Analysis Case Study: Shell Oil Company

1939 Words Apr 6th, 2008 8 Pages
The following analysis evaluates the challenges faced by Royal Dutch Shell Oil Company involving their monumental proposed investment into their Nigerian operations. When global companies experience extreme criticism such as Shell, they are usually tasked with identifying optimum solutions to reverse the negativity. In addition to assessing the challenges, this analysis provides some potential strategies that can be implemented to resolve the issues within this case.

Problem Statement

Royal Dutch Shell Oil Company proposed to execute the largest industrial investment ever made in Africa. Their proposal was a response to three separate issues. However, there were problems with the proposal. A major problem was that two
…show more content…
The Shell joint venture included nearly 100 oil wells, two refineries, and a fertilizer plant all in the area known as Ogoniland.

The cultural and social issues involved in this case are extensive and quite complex. Nigeria was a British colony until 1960, and has a population of over 115 million, making it the most populous country in Africa. Nigeria's former colonization could have been a key reason why Shell Oil, a British company had such a vested interest in the country. Nigeria's government has the serious challenge with trying to unite 250 different ethnic and linguistic groups. An interesting issue with the Nigerian culture is that the country continued to be wiling to sell almost unlimited oil supplies, even though their reserves were not nearly as ample as countries such as Saudi Arabia, which is more prone to limit supplies.

Additional cultural and social issues included the problems that native Ogonis had with Shell Oil Company. Even though Shell used the land in this area to run their operations, very little of the revenues were reinvested to help maintain the land. As a result of the lack of attention given to Ogoniland, a group of natives led by author Kenule Saro-Wiwa, formed the Movement for the Survival of Ogoni People (MOSOP).

MOSOP began campaigning for a greater share of oil revenues to restore the environment of Ogoniland, and compensation for losses from
Open Document