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Faculty of Business Administration 2
Internationale Betriebswirtschaft – Interkulturelle Studien
Business cases
PROJECT RE...
Contents
CHAPTER 1 INTRODUCTION .............................................................................................
CONCLUSION ..................................................................................................................
1
CHAPTER 1 INTRODUCTION
Everybody has heard of the oil company Shell. Shell is a global company of
energy and petrochemic...
2
chain and the 3 year strategy Shell uses. The strategy of Shell is like a pyramid
and we filter the important part so we...
3
Also, the bargaining power of buyer comes from the buyer volume, consider the
case of taxi drivers, the association of t...
4
2.1.5 The intensity of competitive rivalry
The oil industry not only has high entry barrier but also high exit barrier. ...
5
- Shell companies insist on honesty, integrity and fairness in all aspects of
business
- Shell companies find ways to re...
6
Shell utilizes its strengths such as geographic knowledge and advantages in
technology in order to reduce the cost of ex...
7
Kuala Lumpur mainly provide services to Shell’s business in Asian region, having
a cost-saving structure globally
3.5 Fi...
8
making, such as governing the way that Shell develops new projects and run
facilities and managing their supply chains.
...
9
energy technologies for the future. For example, in 2010 Shell pledged $25 million
to support a five-year research partn...
10
4.2 The Shell Group structure from 1960s until 1995
The Group consists of numerous joint ventures internationally. The ...
11
In the late 1950s, the establishment of the Committee of Managing Directors to set
direction for the corporation constr...
12
4.2.3 The Matrix structure (see appendix 8)
In this Matrix structure, operations of opcos were coordinated by service
c...
13
4.3 From 1996-2004. The restructuring.
4.3.1 Purpose
In the 1990s, the 3 dimension structure came to reveal its drawbac...
14
counsel in legal issues, e.g.: Intellectual properties, taxations; or the reputation of
the Group, communication intern...
15
4.3.4 Structure Observation
(see appendix 11)
This period, further attempts were made to enhance integration between op...
16
4.4.3 Structure Observation
The main feature of Shell structuring strategy from 2005 (and even also from
1996) until no...
17
CHAPTER 6 IMPLANTATION SHELL OPERATIONS
To analyse the operation level and the translation of the upper strategies into...
18
and implements the policies, processes and practices that achieve the Shell core
objectives.
Shell is using a framework...
19
Shell’s Downstream organization is made up of a number of businesses.
Collectively these turn crude oil into a range of...
20
dollars in their oil products chemical businesses. Shell is investing in big projects
in several countries and reduces ...
21
CONCLUSION
To conclude, Shell comes from the position of a big corporation, and still is a giant.
It can be described a...
22
REFERENCE
Books
 8. David, R.D., (2011), Strategic Management: Concepts. Boston: Prentice
Hall
 12. Henry, A., (2011)...
23
 6. Purposes
http://www.shell.com/home/content/aboutshell/who_we_are/our_purpose/
 7. Values
http://www.shell.com/hom...
24
nking/technical_centres/overview/
 32. Unification of Royal Dutch and Shell Transport
http://www.unification.shell.com...
25
http://vorige.nrc.nl/economie/article2556819.ece/Shell_keert_terug_in_centr
um_Rotterdam
 29. & 31. Global Value Chain...
26
APPENDIX
A) SWOT analysis
Strengths
 Shell’s current investments in
exploration will help ensure
continued activity ov...
27
 New oil and gas reserves are still
being found, and there is the
potential to discover more.
 Shell has been able to...
28
Source: Stabell, C. (2001) New Models for Value Creation and Competitive
Advantage in the Petroleum Industry. Norwegian...
29
Source:
http://www.investorshandbook.shell.com/2010/upstream/exploration/acreagead
ditions.html?cat=i
5) Figure showing...
30
http://www-
static.shell.com/static/investor/downloads/financial_information/quarterly_results/2
009/q4/q4_2009_analyst...
31
Souce: page 122. Grant
M.Robert. Cases to Accompany Contemporary Strategy Analysis. Case seven:
Organizational Restruct...
32
Source: page 138 Grant M.Robert. Cases to Accompany Contemporary
Strategy Analysis. Case seven: Organizational Restruct...
33
Source: Oil and Gas Financial Journal. New Partnership rules shake up shale
deals: Price volatility fosters changing bu...
34
Source: http://www.duke.edu/web/soc142/team9/GVC.html (accessed on
16 December 2011)
15) Figure showing Shell’s trading...
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SHELL PROJECT

  1. 1. Faculty of Business Administration 2 Internationale Betriebswirtschaft – Interkulturelle Studien Business cases PROJECT REPORT Submitted to Prof. Dr. Michael Erner By: Nguyen Viet Hoa (178121) Parker Chan (178100) Robin van Oosten (178161) Tran Quynh Huong (178258) International strategy analysis of Shell
  2. 2. Contents CHAPTER 1 INTRODUCTION ...........................................................................................................1 CHAPTER 2 ANALYSIS.....................................................................................................................2 2.1 Five Forces of Porter........................................................................................................2 2.1.1 Bargaining power of suppliers ..................................................................................2 2.1.2 Bargaining power of buyers ......................................................................................2 2.1.3 The threat of substitute products or services ..........................................................3 2.1.5 The intensity of competitive rivalry...........................................................................4 2.1.6 The value system of petroleum industry......................................................................4 2.2 SWOT ................................................................................................................................4 CHAPTER 3 THE OBJECTIVES OF THE SHELL GROUP ........................................................................4 3.1 Core values .......................................................................................................................4 3.2 Shell’s Strategic Aspects..................................................................................................5 3.3. Portfolio Management (PM) Strategies..........................................................................5 3.4 Operational Efficiency Strategies (see appendix 5).......................................................6 3.6 Sustainability strategies....................................................................................................7 CHAPTER 4 SHELL INTERNATIONAL STRATEGY – A REFLECTION FROM RESTRUCTURINGS THROUGHOUT HISTORY.................................................................................................................9 4.1 The Shell Group from the start prior to 1960s................................................................9 4.2 The Shell Group structure from 1960s until 1995 ........................................................10 4.2.1 Governance structure (Goverstruc)........................................................................10 4.2.2 Management structure (Manastruc).......................................................................10 4.2.3 Structure Observation..............................................................................................12 4.3 From 1996-2004. The restructuring. 