Royal Dutch Shell
Commonly known as just Shell, Royal Dutch Shell is the second largest publicly traded oil company in the world and the fifth largest publicly traded company overall. Shell had revenues of 368 billion U.S. dollars in 2010 and profits of $35 billion. It employs over 100,000 people. Shell has headquarters in The Hague, Netherlands and in London, England.
Unlike many of the supermajors, Royal Dutch Shell is not the result of a recent merger. The corporation can trace its roots back to 1907 when the Royal Dutch Petroleum Company and the Shell Transport and Trading Company merged their operations in order to compete with Standard Oil. Controlling interest in the company was split, such that 60% went to the Netherlands based Royal Dutch Petroleum Company and 40% went to the United Kingdom based Shell arm. This relationship can still be observed in the fact that the company claims dual headquarters in The Hague and in London.
Holdings and Industry Segment
Royal Dutch Shell has operations in well over 140 entries worldwide. Shell is the world’s third largest refiner of crude oil with 47 refineries and a daily output of 3.1 million barrels. Understanding Shell’s corporate structure is rather difficult. The company tends to be fragmented; however its major holdings include Royal Dutch Shell in Europe and Shell Oil in the United States.
In 2004, Shell was fined £17 million by the Financial Services Authority as a result of overstating its oil reserves. The company’s reserves are approximately 20 billion barrels, but were overstated at the time by about 4 billion barrels. Shell is active in all sections of the industry including, upstream, downstream, pipeline, marine, and service and supply. It has also ventured into coal, nuclear power, and renewable energy.
In 2010, shell posted an operating income of 35 billion USD and a profit of 20 billion USD. Nearly two thirds of the company’s income results from its upstream division while a little less than a third results from downstream operations. Other aspects of the company contribute little to overall income.
Relatively can we speaking, Shell has a clean environmental record. The biggest environmental concerns surrounding the company deal with aged pipelines in the Niger-Delta region. These pipelines frequently corrode and break, leading to local environmental degradation. Amnesty International has led several boycotts against Shell.
Shell has a very poor record of human rights violations. In 1996 several human rights groups brought cases against the company in order to hold them accountable for alleged violations in Nigeria. Shell was accused of collaborating in the execution of eight leaders of an indigenous tribe in Southern Nigeria that opposed drilling on tribal lands. Shell accepted no liability over the allegations, but agreed to pay $15.5 million to the tribe. Shell has also faced accusations of human rights violations over oil and gas fields in Ireland as well as Russia. In an effort to combat human rights violations, Shell has set up a global Internet based facility for whistleblowers. The service remains anonymous so as to protect whistle blowers from retaliation.