Royal Dutch Shell FS

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Royal Dutch Shell FS

References

http://www.shell.com/global/aboutshell/who-we-are/our-history/the-beginnings.html
http://www.newworldencyclopedia.org/entry/Royal_Dutch_Shell

History

The Royal Dutch Shell was created by two companies, Shell Transport and Trading Company, and The Royal Dutch Petroleum. In 1890 Marcus Samuel founded the Shell Transport and Trading Company Ltd after his trip to the Black Sea [1]. It was during this trip that Marcus realized the great potential of oil trading. This interest arose from his visit to the petroleum extraction business based in Baku, Azerbaijan -at that time part of Russia. In his interest to trade and transport oil he ordered the construction of eight dedicated tankers, which were the first purpose tankers of its type ever made [2].

A few years later, Marcus decided to seek for other oil sources, since he was vulnerable by depending only on Russian oil producers. This took him to look into new horizons, which brought him into Borneo in the Far East. In this area he founded the Royal Dutch Petroleum, the biggest competitor in the region. Both companies joined forces to protect themselves against their bigger oil competitor, the Asiatic Petroleum Company [3]. In 1907 the two companies fully merged, which made them change their name to the Royal Dutch Shell. During the twelve years after the fusion, this company demonstrated the quality of the product and a fast-developing market for gasoline. This took them to open business into new areas and exploration began in countries such as Unites States, Mexico, Venezuela and Romania.


Competitors

The Royal Dutch Shell was considered one of the “Seven Sisters”. This term was given to the biggest seven oil companies that dominated petroleum industry from the mid-1940s and the 1970s [4]. Many of these companies merged and others sold out to the other companies that formed part of the Seven Sisters. Some of those companies continue being the main competitors to the Royal Dutch Shell group. They are: Exxon Mobil Corporation, BP P.L.V., Chevron and Total S.A. Exxon Mobil the biggest competitor to The Royal Dutch Shell[5].


Analysis

Royal Dutch Shell is Europe’s largest energy group and major player in the petrochemical industry. This company operates in 140 countries[6]. Their core business is centered in five methods: Gas and Power, Marketing and Refining, Production and Exploration, Chemicals, and finally Trading. Shell group is a powerful public company centered on the oil extraction. However, they have been looking for the diversification of their core business. They invested into new ventures that involved the extraction of energy through nuclear power, coal and other metals. None of these ventures were successful and were divested [7].

Some of the challenges that Shell group faces constantly are the potential lawsuits over environmental damage [8][9]. Through its history, this company has been involved with a number of controversies related with Global Warming and water spills. They are also blamed for negatively impacting public health and safety for workers and consumers [10]. Shell has acknowledged these problems, which has taken them to look for alternative energy solutions. This caused the interest in investment in ventures that involved the production of solar power, wind power and hydrogen power[11].

The embryonic renewable energy business remains relatively small in comparison with the hydrocarbon Extraction. Being the oil demand higher than renewable energy, this company has been constantly challenged by different activist groups and organizations to decrease the CO2 emissions and damage to the environment [12]. This is the reason that Shell group has been researching methods to reduce the impact of oil processing as well as its usage on the environment. They have come up with various systems that capture CO2 from power plants and refineries to avoid the damage of the environment.

Shell is extremely criticized for its negative impact on the environment, however, has also been well recognized for its successful social investment. Shell impacts society positively by providing free education and training to students interested in careers related with the energy extraction industry. It also aims to hire employees and purchase materials locally to empower the community and contribute with its development. Shell also work hand to hand with NGOs to create social ventures or startups concerned with climate change, biodiversity and renewable energy sources [13].