4.3.1 Purpose....................................................13 4.3.2 New manastruc........................................................................................................13 4.3.4 Structure Observation..............................................................................................15 4.4 From 2005 until now. ......................................................................................................15 4.4.1 Unification.................................................................................................................15 4.4.2 Further streamlining effort.......................................................................................15 4.4.3 Structure Observation..............................................................................................16 CHAPTER 6 IMPLANTATION SHELL OPERATIONS ..........................................................................17 6.1 Functions and activities of Shell’s headquarter............................................................17 6.2 Upstream .........................................................................................................................18 6.3 Down Stream...................................................................................................................18
  3. 3. CONCLUSION ...............................................................................................................................21 REFERENCE ..................................................................................................................................22 APPENDIX ....................................................................................................................................26
  4. 4. 1 CHAPTER 1 INTRODUCTION Everybody has heard of the oil company Shell. Shell is a global company of energy and petrochemical. The aim of Shell is to meet the energy needs of society, in ways that are economically, socially and environmentally viable, now and in the future. 1 The Royal Dutch Shell is a British/Dutch company with its head quarter in The Hague, The Netherlands and is founded by Marcus Samuel more than 100 years ago. Shell is one of the 6 biggest oil companies in the world and takes the fifth position in the largest companies in the world.23 At Shell there work around 93.000 in more than 90 counties. 4 This makes the company interesting for the international strategy analysis what is the aim of this paper. For analyzing the international strategy first will be looked at the company analysis, here in we discuss briefly the internal situation of Shell through the 5 forces of Porter and the SWOT analysis. Secondly there will be looked at the structure of the company what is the aim of going global, and where is Shell at this moment according to the Bartlett and EPRG model The first part to analyze the international strategy is the company analysis. In this report we discuss briefly the overview of Shell. The analysis deals with aspects that make shell an international company. As third the strategy will be analyzed here the main point of focus is the strategy Shell uses at the moment. What makes Shell an international company and how do they cooperate in different countries. Also there will be looked at the value 1 http://www.shell.com/home/content/aboutshell/who_we_are/ 2 http://www.shell.nl/home/content/nld/aboutshell/who_we_are/history/ 3 http://www.shell.nl/home/content/nld/aboutshell/who_we_are/locations/ 4 http://www.shell.com/home/content/aboutshell/who_we_are/shell_worldwide/
  5. 5. 2 chain and the 3 year strategy Shell uses. The strategy of Shell is like a pyramid and we filter the important part so we have as a result the international aspects. The story of an international company….. CHAPTER 2 ANALYSIS In this Chapter there will be looked at the internal situation of Shell. Through the five forces of Porter and a SWOT analysis the internal situation will be clarified. 2.1 Five Forces of Porter Shell through its innovation in tankers for shipment of petroleum products. Their move upstream into exploration and production was designed to secure supplies and effective operation of refineries. Suppliers: suppliers of both equipment and services (rigs, pipeline, refining, etc) Buyers: consumers (individuals & companies) (see figure 1) 2.1.1 Bargaining power of suppliers While there are plenty of oil companies in the world, much of the oil and gas business is dominated by a small handful of powerful companies. The large amounts of capital investment tend to weed out a lot of the suppliers of rigs, pipeline, refining, etc. There isn't a lot of cut-throat competition between suppliers. Even the suppliers’ products are important input to the oil companies, the oil companies still have significant power over smaller drilling and support companies. 2.1.2 Bargaining power of buyers Oil is a standardized commodity therefore customers have opportunities to choose from various oil companies based on the prices and contract terms. As a result customers are believed to have power in this particular circumstance. The sales of oil and gasoline have also been affected by the “green” trend – more and more people have been aware of environment matters. “Hybrid” cars are one example of many ongoing trends.
  6. 6. 3 Also, the bargaining power of buyer comes from the buyer volume, consider the case of taxi drivers, the association of taxi drivers usually have discounts due a large group of customers of a oil company. 2.1.3 The threat of substitute products or services Price of renewable energy technologies such as solar, wind energy, biomass are declining in price for three main reasons: First, once the renewable infrastructure is built, the fuel is free. Unlike carbon- based fuels, the wind, the sun and the earth itself provide free-of-charge fuel in amounts that are effectively limitless. Second, while fossil fuel technologies are more mature, renewable energy technologies are being rapidly improved. So innovation and ingenuity give us the ability to constantly increase the efficiency of renewable energy and continually reduce its cost. Third, once the world makes a clear commitment to shifting toward renewable energy, the volume of production will itself sharply reduce the cost of each windmill and each solar panel, while adding more incentives for additional research and development to further speed up the innovation process. Ethanol: Corn and other organic materials, including agricultural waste, can be converted into ethanol through the use of engineered bacteria and super enzymes manufactured by biotechnology firms. Besides the innovative sources of power mentioned above, sources such as nuclear power and hydroelectric power are also regarded as threat of substitutes to oil industry. 5 2.1.4 The threat of the entry of new competitors Oil industry might be not very attractive to newcomers due to the large amount of investment, requirement of specific high technology as well as difficulty in oil exploration. 5 http://www.investopedia.com/features/industryhandbook/oil_services.asp
