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Royal Dutch Shell
Introduction
History
SWOT Analysis
Competitor Analysis
Strategic Alternatives
Future Outlook
Recommendations
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Introduction
Vision
To engage efficiently, responsibly and profitably in in
its products
To participate in the search for and
development of other sources of energy
To meet evolving customer needs and the world’s growing demand for energy
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Oil and Gas Exploration and Development
Product Diversity
Petrochemicals
Oil
Products
LNG (Liquefied Natural Gas)
Renewable Energy Sources
Hydrogen
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Business Operations
140 locations with 108,000 employees
Explores and produces
in 39 countries
Over 45,000 service stations
Environmentally conscious
Socially responsible
Encounter risks
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History
Shell Transport and Trading Company
London, UK in 1897
First
Bulk Tanker, the “Murex”
Royal Dutch Petroleum Company
The Hague, the
Netherlands in 1890
Royal Dutch Shell Group
Merger in 1907
60% / 40% interest
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Early Twentieth Century
Global Expansion
WW I
British and Allies’
largest fuel supplier
Provided 80% of Army’s TNT
Lost Production Properties
Mexico
and the Middle East
New Company Introduction
Shell-Mex Company
Shell Chemicals
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Great Depression
Cut labor and costs
Cartel agreement failed
WWII
Lost 87
ships
Lost Access to Romania
Government control of tankers
Reconstruction
Natural
gas production
Gulf of Mexico and Africa
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1950s through 1970s
Alliance with Middle East Gulf Oil
Royal Dutch Shell and Ferrari Partnership
Shell Chemicals developed
Herbicides, insecticides,
and liquid detergents
Controversy in South Africa
OPEC raised prices
Diversification of its products
Coal, metals, and nuclear power
All three failed to become successful
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1980s and 1990s
Largest producer of petrochemicals and leading
supplier of agrochemicals
Expansion through acquisitions and mergers.
In 1986, OPEC
lost power so prices went down
New investments
Solar heating, wind power, and hydrogen
Developed LNG gas business
Left Global Coalition in 1998
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The Twenty-First Century
World leader in biomass fuels.
Continued
expansion and diversification
Oil Reserve Overstatement
Resulted in reorganization into one
company
Became more Centralized
Sales Allocation
Oil refining and distribution make up about 78% in sales
Renewable Energies make up less than 0.4% of sales
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Shell’s Current Progress
Over a billion dollar investment in
renewable sources, hydrogen, and biofuels in past 5 years
World’s
largest investor in both solar and wind energy
20% reduction in carbon dioxide since 1990
$20 billion in damages
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Strengths
2nd among top oil companies in the world
2006
revenues of $318.845 billion and a net income of
$26.311 billion
Stock price went from $44.40 in September of 2001 to $66.91 in March of 2007
97 million shares of Shell Canada
Leader in the LNG (liquefied natural gas)
Invested into other energy sources
Hydrogen, LNG, Wind, Solar
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Weaknesses
Oil industry is very competitive industry
Depend on the
other oil companies
Depend on oil for success
No control over
up and coming alternative fuel companies
Alternative energy source venture has not yet paid off
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Opportunities
LNG becomes the main source of energy
Between 2005
and 2010, the demand for LNG is expected to
grow by 2% to 3%
One of Royal Dutch Shell’s renewable energy sources becomes the main source of energy
Wind, Solar, Hydrogen
There is a large untapped oil reserve in Brazil
The reserve is estimated to contain 18.1 billion barrels of crude oil
Largest known untapped oil reserve in the world
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Threats
Competition
ExxonMobil, BP, Chevron, ConocoPhillips
Nigeria’s deepwater's
World’s eighth largest oil
exporter and fifth largest oil supplier to the US
Royal
Dutch Shell used to be sole company working in the area, but ExxonMobil and Chevron are moving in
Depletion of the oil reserves
Fall in oil prices
Lose billions in seconds
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What is competition in oil industry?
Tough
Growing fast
Quality of
the product
Service provided
Activities of the company
Experience
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Royal Dutch competitors are…
Exxon Mobil
BP ( British Petroleum)
Chevron
Corp.
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Exxon Mobil
Number 1
Irving, Texas
40, 000 gas and service
stations
Reserves of 13.6 billion barrels of OE
Daily production
is 6.4 million barrels
Major producer of petrochemicals
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BP (British Petroleum) - # 3
Founded as Anglo
Persian Oil Company
London, UK
18.3 billion barrels of OE- reserves
2.8
million barrels of oil a day
Wells in Prudhoe Bay Alaska
Alternative fuel
Green washing
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Generated revenue for 2006:
Exxon Mobil ($ 339, 938
Millions)
Royal Dutch ($ 306, 731 millions)
BP ($ 267, 600
millions)
Chevron ($ 189, 481 millions)
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Chevron Corporation
Merger of Texaco Inc. and Chevron
San Ramon,
California
11.6 billion barrels of OE in reserves
2.6 million barrel
of oil each day
26, 000 gas stations
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Strategic Alternatives
Electricity sources:
Solar energy
Wind energy
Objective: environmentally friendly and
cost efficient!
Vehicle fuel sources:
Biofuels
Hydrogen fuel cell
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Solar power
Solar power is the technology of obtaining
usable energy from the light of the Sun.
Absolutely
friendly for the environment and predicted cost is 6 cents per kWh in 2010
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Wind power
Like old fashioned windmills, today’s wind
machines use blades to collect the wind’s kinetic energy.
Average cost 6-7 cents/kWh!
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Biofuels
Biofuel is any fuel that is derived from
biomass — recently living organisms or their metabolic byproducts,
such as manure from cows
An 80% minimumAn 80% minimum content by volume of materials derived from living organisms harvested within the ten years preceding its manufacture
E85 octane number is more than 100 and thus engines have more horsepower!!!
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Hydrogen fuel cell
Using electricity, it is easy to
split water molecules to create pure hydrogen and oxygen.
One big advantage of this process is that you can do it anywhere.
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Future Outlook
Rise in global energy needs
Oil, gas, and
coal will continue to meet the majority of global
energy needs
Unconventional ways to extract oil and turn to alternative sources
Shell will remain environmentally conscious
Increased profits with renewable sources
Produce products that will reduce CO2 emissions
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New cheaper, more efficient technologies
Increased demand for LNG
Result
in Shell having higher profits due to position as
world’s largest provider of LNG.
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Recommendations
Invest more money into R&D for alternative fuels
Buying
land rights in certain areas, or buying out smaller
oil companies
Combined with other oil companies
Sell out of the oil industry and start an automobile industry
See how oil prices affect the everyday consumer
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Recommendations
Continue to operate the way they are
Second largest
oil company
Leader in LNG
Already have money invested in alternative
energy sources
No outlook of a decline in the need for oil