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Shell decides to “stick to its knitting”

Posting by former Shell Executive Paddy Briggs on the article “Shell defends continued focus on fossil fuel-paper“: Mar 2nd, 2010 at 11:20 am

Tom Peters seminal book “In Scarce of Excellence” was first published in 1982 and in it there were eight themes for success in business one of was “Stick to the knitting” – i.e. stay with the business that you know. It has taken Shell quite a while to acknowledge Tom Peters’ truism – ironically as there is no major corporation which has made more of a mess of diversification than Shell. Along the way there have been failed ventures in Coal, Mining, Nuclear Power, Electricity Generation, Forestry, Wind Power, Solar, Convenience Stores, Home insulation…

Take the eye of the ball to try and manage things for which you have no corporate memory and no distinctive competences and not only will you not make these things work – but you will also damage the core businesses. But the really venal behaviour was when so much of Shell’s corporate advertising was focused on the essentially trivial “Renewables” sector. Now Shell has come clean (!) and essentially walked away from this segment entirely. Biofuel has always been an interesting sector and there is a long history of biofuel use in some of Shell’s markets – especially Brazil. But in the main Shell has at last decide to “stick to its knitting” – and about time to!

Paddy Briggs website:http://www.brandaware.co.uk/

Shell Internet Censorship

“One of the principles underlying all of our work on the Web has been that we should be true to the spirit of New Shell. This means that we are seen to be open, listening, interested in the views of others…”: SHELL CENSOR – MARCH 1999

Shell Internet Censorship

By John Donovan

Printed below is a Shell internal email sent in March 1999. Shell was obliged to supply it to us in accordance with an application we made under the UK Data Protection Act. The “X’s” denote sections redacted (censored) by Shell, which includes the name of its author and apparently an extensive circulation list – 4 lines deep.

Although not mentioned in the still visible text, the author of the email was talking about the former “Tell Shell” Internet discussion forum once available on shell.com, until it was censored into oblivion.

Knowing of the involvement of Shell International General Counsel Richard Wiseman in the overt and covert censorship carried out on “Tell Shell” postings, we asked him if he was the author of the email. This was his reply yesterday, 22 February 2010:

Dear Mr Donovan,

I have no record or recollection of drafting or being involved in the drafting of the email you refer to.  Since you claim it was written more than 10 years ago, this is not surprising.  The style is not mine however and I do not believe that I am likely to have been the author.

As usual, I do not propose to comment otherwise on your draft and this should not be taken as acceptance of any of the assertions you make.

Regards
Richard Wiseman

Chief Ethics and Compliance Officer
Royal Dutch Shell plc
Shell Centre, London SE1 7NA

We accept what Mr Wiseman says. Of course, since Shell carried out the blanking out process on the email, it could reveal all of the censored information, but has not offered to do so, even though Royal Dutch Shell CEO Peter Voser and  Company Secretary Michiel Brandjes are fully aware of this article.

It is clear from the content that the author of the email was someone in control over the content of “Tell Shell”.

He or she claimed:

“One of the principles underlying all of our work on the Web has been that we should be true to the spirit of New Shell. This means that we are seen to be open, listening, interested in the views of others…”

Astonishingly, the author then goes on to try to provide a rationale behind the decision to remove 9 out of ten postings we made on “Tell Shell” and to say that if accused of censorship, Shell would argue that it had simply been trying to prevent us dominating discussions. The postings were also manipulated to make it less likely that forum users would visit our own website and be exposed to the full list of our allegations i.e. the truth.

Despite the claims of an open, censorship free discussion forum for lively debate, Shell did not want to entertain controversial postings. Hence the introduction of censorship on “Tell Shell”, providing an explanation on the forum whenever an unwelcome contribution was deleted.

Shell subsequently resorted to secret censorship, whereby postings vanished without trace or explanation. This underhand policy, involving Richard Wiseman, brought about what we described as: “The slow death of the Tell Shell Internet discussion forum”.  After the secret censorship was exposed, Shell “suspended” the forum, as it turned out, permanently.