  7. 7. 4 2.1.5 The intensity of competitive rivalry The oil industry not only has high entry barrier but also high exit barrier. It might be resulted from a matter of fact that oil companies have to invest a large amount before they can get return. The companies themselves also have a concern of limited availability of reserves. 2.1.6 The value system of petroleum industry See appendix 2 Figure 2 shows the value system for the industry that serves end-users of petroleum products. The value system model only considers the actors directly involved in the discovery, development, production and distribution of petroleum products. Historically firms (the Majors) that were vertically integrated over the whole petroleum value system dominated the petroleum industry. The integrated petroleum firm has a manufacturing (chain) logic. The implication is that we need to start with a clear understanding of not only the industry boundary, but also of what kind of industry we are dealing with. This requires an initial formulation of the firm’s value configuration. 2.2 SWOT See appendix A CHAPTER 3 THE OBJECTIVES OF THE SHELL GROUP6 Shell is a global group of energy and petrochemical companies with around 93,000 people in more than 90 countries and territories. The aim is to meet the energy needs of society, in ways that are economically, socially and environmentally viable, now and in the future. 3.1 Core values7 - long-term profitability is essential to achieving business goals and to continued growth 6 http://www.shell.com/home/content/aboutshell/who_we_are/our_purpose/ 7 http://www.shell.com/home/content/aboutshell/who_we_are/our_values/
  8. 8. 5 - Shell companies insist on honesty, integrity and fairness in all aspects of business - Shell companies find ways to reduce the global environmental impact of operations, products and services. - Shell companies recognize that regular dialogue and engagement with stakeholders is essential. - Shell companies comply with all applicable laws and regulations of the countries in which operate When it comes to Shell’s objectives and values, it is easy to know that Shell is a global company. As oil and gas are crucial to people around the world, creating a global energy needs for economic development, therefore, Shell bases on its purposes and values to develop global to meet this world energy demand, which will be elaborate more in the latter parts. 3.2 Shell’s Strategic Aspects According to the David, strategy is defined as “an overall long-term policy for a firm that coordinates the business functions to achieve business goals”.8 As Shell is facing different kind of challenges in the energy industry, explained in the analysis part, we deducted Shell has followed four strategic aspects in order to reinforce their leadership in the oil and gas industry. They are: Portfolio Management, Operational Efficiency, Financial Management and Sustainability-of which the first three are core operating strategies.9 3.3. Portfolio Management (PM) Strategies Shell’s attempt to balance its portfolio has partly demonstrated by upstream capital investment’s distribution. The projects in 2011-2014 have geographically diversified more than in 2007-2010. In particular, the percentage of investment accounted by projects conducted in America has a tendency to reduce in the near future. In contrast, Asia-Pacific is likely to account more in Shell’s projects options from 2011 till 2014.10 (see appendix 3) 8 David, R.D., (2011), Strategic Management: Concepts. Boston: Prentice Hall 9 Singh, A. (2010) Strategies for oil and gas companies to remain competitive in the coming decades of energy challenges. Massachusetts Institute of technology. 10 http://www.investorshandbook.shell.com/2010/summaryreview/ourstrategy/next- generationprojectoptions.html?cat=m
  9. 9. 6 Shell utilizes its strengths such as geographic knowledge and advantages in technology in order to reduce the cost of exploration. In 2010, Shell invested approximately $ 3.0 billion in exploration and the cost reduced down to $2 per barrel. Shell took part in 403 successful wells drilled outside proved fields during 2010. Also in this year, Shell gained the exploration right in many countries such as Canada, China, Italy, and Russia with the total area of 53 thousands km2 . 11 (see appendix 4) 3.4 Operational Efficiency Strategies (see appendix 5) Operational Efficiency strategies refer to cost minimizations in order to deliver quality products and services to customers.12 Shell has adopted measures to improve its profit margin through operational efficiency strategies. Referring to the figure, in 2009, Shell had a top down reorganization from five structures to mainly three structures.13 The organizational structure of shell has simplified its structure by regions. For instance, the upstream division has been divided into “upstream international” and upstream Americas” in order to have a simpler hierarchical structure. Moreover, improving efficiency is a system wide effort. Shell has established Shell Business Service Centers (SBSC) to improve overall operational efficiency.14 The SBSC is a chain of six shared service centers: Cape Town; Chennai; Glasgow; Krakow; Kuala Lumpur; Manila. They offer centralized finance, human resource, IT and other business services to Shell companies globally. And each SBSC has its own primary focus to support global Shell businesses. For instance, the SBSC in 11 http://www.investorshandbook.shell.com/2010/upstream/exploration/acreageadditions.html?cat=i 12 Henry, A., (2011), Understanding Strategic Management. Oxford: New York: Oxford University Press 13 http://www.shell.com/home/content/media/news_and_media_releases/archive/2009/new_management_ structure_27052009.html 14 http://www.shell.com/home/content/careers/business_service_people/
  10. 10. 7 Kuala Lumpur mainly provide services to Shell’s business in Asian region, having a cost-saving structure globally 3.5 Financial Management Strategies In addition to the operational efficiency strategies, Shell has applied financial management strategies as well. They include maintaining financial flexibility and growing the business with a healthy balance sheet.15 According to Shell’s current 3-year strategies, 16 cost reduction and operating efficiency are a key part of Shell’s business. Regulatory and political uncertainties, explained in the analysis, has made the industry become more volatile, Shell decided to sell non-core businesses to enhance capital efficiency and launched programmes to streamline the global downstream organization, which can generate surplus cash flows for shareholders through this volatile environment. Also, the Shell has continued to develop its business to acquire more potential resources through joint venture. By participating in a number of strategic joint ventures, Shell can open up new market opportunities and access to local market knowledge. And in 2010, Shell has continued their long-history partnership with three National Oil Companies, in China, Qatar and Saudi Arabia, covering new natural gas potential. 17 3.6 Sustainability strategies Nowadays, sustainability strategies for oil and gas companies become more important, which are more driven by regulations, political and social pressures rather than business needs.18 As mentioned in the Shell’s purpose, which is to help meet the energy needs of society in ways that are economically, environmentally and socially responsible, Shell’s re-structuring in 2009 has strengthened this approach by taking sustainable development into their decision 15 Rice, J.L., (2010), Strategic Management: A Dynamic Perspective: Concepts and Cases. Pearson Australia 16 http://www.shell.com/home/content/aboutshell/our_strategy/ 17 http://www-static.shell.com/static/media/downloads/speeches/brinded_london_30102007.pdf 18 Wheelen, T. L., (2010), Concepts in Strategic Management and Business Policy: Achieving Sustainability. Upper Saddle River, N.J.: Prentice Hall
