Finland and Denmark, subject to obtaining regulatory approvals under the different competition laws in each country.[38]

Shell first started trading in Ireland in 1902.[39] Shell E&P Ireland (SEPIL) (previously Enterprise Energy Ireland) is an Irish exploration and production subsidiary of Royal Dutch Shell. Its headquarters are on Leeson Street in Dublin. It was acquired in May 2002.[40] Its main project is the Corrib gas project, a large gas field off the northwest coast, for which Shell has encountered controversy and protests in relation to the onshore pipeline and licence terms.

In 2005 Shell disposed of its entire retail and commercial fuels business in Ireland to Topaz Energy Group. This included depots, company-owned petrol stations and supply agreements stations throughout the island of Ireland.[41] The retail outlets were rebranded to Topaz in 2008/9.[42]

Shell V-Power
Ken Saro-Wiwa
Algae fuel
Shell Guides, a series of guidebooks
^ "Global 500: #1 Royal Dutch Shell". Fortune. 2009. http://money.cnn.com/magazines/fortune/global500/2009/snapshots/6388.html. Retrieved 2009-07-08.
^ "The Global 2000". Forbes. 2009. http://www.forbes.com/lists/2009/18/global-09_The-Global-2000_Rank.html.
^ "Investor Centre - Investor contacts". Shell International B.V.. 2007-06-27. http://www.shell.com/home/content2/investor-en/contact.html. Retrieved 2007-08-30.
^ a b c Royal Dutch Shell: History
^ "History of Shell in Indonesia". PT Shell Indonesia. http://www.shell.com/home/content2/id-en/about_shell/who_we_are/history_of_shell_indonesia_0905.html. Retrieved 25 Nov 2008.
^ Reference and contact details: GB 1566 SMBP Title:Shell-Mex and BP Archive Dates of Creation: 1900-1975 Held at: BP Archive GB 1566 SMBP
^ Shell shareholders agree merger BBC News, 2005
^ Shell buys stake in Regal gas fields
^ "About Shell - The history of the Shell logo". About Shell. Shell International B.V.. 2007-06-15. http://www.shell.com/home/content/aboutshell-en/who_we_are/our_history/history_of_pecten/history_of_the_pecten_23112006.html. Retrieved 2007-08-30.
^ Business Superbrands, Editor: Marcel Knobil, Author James Curtis (2000), Superbrands Ltd. ISBN 0-9528153-4-6, p. 93.
^ Royal Dutch Shell Group .com
^ "SolarWorld Acquires Shell's Solar Business". RenewableEnergyWorld.com. 2006-02-02. http://www.renewableenergyworld.com/rea/news/story?id=42840. Retrieved 2008-08-18.
^ Shell pulls out of key wind power project, Financial Times, 01 May 2008
^ Stanley, Dean. "Shell Takes Flexible Approach to Fueling the Future". Executive View. Corland Publishing. http://www.hydrogenforecast.com/ArticleDetails.php?articleID=250. Retrieved 2007-08-30.
^ Shell press release
^ "What is Shell LiveWIRE?". Shell LiveWIRE. http://www.shell-livewire.com/new/whatis/. Retrieved 2007-08-30.
^ The My Hero Project - Ken Saro Wiwa
^ Brent Spar's long saga BBC News, 1998
^ Ek Kia, Tan (2005-04-19) (PDF), Sustainable Development in Shell, http://www.shellchemicals.com/chemicals/pdf/speeches/sydney_speech_april_2005.pdf, retrieved 2007-08-30
^ ExxonSecrets Factsheet: Global Climate Coalition
^ Shah, Saeed (2005-01-26). "Shell boss warns of global warming 'disaster'". Independent Newspapers UK Limited. http://findarticles.com/p/articles/mi_qn4158/is_20050126/ai_n9693285. Retrieved 2007-08-30.
^ "Environment and Society - Shell General Business Principles". Environment and Society. Shell International B.V.. 2007-05-05. http://www.shell.com/home/Framework?siteId=envirosoc-en&FC2=&FC3=/envirosoc-en/html/iwgen/making_it_happen/our_commitments_and_standards/shell_general_business_principles/%20sgbp_13042007.html. Retrieved 2007-08-30.
^ Shell
^ Bruno, Kenny (2002-01-24). "Greenwash Award to Shell for Clouding the Issue". Campaigns. CorpWatch. http://www.corpwatch.org/article.php?id=1348#gwaward. Retrieved 2007-08-30.
^ Gelbspan, Ross. "A modest proposal to stop global warming". Energy Features. Sierra Club. http://www.sierraclub.org/sierra/200105/globalwarm.asp. Retrieved 2007-08-30.
^ Guardian story, Aug. 13, 2008
^ Macalister, Terry (2007-01-31). "Campaigners urge Shell to put profits into clean-up". Business (Guardian News and Media Limited). http://business.guardian.co.uk/story/0,,2002276,00.html. Retrieved 2007-08-30.
^ Curse of the Black Gold
^ [http://news.bbc.co.uk/2/hi/business/4751357.stm Shell in Canadian oil sands deal ]
^ Shell wants to produce five times more oil from tar sands
^ The tactics of these rogue climate elements must not succeed
^ Cree aboriginal group to join London climate camp protest over tar sands
^ a b Shell pays out $15.5m over Saro-Wiwa killing
^ Saro-Wiwa
^ [1]
^ Shell settles Nigeria deaths case
^ Shell International B.V. (2007-08-27). "7-Eleven and Shell join forces at 269 petrol stations". Press release. http://www.shell.com/home/content/media-en/news_and_library/press_releases/2007/shell_scandinavia_08271054.html. Retrieved 2007-08-30.
^ Bppk “Down Many a Road”, the story of Shell in Ireland from 1902 to 200 - Bob Montgomery Dreolín Publications 2002 ISBN 1-902773-11-X
^ http://www.shell.com/home/content/ie-en/about_shell/shell_businesses/ep/corrib/about/history/key_dates.html
^ http://www.tribune.ie/archive/article/2005/dec/25/making-a-big-deal-the-movers-and-shakers-in-irish-/
^ http://www.google.ie/#q=topaz++shell+rebrand&hl=en&cr=countryIE&tbo=1&site=mbd&tbs=cdr%3A1%2Ccd_min%3A%2Ccd_max%3A&fp=edf5a3ca685acfec

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