Not content with censoring “Tell Shell”, Mr Wiseman also wanted us to censor our website. The following is from an email he sent to us on 11 November 2005:-

The extraordinary tolerance shown to your internet activities ought to demonstrate better than anything else the fact that we are uninterested in, and unmoved by, your current activities.  It is true that when your comments to “Tell Shell” overstep the bounds of honest comment and become vituperative or defamatory, we remove them.  In this context, I suggest that the image on

http://www.royaldutchshellplc.com/week44/vantheman3putinnovember2005.htm.

be removed as a matter of urgency.

Some extracts from our response to Mr Wiseman…

The implied threat in your email regarding the satirical comments directed at President Putin, betrays Shell’s real attitude to freedom of speech on the Internet.

Thank you for the official confirmation regarding Shell’s censorship of the “Tell Shell Forum”. Such suppression of free speech is directly at odds with statements made by Shell on the forum inviting feedback and lively open debate in “uncensored space”. Since we have never posted any bad language on Tell Shell, the censorship relates entirely to our criticism of Shell and our accurate account of past events, supported by documents in our possession.

Having admitted to Shell’s censorship policy on the Tell Shell Forum, your next comments imply that Shell has rights or influence over what is published on RoyalDutchShellplc.com. I would respectfully point out that although you can censor postings on your website, you cannot censor commentary posted on ours. You have not mentioned the censorship of postings by other contributors to Tell Shell offering constructive criticism, including former Shell employees (with one such posting deleted in an underhand manner). As far as I am aware, none of the postings critical of Shell contained any bad language.

EXTRACTS END

If you also read the information on the linked articles, it is clear that Richard Wiseman has been a driving force behind the machinations (trickery and censorship) over unwelcome critical postings on “Tell Shell”, which led to its demise and replacement by an unauthorized “Shell Blog”. I refer to the facility at royaldutchshellplc.com on which visitors can make positive or negative postings about Shell (or the Donovan’s), without being subjected to censorship.

In other words, people posting comments can rest assured that some self-serving lawyer is not controlling what is deemed sufficiently favorable to Shell to remain on display. Under the circumstances, perhaps Wiseman’s already lengthy job title should be expanded still further: Chief Censor, Ethics & Compliance Officer, Royal Dutch Shell Plc.

MAIN ARTICLE ENDS

RELATED INFORMATION

A posting made on our Shell Blog by former Shell executive Paddy Briggs was noted with disdain by a Shell employee in an internal email sent on 25 June 2007, who stated:

FYI, Paddy Briggs latest contribution – I think he should choose his friends more carefully…

In the absence of “Tell Shell” I think that this is possibly the best forum for those of us who care about Shell and have informed opinions about the company to share with others. The Donovans perfume (subsequently corrected!) a very useful function and, whilst I don’t always agree with them, I do admire them and certainly do not question their motives or their integrity.

(Since we know the above posting was made by Paddy Briggs, we have inserted his name where it was previously redacted. BTW, we have never met or even spoken to Paddy Briggs, who is now a Trustee of the Shell Contributory Pension Fund.)

A Shell internal email sent earlier the same day contained a more enlightened view about postings on our website. Its author said: “I support Mr Donovan’s right to free speech – even if it is anti-Shell.”

THE SHELL INTERNAL EMAIL SENT IN MARCH 1999

From:XXXXXXXXXXXXXXXXX

Sent: 23 March 1999 10:54

TO: XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
(E-mail)
Subject: FW: DONVAN

XXXXXXXXXXXXXXXXXXXXXXXXXXXXX

One of the principles underlying all of our work on the Web has been that we should be true to the spirit of New Shell. This means that we are seen to be open, listening, interested in the views of others and providing information which helps people to make their own minds up, not just thrust our opinions at them.

This is why, for several years, we have included links to the websites of organisations critical of Shell and have only removed contributions to the Website discussion fora if they were either:

a) abusive of individuals, or:

b) contained libellous material, where we didn’t wish to become involved in the legal implications of being a publisher:

Beyond that, we have deliberately not censored contributions, because this would simply have handed ammunition to our critics.

