Shell: Company History and Business Overview
Pronunciation: qiao pai
Its formation began in 1907 with the merger of the shareholdings of Britain's Shell Transport and Trading Company and the Royal Dutch Petroleum Company. The group gradually became one of the world's major international oil companies, operating in around 130 countries with a very wide range of partners. In 2007 total sales revenue reached 355.782 billion US dollars with profits of 31.331 billion US dollars, making it the largest company in the world at the time. Wherever it operates it places health, safety and environmental standards and adherence to the group's business principles first, and it emphasises the training and development of local staff.
The Royal Dutch/Shell Group has operated in China for more than a century and is now developing integrated oil, gas and chemicals businesses. Actual and contracted investment in the Chinese mainland (excluding Hong Kong) approaches 1 billion US dollars, with 1,500 employees. It is one of the largest international equity oil producers in China and one of the largest traders of crude oil and refined products.
Today the Shell group operates in more than 130 countries worldwide with a workforce approaching 100,000. Shell's goal in China is to be China's international partner, supplying clean and sustainable energy solutions. Shell China's total investment in the country has reached 4 billion US dollars, with more than 20 wholly owned and joint venture enterprises and close to a thousand employees.
Shell is committed to sustainable development and to supplying clean energy in a socially responsible way. The group currently has five core businesses: exploration and production, oil products, gas and power, chemicals, and renewable energy. Each subsidiary operates independently but follows the same business principles, which keeps their economic, environmental and social performance at the same high standard.
The Shell group is the world's largest oil exploration and production enterprise, active in more than 50 countries with the most advanced technology available. Daily oil output exceeds 2 million barrels, and it holds equity in 55 refineries across 35 countries, with capacities ranging from 348,000 barrels a day (Pernis in the Netherlands) down to 10,000 barrels a day.
The Shell group entered the coal industry in the 1970s. It now sells about 50 million tonnes of coal a year. Shell signed a long-term agreement with China National Coal Import and Export Corporation to purchase around 1 million tonnes a year from the Antaibao mine in Shanxi Province.
By sales, the Shell group's chemicals business ranks among the world's ten largest chemical companies. It is one of the world's largest producers of petrochemical and detergent intermediates, as well as a major solvent supplier and a producer of ethylene oxide and its derivatives. The group manufactures several hundred chemical products. Polymers — including thermoplastics, resins and synthetic rubber — account for about one third of the total business. More than 50% of chemical products are sold in Europe, with roughly one third sold in the United States.
This is a field the Shell group has developed in recent years, covering mainly forestry and solar energy. It is handled by the group's Non-Traditional Business (NTB) division, created in the 1970s to broaden the group's scope. Its remit includes biological businesses such as microbial propagation, alternative energy technologies and new materials.
The parent companies, Royal Dutch Petroleum Company and The Shell Transport and Trading Company, are publicly listed. They are not themselves members of the group and take no part in operations. Royal Dutch Petroleum holds 60% of the group and Shell Transport and Trading 40%. The group as a whole comprises holding companies, service companies and operating companies. Shell Petroleum NV of the Netherlands and The Shell Petroleum Company Limited of the UK, both subsidiaries of the two parents, hold all the shares in the service companies and hold, directly or indirectly, all the group's interests in the operating companies. The group holding companies receive the dividends arising from these shareholdings and in turn pay dividends to the parent companies.
In addition, this technology is widely applied and practised in related fields.
There are three main stages. The first is for the student to complete an application form, which the company then screens. Shell's application form is designed around CAR and also supplies material for the interview; candidates with higher potential are shortlisted on the basis of their academic record and other activities at school. Reportedly 80–90% of applicants are eliminated at this stage.
The second stage is a 50-minute structured interview. The interviewer asks about several predetermined areas to assess the candidate's analytical and problem-solving abilities; the candidate decides whether to continue and the company decides whether to recommend them to the assessment centre. The pass rate at this stage is generally 25%.
Those who pass the structured interview go on to the assessment centre for a full day of testing. This includes a group discussion (six to eight candidates discuss a business topic independently), a proposal exercise (presenting on a topic and taking questions), a business simulation (handling a batch of business matters) and an interview (focused mainly on analytical ability). The results are assessed by the company's most senior managers. Getting through the assessment centre effectively settles the outcome.
Viewed from the angle of industry development, market demand is also pushing technology forward.
Performance evaluation and improvement occupy a very important place in Shell's human resources practice. Performance evaluation covers both job performance and capability growth. Managers listen to each employee's own aspirations and requirements for future development, then agree together how the employee should perform in the coming year, including growth trajectories for capability goals and business development goals.
Viewed from the angle of industry development, market demand is also pushing technology forward.
