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Blog costs Shell US$15 Billion

Article by Glen Frost, Editor, The PR Report

Yes, 15 billion. This is the claim of John Donovan, a UK blogger who campaigns against  the global oil producing giant Shell (full name Royal Dutch Shell) using his blog www.royaldutchshellplc.com .

Arguably the most powerful blog in the world dedicated to covering one company; and intrigued as to how the site developed such influence, Glen Frost met with the blog’s founders, John and Alfred Donovan, to get the full story.

EXTRACTS

The blog is now so popular, and trusted, the site appears on the front page of major newspapers (see pictures), and has ex?employees from Shell contributing regular articles

The Russian connection: the scoop that made the  Donovan’s blog famous

The Donovans had been collecting and publishing information online about Shell’s activities since 2001; this information dates back to the mid 1980’s and their former business relationship with Shell. Over the years, more and more people in the oil industry discovered the website, and the Donovan’ s have been swamped with information about Shell from both suppliers, contractors, insiders and former employees.

Some of this information concerned Shell’s activities in Russia from 1996. A Shell?led consortium (called Sakhalin Energy) and the Russian Government entered into a production sharing agreement. It was information on alleged environmental abuses by the consortium from the Donovan’ s that killed the deal. John Donovan said he suspected his information was the trigger but didn’t know for sure until Oleg Mitvol, a senior figure in the Russian Government, stated so in a media interview.

Asked by a journalist from PetroleumArgus, a trade magazine, who his sources were for the environmental abuse charges that Mitvol laid against the Sakhalin Energy consortium, Mitvol, then deputy head of Russia’s environmental watchdog Rosprirodnadzor, said he had “email correspondence between executives in Sakhalin Energy management from 2002.”

The compromising material had come from Donovan, owner and blogger of the anti?Shell website www.royaldutchshellplc.com, Mitvol said.

Donovan estimates the value lost to Shell is US$15 billion.

The Donovan’s website is a full frontal attack on Shell’s management and ethics. Shell has tried to shut the site down on the grounds that it uses the company name. However, the site www.royaldutchshellplc.com  makes no money, and, crucially, is registered in the USA, where laws on websites are weighted in favour of the domain owner.

“Our site receives up to 2.2 million hits a month; we want it to become a magnet for people who have a problem with the
company,” says Donovan.  “Many of the people using the site are Shell employees.

Blog publishes market sensitive information

Donovan publishes market sensitive information on the site, and he, and the website, are now quoted by esteemed news organisations like Reuters and The Financial Times. For example, Donovan  published information questioning the level of Shell’s reserves, in which the company was found to have inflated its oil and gas reserves by some 20% in 2003?04, which led to negative media headlines.

The picture (right; The Daily mail, UK 8th Sept 2009) shows how Donovan’s blog published details of staff cuts before Shell had announced them to the markets and the media.

Because of the blog, and the Donovan’s insistence on publishing all information he can verify about Shell, good and bad, John Donovan’s influence with the media is now global, instant and at a senior level – John lists the names of all the UK, US and global media outlets, their Editors or senior correspondents covering corporate news or the oil sector as his contacts.

Shell’s external PR advisors

A post on the Donovan’s website links to an article in a recently published book on corporate reputation and the rise of blog sites that attack, or expose, poor corporate ethics and illegal or dubious corporate activity, and what CEOs should do about such sites; http://www.shellnews.net/images/CorporateReputationAED.pdf ? the book is written by Dr Leslie Gaines?Ross, who, incidentally, was previously CMO of Burson?Marsteller USA, who manage Shell’s public relations.

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EXTRACT FROM BOOK REFERRED TO ABOVE: “REPUTATION LOSS – 12 Steps to safeguarding and Recovering Reputation”

One such empowered activist is arch Shell critic Alfred Donovan. No one was more surprised than Royal Dutch Shell PLC to learn that this 88-year-old British army veteran had purchased the Internet domain name www.royaldutchshellplc.com. The gadfly Donovan was a well-known, though underestimated, critic of the company. By acquiring the domain name, Donovan obtained the perfect platform to voice his criticisms of the oil giant. Who would have thought a decade ago that such an unlikely individual could stand up to a corporate powerhouse, waging a war of words against one of the world’s largest companies?

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