Before we launched the new campaign, we agreed that we should apply the same guidelines to the new campaign-related discussion fora. It was recognised that they might become targets for our critics, but if we claim to be interested in dialogue, then we need to be seen to be engaged in it and our arguments need to be seen to stand up for themselves.

In respect of Don Marketing, the monitoring of the fora quickly picked up that he had posted ten contributions and we decided to reduce it to one. If we were challenged, our argument would be that we had not censored, but had simply stopped him dominating discussions to the irritation of other users.

His one remaining contribution will be located in the Human Rights section at
http://www shell com/campaign/jssue/stage/1.1850.2.00.html

At the moment, this particular contribution of his is simply a link to his Shell Shareholders site. However, I have asked XXXXX to include Donovan’s text from one of his other postings so that people can see the essence of his case without having to go and enter his website and get the full list of his allegations. This will be done later this morning.

Regards

xxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxx

Shell International Limited, Shell Centre
London SE1 7NA, United Kingdom
Tel: xxxxxxxxxxxxxxxxxxxx
Email: xxxxxxxxxx

Shell says former Shell exec Paddy Briggs should choose his friends more carefully

A SHELL INTERNAL EMAIL DATED 25 JUNE 2007 SUPPLIED TO JOHN DONOVAN UNDER DATA PROTECTION ACT LAW

From:
Sent: 25 June 2007 13:57
To:
Subject: RE: DONOVAN – WEBSITE

FYI, xxxxxs latest contribution – I think he should choose his friends more carefully….

In the absence of “Tell Shell” I think that this is possibly the best forum for those of us who care about Shell and have informed opinions about the company to share with others. The Donovans perfume (subsequently corrected!) a very useful function and, whilst I don’t always agree with them, I do admire them and certainly do not question their motives or their integrity.

EMAIL ENDS

Shell redacted the name of the person who made the above posting on the “DONOVAN – WEBSITE” – royaldutchshelllplc.com. It was Mr. Paddy Briggs, the distinguished former Shell executive. In fact, we have never met or even spoken to Paddy.

This was his corrected posting.

In the absence of “Tell Shell” I think that this is possibly the best forum for those of us who care about Shell and have informed opinions about the company to share with others. The Donovans perform a very useful function and, whilst I don’t always agree with them, I do admire them and certainly do not question their motives or their integrity.

We don’t know why Shell took issue bearing in mind the ringing endorsement of the website by a Shell official just a few weeks earlier (email dated 20 March 2007)…

John and Alfred Donovan well known in UK / Hague. They perceive Shell played them and so have made it their mission to embarrass, belittle and criticize Shell, which they do quite well. Their website, royaldutchsellplc.com is an excellent source of group news and comment and I recommend it far above what our own group internal comms puts out.

We are grateful to Paddy Briggs and Shell for these kind comments.

Shell apologises for Poppy Appeal shambles

By Paddy Briggs

The important words in the media release below are “We apologise”! Well done Shell!

“Having reviewed our policy and listened to customers, we are happy to immediately endorse collection boxes for the Poppy Appeal at Shell petrol stations. We realise our customers have been upset by our original policy. We apologise. Our policy for some years now has been to have no collection boxes on site. The main reason for the policy was to reduce the risk of robberies that sometimes occur at site and hence minimise on-site risks for staff and customers, as we take HSSE very seriously. We support The Royal British Legion and the Poppy Appeal. We have collections in our offices. Furthermore we had already arranged with The Royal British Legion for a projection of poppies onto our building in central London to help publicise the Poppy Appeal.”

Shell shoots itself in both feet on Remembrance Day

By Paddy Briggs

The real question to ask about Shell’s unbelievably crass decision not to allow the sale of poppies at their petrol stations this year is at what level the call as made.

Ignore the statement from Shirley Cinco, at Shell’s “Customer Service Centre” in Manchester, that: “Rather than simply giving to worthy causes, Shell prefers to donate skills, time and knowledge as well as money. It is in the context of this strategy that Shell Retail will not be allowing any further charities, including the poppy appeal, to use its forecourt network to collect monies.” This is corporate speak of the worst kind and misses the real issue by many a mile. That issue is, of course, not about the decision itself but about who took it and about how it is perceived.