Shell has been doing business in China for more than a hundred years. In the early 1890s Marcus Samuel and Sam Samuel, the brothers who founded Shell Transport and Trading, began importing kerosene into China and built oil depots in Hong Kong, Shanghai, Guangzhou and Xiamen.
By 1894 the Samuel brothers were already shipping kerosene to Shanghai in bulk tankers. That same year Royal Dutch Petroleum began importing "Crown" brand kerosene into China. (On the mainland the Crown brand was then known as the Monk's Cap brand; in Hong Kong it was called the Canopy brand.)
Shell Transport and Trading and Royal Dutch Petroleum were originally competitors. In 1903 the two companies began operating jointly in the Far East, establishing the Asiatic Petroleum Company in London.
Asiatic Petroleum opened offices in Hong Kong and Shanghai in 1906 and 1908 respectively. In 1913 the two offices became the head offices of Asiatic Petroleum (South China) Ltd and Asiatic Petroleum (North China) Ltd.
In 1907 Royal Dutch and Shell Transport merged their operations to form the Royal Dutch/Shell Group, although the company's business in China continued to be conducted under the Asiatic Petroleum name.
Building on this, industry experts have also carried out a great deal of research and refinement.
After 1950 Shell continued to develop in China and became the only Western oil company still operating there at the time. Shell's head office in Shanghai was allowed to remain until it finally closed in 1966.
In 1970 and 1971 Shell was invited to attend the Guangzhou Trade Fair. In 1980 Shell established an office in Beijing and actively pursued chemical product trade. In 1983 Shell worked successively with Exxon and Phillips Petroleum to begin offshore oil exploration in the South China Sea.
With the implementation of China's opening-up policy, Shell set up two joint venture oil depots in the Shenzhen Special Economic Zone in 1985 and 1987. Shell has invested more actively in China ever since and has now developed a wide range of businesses across many provinces and cities.
Beyond this, a range of other factors must also be weighed in practical engineering applications.
Shell has grown very quickly in China; by the end of 2006 its total investment in the country stood at about 4 billion US dollars, making it one of the largest international energy companies investing in China.
Shell's business objective in China is to help the country address its priority issues in the energy field — energy security and supply, environmental protection and energy efficiency — and to build sound, mutually beneficial partnerships with Chinese enterprises and customers at home and abroad.
Shell has established more than 30 wholly owned or joint venture companies in China employing close to 7,000 people, of whom more than 97% are Chinese nationals. Shell has built partnerships with China's four major energy companies — CNPC, Sinopec, CNOOC and Yanchang Petroleum.
We explore for, produce and refine oil; we also develop natural gas resources; Shell Helix lubricants and the Ferrari team have won glory together in Formula One; more than 46,000 Shell service stations operate around the world; our power business keeps growing; our chemical products keep diversifying; and we are an active pioneer in renewable energy…
Viewed from the angle of industry development, market demand is also pushing technology forward.
Shell places great emphasis on investment in oil production research and development. This reflects the growing risks posed by pollution and the rising costs of drilling in deep water and the Arctic. The company also uses advanced technology and improved equipment to reduce risks to production personnel while lowering drilling costs. Shell currently has 16 research institutions worldwide with 6,900 researchers. Safety and environmental issues form an important part of the integrated research programmes at every institute. Shell's exploration and production companies are active in more than 45 countries, producing in total over 4 million barrels of crude oil and more than 400 million cubic metres of natural gas a day, of which Shell's share is about half. Shell's oil products business covers global transport, trading, refining and distribution. Shell holds equity in 50 refineries and leads the world in aviation fuel, lubricants and service station operations, with around 50,000 service stations worldwide. Shell's commitment is to provide customers with the highest quality products and services.
The chemicals business has recently been repositioned to concentrate on world-scale major projects, including the principal chemical building blocks in which Shell has achieved or can achieve global leadership. The group's aim is to develop its chemicals position in Asia to match Shell's position in the United States and Europe. Shell Gas sells more than 80 billion cubic metres of natural gas a year and holds gas interests in more than 20 countries, generally through joint ventures with local governments or other oil companies. Some of the world's major gas markets depend heavily on imported gas, supplied either as LNG or through long-distance pipelines. Shell holds interests in three of the world's major LNG plants (Brunei, Malaysia and Australia) and in several under construction (Nigeria and Oman), as well as in major gas transmission companies in Europe, the United States and elsewhere. From 1996 Shell began expanding its interests in power generation, mainly through stakes in operating and under-construction power plants in the UK, Mexico, the Philippines, Colombia, China and Brazil totalling 3.32 million kilowatts, with plans to hold interests in a further 6.68 million kilowatts. Renewable energy is Shell's fifth core business; Shell has around 20 years of forestry experience and began solar power research in the 1970s. Over the following five years Shell planned to invest more than 500 million US dollars in renewable energy, focusing initially on solar power, biomass and forestry while also developing market-oriented wind power projects.