  11. 11. 8 making, such as governing the way that Shell develops new projects and run facilities and managing their supply chains. Shell has focused on three ways - performance in the near term; growth in the medium term; and projects for the longer term - to deliver energy to customers in a responsible way.19 First, for the performance in the near term, Shell has continuing to improve operations performance sustainably for the workers. For instance, as Shell has operations all over the world, Shell supports the UN Global Compact, a framework for businesses to align operations and strategies with ten universally accepted principles in the areas of human rights, labor, the environment and anti- corruption.20 Second, for the growth in the medium term, Shell has developing more ways to increase the production of environmental-friendly energy. Shell has increased the production of cleaner-burning natural gas, investing in biofuels in Brazil and strengthening the relations with communities, customers, governments and non- governmental organizations (NGOs), whom have an important role in a sustainable energy system.21 Lastly, for the projects for the longer term, Shell’s research and development (R&D) program contributed a lot. Shell has established Shell Technology Center in three countries: the USA, the Netherlands and India, and with other centers placed in key market areas close to their resources where they provide support and assistance to regional operations.22 The functions of these centers are to innovate and develop new technologies and improve existing ones. And each center shares knowledge among them to all Shell’s business operations. Plus, Shell has partnerships with scientific institutes and other companies to develop sustainable 19 http://sustainabilityreport.shell.com/2010/operatingresponsibly/ourbusinessstrategy.html?cat=m 20 http://sustainabilityreport.shell.com/2010/servicepages/search.php?q=UN+Global+Compact&pageID=3865 9&cat=b 21 http://www.shell.com/home/content/environment_society/environment/climate_change/biofuels_alterna tive_energies_transport/biofuels/biofuels_sustainability/ 22 http://www.shell.com/home/content/globalsolutions/innovation/innovative_thinking/technical_centres/o verview/
  12. 12. 9 energy technologies for the future. For example, in 2010 Shell pledged $25 million to support a five-year research partnership with Massachusetts Institute of Technology.23 CHAPTER 4 SHELL INTERNATIONAL STRATEGY – A REFLECTION FROM RESTRUCTURINGS THROUGHOUT HISTORY 4.1 The Shell Group from the start prior to 1960s (see appendix 6) The Group started by transporting oil from the Far East to Europe. Thereby, can this conclusion be made: The Group was initially instilled the management philosophy of international strategy – the one in Barlett/Ghoshall model. As a part of the joint-venture with domestic companies which owned the oil-field, the Group merely helped facilitating the export process from where the oil was produced to where it was demanded. At the beginning, the market was basically a small numbers of countries; organization of the group was simple – headquarter dictated the whole business: from production tankers, delivery, oil-field exploration. The Group, therefore, was first at the international strategy phase. Along the century until 1960s The Group expanded by joint-ventures with businesses in many countries in different continent. Until late 1950s and 1960s, The Group had opened numerous operating companies of which operation was independent and highly-responsive to the local market. The Group philosophy on international management had shifted to the multidomestic strategy. That strategy, meanwhile, had the weakness of lacking coordination and hierachial controlling power. That explained the birth of matrix structure which is discussed in more detail in the next part. In short, it is legitimate to say that Shell from the beginning until early 1960s (before the arrival of matrix structure) had advanced it international management strategy, according to Barlett/Ghoshal model, from international strategy to multidomestic strategy. 23 http://www.shell.com/home/content/media/news_and_media_releases/archive/2008/biofuels_research_ agreements_17092008.html
  13. 13. 10 4.2 The Shell Group structure from 1960s until 1995 The Group consists of numerous joint ventures internationally. The structure of Shell may be seen from two point of views: governance responsibilities (formal structure) and executive responsibilities. In regard of governance responsibilities, the structure of the Group is the links of ownership and control between companies that made up the Group. In regard of executive responsibilities, the structure is viewed from a management standpoint, which included the daily functions, is complex and not highly consistent to the formal structure. 4.2.1 Governance structure (Goverstruc) The Group is a highly-decentralized corporation. (see appendix 7) The Royal Dutch/Shell Group of companies was categorized into 4 types of company. The first type was the parent companies which were Royal Dutch Petroleum Company of the Netherlands (owned 60 percent of the shares) and the Shell Transport and Trading company plc of the UK (owned 40 percent of the shares). The group holding companies constituted the second type , under the parents companies. This type comprised of 3 companies: Shell Petroleum NV of the Netherlands, the Shell Petroleum Company Ltd of the UK, and the Shell Petroleum Inc (USA). The service companies were in the third level of the hierarchy. Their shares were held by the two group holding companies: Shell Petroleum N.V (Neth) and Shell Petroleum Co.Ltd (UK). Lastly, the operating companies included more than 200 companies in over 130 countries which received advice, supporting services from the Services Companies. The shares of operating companies were also possessed by group holding companies. 24 4.2.2 Management structure (Manastruc) 4.2.2.1 Key players The Manastruc of The Group in this period had 4 type of key players: Committee of Managing Directors (CMD), Operating Companies (opcos), Service companies. CMD 24 http://www.blackwellpublishing.com/grant/docs/07Shell.pdf
  14. 14. 11 In the late 1950s, the establishment of the Committee of Managing Directors to set direction for the corporation constructed the Group’s top management team, consisting of 5 Managing Directors. There of these were members of Management Board of Royal Dutch Petroleum, the other two were the Chairman and Vice Chairman of Shell Transport and Trading. The chairmanship of CMD was chosen and replaced regularly between members of Royal Dutch and Shell Transport. Being distributed amongst a group, executive power were diluted and the Group lacked the individual leadership like in other majors that time. The top executive power of Shell was characterized by consensus decision makings within a collective management group. Operating Companies (Opcos) Opcos were mostly active within a single country and their functions could differ from each others. For example, Shell Bahamas and Shell Cambodia were only small marketing companies. Shell UK, Shell Canada, and Norske Shell, on the other hand, were active in several sectors. Some other companies had operations in only one sector, e.g. exploration and production (E&P), refining, marketing, coal, gas. etc. Opcos were highly-independent in operations and financial responsibility, thereby, contributing to the decentralization of the Group. On the other hand, the nature of oil business created certain linkages between opcos, for example: between upstream operation and downstream operation, the common financial fund from the top, common technological needs. That necessitated a need for coordination’s amongst opcos. That was the reason for the birth of matrix structure, operating by services company. Service companies The third key players, service companies, each of which was led by a principal executive who then appointed the coordinators to facilitate the coordination between opcos. There were 3 types of coordinators: regional coordinators (of Europe, South Asia, Middle East, etc.), sector coordinators (Upstream, downstream, metals, etc).