The British Legion even uses a photograph of poppies projected onto Shell Centre to publicise the value of corporate partnerships!

I have blogged myself on the subject of Remembrance Day and in doing so I was especially mindful of the fact that even to write about this subject is problematic. There is no more important social and cultural phenomenon than Remembrance Day in Britain – an importance that this year is especially significant given the appalling loss of life in Afghanistan.  And the Poppy is arguably just about the most powerful brand symbol here – certainly at this time of the year. There is no other charity that reaches the hearts and minds of the British population more than the British Legion and to risk alienating them is frankly absurd. Reasoned argument about Remembrance Day (which I tried to give in my Blog) should be fair enough. But you don’t take decisions that will turn war veterans against you!

The statement by Ms Cinco was not only the wrong thing to say and said at the wrong time but it was a statement made by someone far too low down the Shell in the UK food chain. If it really was necessary to take the decision not to sell poppies at petrol stations then the announcement about this should have been at a time when Remembrance was not so vividly in the public eye. It should have been made by somebody at a very senior level. And it should have been accompanied by something which would have turned a negative into a positive. Ideally it should have been a joint announcement with the Legion itself – indeed if the British Legion could not go along with the decision it should not have been taken. It’s that important.

Managing the brand and reputation of a big corporation like Shell is not easy but there are certain precepts that are inviolable. Most of these are commonsense – something that seems to be sadly missing in this instance. The “benefit” to Shell of not selling poppies in petrol stations must have been tiny – if there was one at all. But the damage to the company’s reputation is now very large indeed. In the coming days it will no doubt emerge how all this happened. If I was advising my old employer I would tell them simply to apologise, say it won’t happen again and make a thumping donation to the British Legion as a gesture of goodwill!

SOURCE ARTICLE

Comment Posted on Paddy Briggs Blogger News Article above…

Simon Morgan said,
in November 8th, 2009 at 4:07 pm

Shell Retail’s ban on the Royal British Legion (RBL) having poppies and collecting tins in any forecourts in UK must seem a little strange. I think Shirley Cinco (from the customer service centre in Manchester) rather misses the point when she says that Shell prefers to donate skills, time and knowledge as well as money. She seems to want to prevent members of the public supporting the RBL themselves, or allow decisions on this to be left to individual station managers, as Esso do.

I know that the North Sea oil platforms are protected by the Armed Forces, by the Royal Navy and Comacchio Group, Royal Marines but that may not be sufficient for Shell to allow the general public to support RBL on their property. With so many service personnel being killed and injured, the work the Legion does is vital, given the lamentable way the government treat our Armed Forces.

Given that our Armed Forces did so much to liberate Holland from the Nazis in the last war, and that the Legion is still helping those who fought and the families of those who died doing so, is Royal Dutch Shell in agreement that collections from the Poppy Appeal should not be allowed on Shell premises in UK?

As an Armed Forces Veteran myself, I feel inclined to buy my fuel elsewhere.

Simon Morgan

MORE INFORMATION ABOUT POPPY APPEAL BY THE ROYAL BRITISH LEGION

Paddy Briggs elected as a Trustee of Shell Contributory Pension Fund

It has come to our attention that former Shell executive Paddy Briggs (above) has been elected to serve the thirty-three thousand Shell pensioners in the UK as a Trustee of the Shell Contributory Pension Fund for four years commencing January 2010. In addition to the elected members, the Board of Trustees has seven Shell appointees, including UK country chairman James Smith and Clive Mather, the Chairman of the Board.

