Abstract

The case discusses the problems that Anglo Dutch oil major Royal Dutch Shell was facing in a few of the markets in which it was operating as of 2014. The oil industry in general has been involved in international operations for over a century and over the years it had witnessed several risks associated with operating in several countries at the same time. Shell, with operations in more than 70 countries across the world, faced several problems due to its business practices, technologies, and the environment in which it was operating. The case looks at some of its pressing problems and the huge impact they have had on Shell’s operations. These include its operations in Nigeria, where it was the victim of theft and pilferage of oil which caused huge losses to it, its Arctic venture, where it faced technical difficulties as well as issues with local environment conservation groups, and its US shale operations, where despite huge investments, Shell did not get any returns. The case also discusses the problems that Shell was facing due to its presence in Russia and its future in the wake of sanctions imposed against the country due to the Ukraine crisis and the risk its operations in Iraq were facing due to the growing influence of the Islamic State, which was capturing oilfields across the country and was making its way towards Shell’s facilities. In the wake of mounting problems in the international markets, what step should the CEO Ben van Beurden take next?

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand Shell’s international operations
• Examine the challenges that Shell faced right from its inception, especially those pertaining to international expansion and operations
• Evaluate the reasons due to which companies like Shell continue to explore opportunities in locations that are deemed risky
• Understand different challenges Shell is presently facing in a few of its international markets
• Explore the ways in which Shell can minimize the risks associated with global operations while at the same time taking advantage of the opportunities these markets provide

Keywords

Shell, exploration, Nigeria, international markets, political environment, government policies, environmental issues, Niger Delta, sabotage, oil reserves, US shale, Arctic Exploration, developed markets