  15. 15. 12 4.2.3 The Matrix structure (see appendix 8) In this Matrix structure, operations of opcos were coordinated by service companies in accordance to 3 dimensions: regional, sectors, and functions. The chief executive in each opcos reported the situation to 3 coordinators: their regional coordinator, sector coordinator, and functional coordinator. For example, a manager of an opco in France which operated in downstream sector who needed a certain of input crude to manufacture fabricant, he would have to report the situation to 1) his regional coordinator – which was the coordinator of West European area, 2) his sector coordinator – which was the coordinator of downstream oil manufacturing, and 3) a function coordinator in material, or planning. Even though the matrix structure had 3 dimension, the main emphasis in this period was on the coordination between opcos in the same region; or in other words, geographical coordination was more important than the other two dimensions: sector, or function. The planning process was done from bottom to the top. The coordinators of the sector, of the region, and the planning staff (a function in the function dimension), and the managers of the opco coordinated and proposed strategic plan for their operating companies to the top, CMD for approval. In short, the structure was highly decentralized between the CMD and the operation level. The opco in each country had a high level of autonomy. Meanwhile, a certain level of integration in activities between opcos to some extent allow The Group to have the flexible needed to adapt with the changes in the volatile environment. 4.2.3 Structure Observation Characterized by networks of joint-venture operating companies and matrix organization, a certain level of integration, but still high independency of opco against the CMD in accommodating to the country situation, the structure of The Group this period could be put into Barlett/Ghoshall model in a quarter which half is transnational and half is multidomestic. In short, from 1960s to 1995, The Group strategy shifted from a multidomestic one to a more (but not completely) transnational one. (see appendix 9)
  16. 16. 13 4.3 From 1996-2004. The restructuring. 4.3.1 Purpose In the 1990s, the 3 dimension structure came to reveal its drawback. With the drop of oil price, the pressure to reduce cost was on the opcos. Managers at opco level tried to reduce cost, and had seen potential for cost reduction through streamlining the structure. However, with the increase of inefficiency in the bureaucratic 3 dimension coordination systems, the Group decided to changes. The Shell group abolished the matrix 3 dimension structure and designed a new structure to simplify the system, clarify the report relationship between the top and opcos, and most importantly switch from a geographical emphasized structure to a structure where sector coordination was the salient one. 4.3.2 New manastruc Four core organizations. Four core types of organizations in this new manastruc were Business Organizations, Corporate Center, Professional Services, Operating companies (Opcos). Business Organizations were catalogued according to sectors. Each business organization was in charge of one sector. At the head of each business organization was a Business Committee, consisted of business directors appointed by CMD. Each business director in a Business Committee was responsible for a defined region. For example, exploration and production (E&P- or upstream sector) Business Committee comprised of Regional E&P Business Director for Asia-Pacific and South America and Regional E&P Business Director for Middle-East and Africa, etc. Business Committees duties were to devise the strategy for the business area, assess the performance of opcos, provide services support for opcos, and examine the financial plan of opcos before suggesting for approval at the CMD level. Corporate center supported the operation of CMD and provided services to parent companies and holding companies. Corporate center assisted CMD in devising corporate strategy, managing investment portfolio, human resources etc. To the parent companies and the holding companies, corporate was of use in providing
  17. 17. 14 counsel in legal issues, e.g.: Intellectual properties, taxations; or the reputation of the Group, communication internally and externally. Professional services made up the third type of organization. Professional services provided support to operating companies and service companies within the group, and also available for third-party customers. The services they provided were finance, HR, legal…each of which was led by a relevant director from Corporate Center (as mentioned above, the Corporate Center also had experts in similar area of functions). At the operating level, the operating companies, if operated in more than one business area (for example: both downstream and upstream), would be divided into operating units led by only one chief executive for each sector. This CEO had to plan, set goal, and implement strategies in accordance to the guideline frame worked from the Business Committee of that sector. The report procedure was direct to the Group (CMD). (see appendix 10) 4.3.3 Further attempt for integration In 1998, the Group took another attempt to further reducing cost and enhance the integration between sectors. The intention was to replace the contemporary consensus principle in decision making, or collective leadership by placing more emphasis on the role of individual leadership, and power concentration. The Business Committee were abolished, replacing by CEO for at the head of each sectors. At the top management level, the role of each Managing Director in CMD was clarified, limiting each Director authority within the range of one geographical area. Shell Oil operations in US, which might have been seen as a de facto Shell Headquarter in America for its size and complexity, were integrated into the Global Structure, to enhance the integration between sectors.25 25 http://www.deloitte.com/assets/Dcom- UnitedStates/Local%20Assets/Documents/us_consulting_OilandGasJournal_New%20Partnerships_010311.pdf
  18. 18. 15 4.3.4 Structure Observation (see appendix 11) This period, further attempts were made to enhance integration between opcos in the same sector rather than the same region. The switch from geographical-based coordination to business-area-based coordination was one worth-mentioning point. The second point was the effort to reduce the level of decentralization in regional, national opcos by define a clear line of report, directly between the top management and the executives of each opco. The restructuring in 1996, therefore, can be viewed as an attempt of The Shell Group to move it position toward the Global Strategy quarters in the Barlett/Ghoshall model. 4.4 From 2005 until now. 4.4.1 Unification Despite the efforts to integrate and construct a global structure making in the restructuring in 1996, the Group still confronted with the problematic of dividing corporate authority between headquarters in The Hague and in London. To increase even more the simplicity and clarity in the management as well as governance structure, between 2004 and 2005, The Royal Dutch/Shell group made the decision to unify the two parents companies The Royal Dutch and Shell Transport. After the unification, the corporate authority and power line within in the corporation was clearly defined. The corporation now has only one parent company – The Royal Dutch Shell Plc, with only one board of directors. There is only one headquarters situated in The Hague, Netherland. The Committee of Managing Directors (CMD) was abolished, replacing to the root a system of collective leadership. To be in the position left by CMD is now only one CEO who are empowered the top executive authority. The chief executive of each business area/sector now reports directly to the CEO of the group. 4.4.2 Further streamlining effort In 2009, Royal Dutch Shell conducted another restructuring. This time, its sectors were reorganized in order to streamline corporate functions. A new department was established, Project and Technology Department, in order to achieve economies of scale, and standardize the process. (see appendix 12)
  19. 19. 16 4.4.3 Structure Observation The main feature of Shell structuring strategy from 2005 (and even also from 1996) until now has been centralization and integration even more to realize cost reduction. After the unification, executive power now is concentrated in only one person, the headquarters now is the only one. All of that, plus the integration process between sectors improves the decision making process to certain extent, but also, saving the cost of having a bulky and heavy amount of staffs. It is, therefore, possible to conclude that Shell is still moving forward to a Global Structure with higher degree of integration and standardization in this XXL century. CHAPTER 5 SHELL CURRENT STRUCTURE – AN OVERVIEW The appendix 13 illustrates Royal Dutch Shell PLC structure from executive perspective. Ture from executive perspective after the unification in 2005 and another restructuring in 2009. CEO has the highest authority in the firm and is monitored by a single board of directors with 10 members led by a non-executive chairman. At the headquarters, corporate center comprises of personals in financial, legal, Human Resources issues. They report directly to the CEO. At the Business Level, after 2009 Shell separates its business into 4 major sectors: Upstream International, Upstream Americas– both of which includes Exploration and Production, Gas & Power, Oil Sands. Downstream sector is the second major, concerning Oil Production, and Chemicals manufacturing. Project and Technology is a new established business units. This unit is responsible for developing and accelerating the standardization process, aiming for economies of scale. The operating companies have insignificant changes in structure since the restructuring in 1996. Shell Business Services Center (or Professional Services as the old name) offer centralized finance, human resource, IT and other business services to Shell companies globally. And they are 100% Shell-owned operations that deal with business activities across different functions and businesses, which bring them all into one specialist location.