The manifesto on which Paddy Briggs was elected was:

“I joined Shell Mex and B.P. in 1964 and retired from Shell in 2002 having worked in Shell UK Ltd, Shell International and operating companies in The Netherlands, Hong Kong and Dubai. The Shell that most of us once worked for is long gone – as the “reserves” scandal and the recent furore over top executive remuneration have shown. Such events, coupled with the deteriorating financial position of many pensioners (which was exacerbated this year by a derisory 0.9% annual pension increase) illustrate the extent of the changes in Shell and confirm the urgent need for a strong defence of SCPF member interests by the one elected MNT Trustee directors. I was “First reserve” in the elections in 2007 and hope to go one better this time around. If elected I will do my upmost robustly to represent the interests of the Pensioner constituency and all other beneficiaries of the fund.”

We will quite understand that with Paddy concentrating on his new duties, he is probably unlikely to have the time to continue his insightful, candid and often entertaining contributions on this website. And he may also feel that it would be inappropriate to be an outspoken critic of Shell at a time when he has to work closely with senior Shell personnel in order to protect the interests of the members of the Pension Fund.  Over the years  Paddy’s  plain speaking and knowledge in his published articles, and his thoughtful comments posted on our Shell Blog, may have helped to persuade Shell UK pensioners that he is exactly the right person to represent them at this time. We wish him well.

Quite frankly, we have been surprised that Shell did not retain Paddy as a brand consultant given his continuing interest in Shell and invaluable marketing expertise. At least his fellow Shell pensioners will now benefit from the outstanding qualities which made him such a successful executive during his long career with Shell. And we are always here should Paddy feel that he needs a public platform again!

Arch-critic emails over 400 Shell senior execs

Richard Wiseman, Royal Dutch Shell Plc Chief Ethics & Compliance Officer (Photo supplied by him for display on this website)

EMAIL MESSAGE SENT BY JOHN DONOVAN TO OVER 400 SENIOR SHELL EXECUTIVES

Congratulations!

I am writing to offer our best wishes on your appointment/new title, as announced on our website royaldutchshellplc.com within the lists of Shell senior executive appointments we published on 22 June and 3 August.

The unauthorised publication of leaked Shell confidential information on our site has become a news event in its own right, regularly reported by The Wall Street Journal and other news organisations.

In a front page lead story in the Financial Times, our site was credited with breaking news of the restructuring plans of Peter Voser. Our role was acknowledged in many other news stories including, for example, the London Evening Standard which reported:

“Meanwhile, staff flocked to Royaldutchshell.com to attack the group’s management.”

Reuters also acknowledged “The Royaldutchshellplc.com website was the first to reveal news of the planned restructuring.”

Our insider sources know that we will protect anonymity.  If you ever feel the need to supply information, please contact me and I will advise on setting up secure communications.

SHELL BLOG

Comments posted by Shell employees on our “Shell Blog” have been quoted in many news articles.

If you want to keep in touch with uncensored grassroots opinion of Shell stakeholders, I would strongly recommend regular visits to the facility, as the comments are often insightful and reflect all shades of opinion. Why not post your own views? You can do so anonymously. What do you think about Shell executives being forced to reapply for their jobs? What do you make of the callous comment by Peter Voser that asking staff to reapply had been “an interesting exercise“?

You are also welcome to supply Shell related articles for unedited publication under your own name. We have published numerous articles on this basis from eminent Shell retirees, Shell executive Paddy Briggs, Shell International HSE Group Auditor, Bill Campbell, and Royal Dutch Shell Global Chief Petroleum Engineer, Iain Percival.

The Shell Blog has replaced “Tell Shell”, the official Shell Internet forum for open and lively debate, “temporarily suspended” (permanently) after we exposed the secret censorship of postings considered too open and too lively.

Shell General Counsel Richard Wiseman (now RDS Plc Chief Ethics & Compliance Officer) confirmed to us in an email dated 11 November 2005 Shell’s censorship of Tell Shell postings.

In the same email, Mr Wiseman stated:

The extraordinary tolerance shown to your internet activities ought to demonstrate better than anything else the fact that we are uninterested in, and unmoved by, your current activities

Richard Wiseman subsequently, at his own initiative, sent us an updated photograph of himself to display on our website.

In a further development revealing the truth, as opposed to the spin, we found out from documents obtained under the Data Protection Act that Shell set up a team in an attempt to counter our activities. The relevant internal email exposes the hostility towards us and the fact that it is is held in check by fear of reprisal on our part. If you find this difficult to believe, read the email.