In February 2011 Shell transferred its metalworking fluids and metal rolling lubricants business to Houghton (United States, headquartered in Philadelphia, Pennsylvania), ending Shell's involvement in those product lines.
To support reforms aimed at improving its business performance, Shell simultaneously strengthened its commitment to the group's business principles and to strict health, safety and environmental standards, and has now extended that commitment to sustainable energy development. Despite the wave of mergers among the world's major oil companies, the measures Shell has taken will continue to hold its leading position firmly within the international oil industry.
The directional policy matrix created by Royal Dutch Shell uses a matrix to position each business unit according to market prospects and competitive capability. Market prospects fall into three categories — attractive, moderately attractive and unattractive — quantified using factors such as profitability, market growth rate, market quality and the regulatory situation. Competitive capability falls into three categories — strong, medium and weak — determined by factors such as market position, production capability, and product research and development.
It is worth noting that technologies and standards in this field continue to develop and improve.
3. Accelerate development or withdraw. Products in this zone should become the company's high-speed craft for the future. However, only the most promising few should be selected for accelerated development, with the rest abandoned.
4. Grow. Products in this zone generally face two to four strong competitors, so no single company holds a leading position. The viable strategy is to allocate sufficient resources so the product can grow along with the market.
Building on this, industry experts have also carried out a great deal of research and refinement.
(4) Check results, review accidents and incidents, analyse trends from the statistics, and send safety management teams to carry out comprehensive site inspections. Safety reviews of seismic crews may be carried out by medical and environmental advisers sent by Shell. The procedure runs: site inspection / accident review / accident analysis, safety committee meeting, business manager safety meeting, crew leader and member safety meeting, hazard identification.
Shell holds that responsibility for unsafe operations and the resulting casualties or occupational illnesses rests with everyone from supervisors up through managers at every level and the business management organisation. All employees should know their specific role in HSE and the responsibilities they carry. These requirements must be written clearly into their duties and into the performance expected of them, and appropriate weight must be given to each manager's and supervisor's attitude to and performance on HSE.
Viewed from the angle of industry development, market demand is also pushing technology forward.
2. The professional manager. A professional manager makes the fullest possible use of existing resources. He may hold a doctorate and know how the technology should be researched and developed; he can deliver results within the scope of what he controls. That is the biggest difference between him and an entrepreneur.
Beyond this, a range of other factors must also be weighed in practical engineering applications.
1. Identify and cultivate entrepreneurial successors. Most successful domestic companies have gone through a period of pioneering work by a new leader, a new entrepreneur. But moving from a core field into related fields, growing from 100 million to 1 billion or 5 billion, going from China to the world — that calls for new entrepreneurs with entrepreneurial spirit who can look beyond the resources the company currently holds and create something bigger.
At the same time, the supporting processes and equipment continue to be optimised and upgraded.
The Asian financial crisis left the world economy relatively depressed, which also had a considerable effect on China's economy. Foreign companies in particular had been very optimistic about the Chinese market at first, investing heavily and drawing up extensive human resource training plans. Given the current situation, however, growth may be gentle for some time, so many talented people have not obtained the positions their employers had promised. For domestic enterprises this is an opportunity, and companies should seize it by giving these people more scope to try things and create.
Building on this, industry experts have also carried out a great deal of research and refinement.
Third, mergers, restructurings, collaborations and equity investments between organisations occur constantly. In 1997 and 1998 many large companies in pharmaceuticals, chemicals, electronics and finance worldwide restructured and merged. The most prominent issues in such restructurings and mergers are staff changes and organisational adjustment.
Building on this, industry experts have also carried out a great deal of research and refinement.
3. The human resources department must convey the company's goals to every level and every employee. For example, if you want to grow the business to 5 billion, you must not only tell them the goal but also explain the strategy — how you will get there through industry restructuring, acquisitions or technological innovation — and tell them exactly how it will work, so they truly grasp your strategy and rally around your company.
Building on this, industry experts have also carried out a great deal of research and refinement.
On the 3rd, Royal Dutch Shell acknowledged for the first time its responsibility for two oil spills that occurred in the Niger Delta in Nigeria in 2008. A company spokesman said more than one pipeline may have leaked, and technical teams had gone to the area to carry out repairs.
It is worth noting that technologies and standards in this field continue to develop and improve.
The News Agency of Nigeria reported that Delta State Governor Emmanuel Uduaghan said Shell's acknowledgement of responsibility sent a signal to other multinationals that they can no longer earn economic gains by damaging the environment as they have in the past, still less ignore the owners of this land and their inherent rights. [2]