  20. 20. 17 CHAPTER 6 IMPLANTATION SHELL OPERATIONS To analyse the operation level and the translation of the upper strategies into actions, first will be looked at the activities of Shell operating companies these can be put into a value chain. The focus is on 4 big parts of Shell’s value chain. First the functions and activities of Shell’s headquarter, secondly the upstream activities, thirdly the downstream activities and as fourth logistic and transport. 6.1 Functions and activities of Shell’s headquarter Despite the fact that Shell´s headquarter is officially in the Hague, the Netherlands, Shell has also important offices in Houston (America), London (England), Rotterdam (The Netherlands), Dubai and Singapore. Due the fact that this are important locations for Shell to carry out their activities.26 The headquarters of Shell is located in The Hague, The Netherlands. At Shell’s headquarter there work around a thousand employees in all kind of departments. Shell’s headquarter deals mainly with five segments; upstream International, upstream America, Down stream, Project & technology and other business unites and corporate. Segment downstream is at this moment defined in five smaller unites, 3 are located in Rotterdam and 2 in The Hague. In the beginning of 2012 Shell will move its headquarter from The Hague to Rotterdam. This due the fact that protections locations mainly in Rotterdam are, also a big part of the staff lives in Rotterdam or close to Rotterdam.27 Shell’s headquarters mainly focusing on controlling the value chain. They are focusing on major projects around the world for gaining more materials and keeping customers satisfaction. (see appendix 14) Shell’s HR-Practices Shell Human Resource (HR) is responsible for optimizing the business by effectively managing and managing and deploying their employees. HR designs 26 http://www.shell.com/home/content/shipping_trading/about_shell_trading/ 27 http://vorige.nrc.nl/economie/article2556819.ece/Shell_keert_terug_in_centrum_Rotterdam
  21. 21. 18 and implements the policies, processes and practices that achieve the Shell core objectives. Shell is using a framework that would is gives a more holistic view of the HR professions in Shell. In the past, every location had his own Human and Resource department. To give it a structure and that every location is going in the same direction Shell introduced a HR software. 28 6.2 Upstream The upstream oil sector is a term commonly used to refer to the searching for and the recovery and production of crude oil and natural gas. The oil industry has three levels: upstream, midstream, and downstream, this analysis will mainly focus on the upstream and downstream activities of Shell. The upstream level includes the exploration, drilling, and production of crude oil and the midstream level includes the transportation and trading of crude oil to refineries.29 Shell’s upstream businesses explore for and extract crude oil and natural gas. Shell is using joint ventures with international oil companies around the world. Shell liquefies natural gas by cooling and transporting it to their customers across the world. They are also converting natural gas to liquids to provide cleaner burning fuels. The upstream business are grouped into two organizational unites. First the Upstream America, covering the Americas and Upstream international, covering the rest of the world with major projects in Europe, Asia, Middle East, Russia, Australia and Africa. 30 6.3 Down Stream The upstream level of Shells activities includes refining of crude oil into finished products, the storage of crude oil, and the distribution and marketing of crude oil to wholesalers and retailers.31 28 http://www.shell.com/home/content/careers/professionals/job_areas/commercial/human_resources/ 29 http://www.duke.edu/web/soc142/team9/GVC.html 30 http://www.shell.com/home/content/aboutshell/our_business/ 31 http://www.duke.edu/web/soc142/team9/GVC.html
  22. 22. 19 Shell’s Downstream organization is made up of a number of businesses. Collectively these turn crude oil into a range of refined products, which are moved and marketed around the world for domestic, industrial and transport use. These include fuels, lubricants and bitumen. Shell benefits from tremendous scale through their global integrated network of refine using chemical plumes they are turning 4 billion bails of crude oil per day into valuable transport fuels, base chemicals and other products. Their worldwide supply distribution infrastructure is complemented by their global trading capabilities together they allow Shell to make the right make or buy decisions. And optimize earnings. Shell’s branded fuel retailed network is the world largest. Shell has more than 45.000 service stations in more than 90 countries. Everyday Shell is selling more than 315 million liters of fuel to approximately 10 million customers. Shell’s lubricants products are available in 120 countries and have a 13% share in the global lubricants market. Our Downstream organization is made up of a number of businesses. Collectively these turn crude oil into a range of refined products, which are moved and marketed around the world for domestic, industrial and transport use. These include fuels, lubricants and bitumen. 32 Their manufacturing business includes Refining, Supply and Distribution. Marketing includes our Retail, Business to Business, Lubricants and Alternative Energies. Their Chemicals business has dedicated Manufacturing and Marketing units of its own. Shell also trade crude oil, oil products and petrochemicals primarily to optimize feedstock for their Manufacturing business and to supply our Marketing business. The global network of Shell Trading companies encompasses Shell’s trading activities in every major energy market around the world. They also manage one of the world's largest fleets of liquefied natural gas (LNG) carriers and oil tankers. Their industrial and heating fields marketed by their commercial fields business count for 20% of all Shell fuels sold worldwide. Shell is creating a strong portfolio through investing in key markets and disinvesting non strategic assets. Over the last 5 five Shell has invested 23 billion 32 http://www.shell.com/home/content/globalsolutions/about_global_solutions/our_business/downstream/