So much for being uninterested and unmoved!

SAKHALIN-2

General David Patton resigned as Project Director of SEIC after we obtained a leaked email from him to his troops, which ended up as a major story in the FT newspaper. It was not however just a question of Shell being once again humiliated and its reputation damaged. Shell also lost a ton of money – literally billions of dollars – as a direct result of our intervention in the Sakhalin-2 project. The Russian government minister Oleg Mitvol publicly acknowledged our pivotal role in supplying leaked Shell internal email correspondence which turned out to be the only evidence he had to support a threatened $10 billion lawsuit against Shell. The evidence, which included high level Shell internal emails, cost Shell its majority stake in the venture.

THE FUTURE

Given the number of disgruntled employees certain to be generated from the latest transformation process, we anticipate even more leaks and revelations in coming months.

We look forward to our continued role as the unofficial Shell website for Shell employees and will contact you with news of interesting developments from time to time.

In the meantime, we wish you well in your new appointment.

Best Regards,

John Donovan

Debate flares over Shell/Motiva refineries

Yesterday we published an article authored by “Jo Blow”, a contributor whose real name is known to us.

The article stimulated the Shell Blog comments published below:

From Motivaman

Jo blow,
On the contrary, I did not take offense at all to your post. Actually it made me see that I was making mistakes in my post. I am very sorry. I have been posting about our managers/leadership, but I guess I need to be more specific in what I am saying. I know there are a bunch of great people that make up our management. A lot more good people than are bad!

If you knew me you would never expect I would be posting these things, I grew up Shell! Almost everyone I knew while growing up was shell managment. One of the main points I was trying to get across was that in the past 5 or so years Shell has been on the wrong path and needs some serious changes. The Shell I once knew would have never stood for the types of things going on now. Most of the people I knew are retired by now, but they still are in the loop. Most of them tell me they are glad they left when they did. I think Shell can be the greatest company in the world.

The management in the previous posts were mostly Motiva, Convent Managers. David, Curtis, Roxan, Connie, and a few others. Along with Mr. Purvis. These people are nothing but a bunch of liars and the people whom had the vision of Shell long ago are probably rolling in their graves because of the lack of respect by these people. They do not have any morals or ethics. They respect no one but themselves.

Contrary to what I may have led you to believe, but I was deeply saddened by the dismissal of almost all of the managers that were let go at Convent. These people were not let go because of performance, I would know because before these evaluations were even done, I was told the names of people whom would be let go. Most of these people did value others and did live up to the old Shell expectations.

I do see both sides of everything also, and do believe cuts were necessary, but the process was flawed and good people lost their jobs. I said a few years back that this run of “luck” would only last so long. The margins would only last so long and only the best, most efficient plants were going to survive. While we were making money hand over fist, things should have gotten fixed so when these time come, we would be ready.

I think they hit the wrong ones with the layoffs, they should have got the pirates and his maties. These people will ruin this company.

So what I am saying is I know things have to be done to run a business, I know that not all management are bad, and I am sorry if I offended any of the great people that did attempt to make a difference. I hope good things come to those good people.

Motivaman for president!

From Golden Triangle Watchman

Hey JoBlow…. Enjoyed your article… I respect that you can be that balanced in your assessment of the situation when in your own words” had a disgraceful exit” from one of the plants. You described the macro picture extremely well. What you didn’t mention is what happens with the leaders when the chips are down and they have to show true leadership? In the case of our piece of the company, that would be the failure we have seen with the one they call Tom Purves. He has lost all credibility and will never regain it. He lied, has cheated some out of their careers, and treats a core few like they are his peers…when he can’t even compete with his true peers on the leadership scale. Tom, how was the weekend up at the lake with the little boy they call Jeff?

So Jo, don’t take this personal. You are letting this so called leadership off by rationalizing this into the “big picture”.

Jo Blow, you wrote…

“I remain proud because I will and many others will always know the truth.”

What is the truth?

From Paddy Briggs

Jo Blow

Thanks for your excellent article and for your kind remarks about my recent piece on Shell and the downstream. My own interest is more beyond the refinery fence rather than what happens to the refineries. I also, perhaps simplistically, find refining very straightforward! In a vertically integrated structure refineries are cost centres not profit centres. Jan Blauu is right in a way to say that Shell is selling Stanlow because it is “unprofitable” – but he and Shell are both wrong to use the “P” word. Stanlow is a cost not a profit centre – in my view. The so-called “refiners margin” is a myth. The margin comes not from the refining activity per se but from the difference between crude costs and market realisations for produced products – both of which are market driven. Obviously refineries that are efficient, which can process a wide range of crudes, which have flexible upgrading capacity etc. will be preferable to simple refineries or high cost plants. But in essence refineries are manufacturing plants and as such cannot be seen as profit centres. The challenge is not to try and make a refinery make more “profits” but to try and make it lower unit cost or more efficient.

And a further comment from “Jo Blow”

To MotivaMan:  I wanted to clarify a point in one of your earlier posts, the item in question is quoted as

“Did I also mention that the salary employee in question’s father was a past Shell plant manager.”

Just a clarification, Mr. Townsend was the Plant Manager at Port Arthur refinery in the late 80 and early 90s, this time as you well remember was the waning years of Texaco and the early years of Star Enterprise.  I am sure this was a slight oversight.

Kind Regards,

Jo Blow

The writing is on the wall for Shell’s downstream business

null

The days when it was beneficial for an oil company to be vertically integrated with business all the way from the well head to the petrol pump are long since gone. Shell’s decision to move out of refining in the United Kingdom is logical and almost certainly the precursor of a complete withdrawal from the “downstream”.

In the past the “Seven Sisters” secured an almost monopolistic control of the production, transportation, refining, distribution and marketing of oil. This gave them incremental margins all the way along the supply chain and meant that they developed competencies at every step along the way. Although the production of crude oil involved wholly different skills and disciplines to, say, the marketing of automotive fuels and lubricants through petrol stations Shell and the rest were quite comfortable with the creation and management of organisations that had all of these competencies. Indeed when I joined Shell in the mid 1960s those of us in marketing did not see ourselves in any way as the poor relations in the Shell Group. But over the years this began to change.

Refining and especially the distribution and marketing of petroleum products are labour intensive activities. However the upstream is far more capital and technology intensive – given the scale of the business manpower levels are comparatively low in exploration and production. So when costs are in the spotlight it is the labour intensive downstream which is likely to suffer. The irony of this is that by reducing manpower and by centralising in marketing you inevitably move further away from the market and become less sensitive to local circumstances. All markets are local and to ignore this truism by taking decisions further and further away from the local market you open the door to others who do not do this.

The retailing of petroleum products through petrol stations was not only one of the core businesses of an oil giant like Shell it was also the public face of the company. But over the years successive managements have pulled away from this business area significantly in some markets. In Europe, for example, Shell has reduced its number of petrol stations substantially over the years and pulled out of some countries, like Spain, completely. This has opened the door for other retailers, especially supermarket chains like Tesco or Carrefour. Shell could have competed against these powerful general retailer brands but although they did try from time to time there was never sufficient top management support for a strong differentiation strategy. This was largely because differentiation costs money – to make your brand the preferred brand you have not only to offer the consumer more in the way of benefits but also to promote these benefits heavily in advertising and marketing communications. For many years now Shell has been unprepared to do this and whilst there are occasional flurries of activity (like the current campaign to promote “V-Power”) there has never been sufficient funds made available for long-term brand building. And if you cannot make a consumer offer that makes your brand be perceived as better then the only differentiator becomes price. And the more price becomes a weapon the lower the margins and the more marginal your retailing business becomes.