  23. 23. 20 dollars in their oil products chemical businesses. Shell is investing in big projects in several countries and reduces cost through letting businesses go that are not profitable. By this, their build a strong brand, the Shell brand. 33 The implementation of Shell’s strategy will see their actively manage around three themes in Downstream:  operational excellence and cost efficiency: Shell is striving to maximize the uptime and operating performance of their assets base, and to reduce costs and complexity through a series of continuous improvement programmers.  portfolio concentration: Shell mainly focus on the refining their portfolio on the most efficient facilities, those that best integrate with crude supplies, marketing outlets and local petrochemicals.  selective growth: Shell aim to maintain their grow, their margins in their core heartland regions, with selective expansion in countries such as China, India and Brazil, which have high growth potential. This includes researching, developing and marketing biofuels. 34 6.4 Trading Shell trading is a section of the shell business and controls the distribution across the world and with external customers.35 Shell has more than 300 distributions facilities with more than 3,000 storage tanks in 70 countries. With this, Shell moves their products through USA and Europe. Shell owns around 7,000 trucks and these trucks travel around the world and deliver every seven seconds.36 An overview has been giving of the most important locations where Shell materials gains and trade. (see appendix 15) 33 http://www.youtube.com/watch?v=PVHAraYx_ho&feature=relmfu 34 http://www.shell.com/home/content/aboutshell/our_business/ 35 http://www.shell.com/home/content/shipping_trading/about_shell_trading/ 36 http://www.scribd.com/doc/33211461/Company-Analysis
  24. 24. 21 CONCLUSION To conclude, Shell comes from the position of a big corporation, and still is a giant. It can be described as a big octopus with multitudes of arms, each of which as one operating companies. Throughout history, that complexity and sophistication has helped Shell create the needed flexibility to accommodate to the environment. The trend by time, however, does not favor the complexity and vastness of a giant like Shell. In environment which grows more and more volatile, competition fiercer and fiercer, Shell is urged to change: local flexibility now does not suffice, multinational company like Shell also needs the effects of standardization which, in the end, helps benefit from economies of scales leading to cost reduction and learning effects. That is all Shell trying to do currently, although there might be many strategies, approach: restructuring, merging sectors, streamlining, unification etc. All of those strategies is to come toward a more integrated system, with standardized process, balancing between responsiveness and power- concentration. However Shell tries to integrate its system, this will always prevail: Shell will never be completely integrated or power-centralized. The nature of its business has always been susceptible to regional environment: political, legal, social, economic. Therefore, it would be interesting to see how Shell manage to balance between these two orientation, pursuing a more integrated system while harnessing the advantages of a responsive chain of operating companies in a circumstance of the rising state backed national oil company and scarcity of oil in the future.
  25. 25. 22 REFERENCE Books  8. David, R.D., (2011), Strategic Management: Concepts. Boston: Prentice Hall  12. Henry, A., (2011), Understanding Strategic Management. Oxford: New York: Oxford University Press  15. Rice, J.L., (2010), Strategic Management: A Dynamic Perspective: Concepts and Cases. Pearson Australia  18. Wheelen, T. L., (2010), Concepts in Strategic Management and Business Policy: Achieving Sustainability. Upper Saddle River, N.J.: Prentice Hall Annual Reports and Fact Books:  23. & 29. Shell Press Release, Shell announces six new biofuels research agreements, 17 September 2008 www- static.shell.com/static/media/downloads/press/biofuels_research_agreemen ts_17092008.pdf Shell websites (accessed on 15 December 2011)  1. Who we are http://www.shell.com/home/content/aboutshell/who_we_are/  2. History http://www.shell.nl/home/content/nld/aboutshell/who_we_are/history/  3. Locations http://www.shell.nl/home/content/nld/aboutshell/who_we_are/locations/  4. Shell worldwide http://www.shell.com/home/content/aboutshell/who_we_are/shell_worldwide /
  26. 26. 23  6. Purposes http://www.shell.com/home/content/aboutshell/who_we_are/our_purpose/  7. Values http://www.shell.com/home/content/aboutshell/who_we_are/our_values/  10. Next generation project options http://www.investorshandbook.shell.com/2010/summaryreview/ourstrategy/ next-generationprojectoptions.html?cat=m  11. Acreage additions in Exploration http://www.investorshandbook.shell.com/2010/upstream/exploration/acreag eadditions.html?cat=i  13. New senior management structure (2009) http://www.shell.com/home/content/media/news_and_media_releases/archi ve/2009/new_management_structure_27052009.html  14. Shell Business Service Centres http://www.shell.com/home/content/careers/business_service_people/  16. Strategy http://www.shell.com/home/content/aboutshell/our_strategy/  17. National and international oil companies: a sum not a balance http://www- static.shell.com/static/media/downloads/speeches/brinded_london_301020 07.pdf  19. & 25. Sustainable development and Shell’s business strategy http://sustainabilityreport.shell.com/2010/operatingresponsibly/ourbusinesss trategy.html?cat=m  20. & 26. Introduction from the CEO of Shell http://sustainabilityreport.shell.com/2010/servicepages/search.php?q=UN+ Global+Compact&pageID=38659&cat=b  21. & 27. Biofuels and sustainability http://www.shell.com/home/content/environment_society/environment/climat e_change/biofuels_alternative_energies_transport/biofuels/biofuels_sustain ability/  22. & 28. Technical centres http://www.shell.com/home/content/globalsolutions/innovation/innovative_thi
  27. 27. 24 nking/technical_centres/overview/  32. Unification of Royal Dutch and Shell Transport http://www.unification.shell.com/shell_proposal/general/proposals/press2  30. & 34. Shell Business http://www.shell.com/home/content/aboutshell/our_business/  26. & 35. Shell trading http://www.shell.com/home/content/shipping_trading/about_shell_trading/  28. Human resources http://www.shell.com/home/content/careers/professionals/job_areas/comme rcial/human_resources/  32. Downstream http://www.shell.com/home/content/globalsolutions/about_global_solutions/ our_business/downstream/ Online Articles (accessed on 15 December 2011)  5. The Industry Handbook: The Oil Services Industry http://www.investopedia.com/features/industryhandbook/oil_services.asp  9. Singh, A. (2010) Strategies for oil and gas companies to remain competitive in the coming decades of energy challenges. Massachusetts Institute of technology. http://dspace.mit.edu/bitstream/handle/1721.1/59130/658961439.pdf?seque nce=1  24. Grant M.Robert. Cases to Accompany Contemporary Strategy Analysis. Case seven: Organizational Restructuring within the Royal Dutch/Shell Group. Blackwell Publishing.UK.2005. http://www.blackwellpublishing.com/grant/docs/07Shell.pdf  25. Oil and Gas Financial Journal. New Partnership rules shake up shale deals: Price volatility fosters changing business models for gas players. http://www.deloitte.com/assets/Dcom- UnitedStates/Local%20Assets/Documents/us_consulting_OilandGasJourna l_New%20Partnerships_010311.pdf  27. Shell keert terug in centrum Rotterdam