With Shell allowing much of its marketing business to become commoditised all of the emphasis turned not to offering the customer more but to minimising costs. Here Shell was up against supermarkets who were able to spread their fixed and variable costs over thousands of products – especially at hypermarket locations. Shell’s unit costs were always going to be higher than those of these giants – the writing for its retail business was on the wall. Add into the decision-making process the fact that top management in Shell spends little or no time on its marketing business – unlike that of say a Carrefour where retailing is the core business of the company. The directors of Shell spend virtually all of their time on upstream issues and projects – the marketing business, though very big, rarely gets a look in and is little understood by Shell’s board members. If it was important then at the very least Shell might consider having a non-executive director with a marketing/retailing background – but they have never even done this.

So over the next year or so – possibly even sooner – we can expect to see Shell dispose of its downstream business (including all its petrol stations and other such assets) completely. How they do this will be interesting to observe. One option would be to sell or float off the business as a going concern – and throw the Shell brand in with it. The upstream (etc.) could then trade under the traditional name “Royal Dutch”. A fully focused and entirely separate Shell-branded marketing business could then try and do all the things that “Royal Dutch Shell” has failed to do for years – especially by trying to give customers a reason to prefer their brand.

Retired Shell Group Auditor questions integrity of Jorma Ollila

By Bill Campbell (above), retired HSE Group Auditor, Shell International

On the subject of the integrity of Royal Dutch Shell Chairman, Jorma Ollila, raised by former Shell executive, Paddy Briggs, the information below was copied to Nokia yesterday, it should be self explanatory, if Nokia do not act they could find themselves guilty by association:

The attached information explains why Royal Dutch Shell along with the UK Oil Industry Health and Safety Regulator the HSE are currently being investigated by the Crown Prosecution Service (CPS) in Scotland.

Mr Ollila is very much aware of this and can explain the details.

I raised these matters a long time ago (in 2007) with Ollila at the time he joined Shell, and his reply is also attached.

The reply from Ollila so contradicts the facts determined by the prosecutors in their ongoing investigation that it puts Ollila in personal jeopardy as being complicit in covering up alleged criminal offences.

You need to bring this to the attention of your Board.

Ollila has committed his organisation in RDS to co-operate with the investigation by the CPS and the Police.

I have for some weeks been asking Ollila to issue a statement that he now accepts that the press releases made by Shell in June 2006 were false and misleading, ignored the findings of their own internal investigation, and were highly defamatory to me.

He has refused to do this although this repeated failure supports my case put to the CPS and Grampian Region (Aberdeenshire) Police that Ollila be considered complicit in the covering up of criminal offences by his Executive Directors, what is termed as an *accessory after the fact.  That is usually defined as – whoever, knowing that an offence has been committed, receives, relieves, comforts or assists the offender in order to hinder or prevent his apprehension, trial or punishment, is an accessory after the fact; one who knowing a felony to have been committed by another, receives, relieves, comforts, or assists the felon in order to hinder the felon’s apprehension, trial, or punishment

This has implications to the good reputation of Nokia because Ollila is in simple terms your employee, an employee who sits at the pinnacle of the governance process not only of Shell but of Nokia, and a fellow not shy at being critical of the wrongdoing of others.

I note your Values, Code of Conduct etc etc as per your web site and all I would ask of Nokia in this matter is to honour your public statements.

The best way to get to the crux of all this unholy mess is simply to ask Ollila would he be prepared to reiterate the statements made on his behalf and that of the RDS board, see attached letter in 2007? I think you will find he would not.

Is he prepared in any way, shape or form to defend his reputation by taking action against me for defamation?  Surely he would do this if they were of no substance.  Again the answer I am sure will be no.

So the longer Ollila pontificates the more deeply into the mire he is engulfed and this will have implications for Nokia if you do not make any efforts to protect your reputation.

Perhaps your Board can get Ollila to look at this more objectively and help him to comprehend that it is not just his reputation that is at risk, not just that of RDS also, but through association Nokia.

Bill Campbell

Further email to Nokia from Bill Campbell sent 5 August 2009

http://royaldutchshellplc.com/

Correspondence and articles in this website are picked up regularly by Industry watchers and investment groups, note the comments about Ollila made by me and others, if you wish to reduce the risks to your reputation you need to act timeously

Bill Cambpell