  28. 28. 25 http://vorige.nrc.nl/economie/article2556819.ece/Shell_keert_terug_in_centr um_Rotterdam  29. & 31. Global Value Chains http://www.duke.edu/web/soc142/team9/GVC.html  36. Shell Company analysis http://www.scribd.com/doc/33211461/Company-Analysis Video  33. Downstream - Royal Dutch Shell plc 2009 strategy update http://www.youtube.com/watch?v=PVHAraYx_ho&feature=relmfu
  29. 29. 26 APPENDIX A) SWOT analysis Strengths  Shell’s current investments in exploration will help ensure continued activity over coming decades.  Research into biofuels, solar power, wind power and energy from hydrogen helps the organization diversify in a market where ecological issues are of increasing concern, and also addresses issues of the longevity of fossil fuel reserves.  Diversification into products such as fuel cards and credit cards helps Shell maintain a wider portfolio of products, spreading risk.  Shell pioneered the use of scenarios, a planning tool where a range of possible future situations are explored and strategy adapted to ensure future demands can be met.  The organization has worked hard to improve its general reputation and believes it is now seen more positively than it used to be.  Shell has utilized opportunities to develop strategic partnerships, for example, supplying CO2, which is a by-product of its refinery process, to Dutch tomato farmers who had previously used heaters (higher CO2 concentration in greenhouses accelerates tomato growth). Weaknesses  Shell’s strong focus on oil and gas requires it to search continually for replacement supplies, and exploration is a high-cost element of its operations.  Shell still uses the technique of flaring and burning gas from oil extracting sites as a way of dealing with unwanted by- products of its operations: this is considered to be environmentally unacceptable by many.  Shell has a strong presence in Nigeria, but this area is politically volatile and operations have been fraught with security problems for staff and attacks on production. The company may be forced to withdraw, compromising its network of resources and threatening its ability to meet production obligations.  The company is reported to be reviewing involvement with a wind power development near Blackpool, raising questions regarding its commitment to alternative energy sources. Opportunities Threats
  30. 30. 27  New oil and gas reserves are still being found, and there is the potential to discover more.  Shell has been able to move into areas rich in reserves which were previously too risky to operate in, for example Iraq.  Shell’s active response to criticisms of environmentally unfriendly activities may lead to less antagonistic relationships with environmental groups.  Emerging economies have a large and growing demand for fossil fuels.  Diversification into new products and alternative fuels may open up new markets  Fuel prices in recent months have been particularly volatile, initially rising quickly but subsequently falling sharply, reducing potential profit  Political issues in some regions, Nigeria in particular, threaten operations. A court order has demanded Shell hand over a site on the Niger Delta to local ownership.  Summer 2008 saw strikes by tanker drivers working for Hoyer, suppliers of Shell, resulting in negative publicity, criticism of Shell’s high profits and a supply problem for Shell forecourts.  The economic downturn has led to a decrease in demand for fossil fuels, possibly aggravated by changes in driving habits in response to high fuel prices earlier in 2008.  Weather can have significant effects on production, with refineries particularly hit recently by Hurricane Ike. Source: http://www.businessteacher.org.uk/business-resources/swot-analysis- database/shell-swot-analysis/ 1) Figure showing Shell participated in the whole value chain
  31. 31. 28 Source: Stabell, C. (2001) New Models for Value Creation and Competitive Advantage in the Petroleum Industry. Norwegian School of Management BI. http://web.bi.no/forskning/papers.nsf/0/d67350db496df7b1c1256e7600401074/$FI LE/fr2001-01.pdf 2) Figure showing the value chain of petroleum industry Source: Stabell, C. (2001) New Models for Value Creation and Competitive Advantage in the Petroleum Industry. Norwegian School of Management BI. http://web.bi.no/forskning/papers.nsf/0/d67350db496df7b1c1256e7600401074/$FI LE/fr2001-01.pdf 3) Figure showing Shell’s upstream capital investment’s distribution Source:http://www.investorshandbook.shell.com/2010/summaryreview/ourstrategy /next-generationprojectoptions.html?cat=m 4) Map showing Shell’s key projects under development
  32. 32. 29 Source: http://www.investorshandbook.shell.com/2010/upstream/exploration/acreagead ditions.html?cat=i 5) Figure showing the top down reorganization of Shell in 2009 Source:page 6, Voser, P. Royal Dutch Shell Plc Fourth quarter & full year 2009 results. 2010.
  33. 33. 30 http://www- static.shell.com/static/investor/downloads/financial_information/quarterly_results/2 009/q4/q4_2009_analyst_presentation.pdf 6) Shell until 1960s in Barlett/Ghoshal model 7) Figure showing Shell’s governance structure Source: page 121. Grant M.Robert. Cases to Accompany Contemporary Strategy Analysis. Case seven: Organizational Restructuring within the Royal Dutch/Shell Group. Blackwell Publishing.UK.2005. 8) Shell’s matrix structure
  34. 34. 31 Souce: page 122. Grant M.Robert. Cases to Accompany Contemporary Strategy Analysis. Case seven: Organizational Restructuring within the Royal Dutch/Shell Group. Blackwell Publishing.UK.2005. 9) Shell from 1960s to 1995 10) Figure showing Shell’s four core organizations
  35. 35. 32 Source: page 138 Grant M.Robert. Cases to Accompany Contemporary Strategy Analysis. Case seven: Organizational Restructuring within the Royal Dutch/Shell Group. Blackwell Publishing.UK.2005. 11)Shell from 1996 12)Figure showing the top down reorganization of Shell in 2009
  36. 36. 33 Source: Oil and Gas Financial Journal. New Partnership rules shake up shale deals: Price volatility fosters changing business models for gas players. [http://www.deloitte.com/assets/Dcom- UnitedStates/Local%20Assets/Documents/us_consulting_OilandGasJournal_N ew%20Partnerships_010311.pdf] Accessed on 15 December 2011. 13)Figure showing Shell’s current structure Source: Oil and Gas Financial Journal. New Partnership rules shake up shale deals: Price volatility fosters changing business models for gas players.] Accessed on 15 December 2011 http://www.unification.shell.com/shell_proposal/general/proposals/press2/ 14)Figure showing the oil supply chain
  37. 37. 34 Source: http://www.duke.edu/web/soc142/team9/GVC.html (accessed on 16 December 2011) 15) Figure showing Shell’s trading locations Source http://www.shell.com/home/content/shipping_trading/about_shell_trading/

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