Shell Pakistan Limited (by Nouman Sabir) University of Sargodha Department of Commerce A Final Project of Financial Management by: Muhammad Nouman Sabir (Roll No: 28 – R / 08) Submitted to: Prof. Zahid Ali Akbar Topic: SHELL PAKISTAN LIMITED B.Com (HONS) Vth Semester / Regular
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Shell Pakistan Limited (by Nouman Sabir)
University of Sargodha
Department of Commerce
A Final Project of Financial Management by:
Muhammad Nouman Sabir
(Roll No: 28 – R / 08)
Submitted to:
Prof. Zahid Ali Akbar
Topic:
SHELL PAKISTAN LIMITED
B.Com (HONS)
Vth Semester / Regular
Shell Pakistan Limited (by Nouman Sabir)
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Shell Limited Pakistan
Shell Pakistan Limited (Shell Pakistan) is engaged in marketing of compressed natural gas
and petroleum. The company provides different types of lubricating oil and caters to
businesses and motorists. The company for businesses provides Shell cards, aviation
customer service, exploration and production, transport, liquefied petroleum gas and
industrial operations for power, automotive and sugar. Shell Pakistan for motorists
provides customer service, car care tips, shell Helix motor oil and Shell advance
motorcycle oil. The company also participates in motor sports like formula one and Moto
GP by tying up with Audi, Ferrari and Ducati. Shell Pakistan is headquartered in Karachi,
Pakistan.
Shell @ Glance
The second largest oil company in the country, Shell Pakistan has successfully positioned
itself as the preferred oil and Gas Company in Pakistan, leading the field in its
commitment to customer service, quality of products, safety and environmental
protection. Shell is a global group of energy and petrochemical companies. Our aim is to
meet the energy needs of society, in ways that are economically, socially and
environmentally viable, now and in the future.
Corporate History
Marcus Samuel, founder of the Shell Transport and Trading
Company. Almost 200 years ago, a London antique dealer
began importing sea shells from the Far East to supply a fashion
for exotic décor.
Marcus Samuel’s enterprise laid the foundations for a thriving
import-export business later run by his sons, Marcus Junior and
Sam. At this time oil was largely used in lighting and lubricants
and the industry was based in Baku, Russia, with its large reserves of high quality oil and
strategic natural harbor.
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Revolutionizing Oil Transport
The arrival of the internal combustion engine in 1886 led to a surge in demand for
transport fuel. Building on their shipping expertise, the Samuel brothers commissioned a
fleet of steamers to carry oil in bulk. They revolutionized oil transport with the maiden
voyage of their first tanker, Murex. In 1892, Murex was the first ever tanker to transit the
Suez Canal. The brothers’ company was named the Shell Transport and Trading Company
in 1897. It used a mussel shell as its logo.
Becoming Royal Dutch Shell
Shell Transport’s activities in the East, combined with a search for new sources of oil to
reduce dependence on Russia, brought it into contact with Royal Dutch Petroleum. The
two companies joined forces in 1903 to protect themselves against the dominance of
Standard Oil. They fully merged into the Royal Dutch Shell Group in 1907.
Shell changed its logo to the scallop shell, or pecten, which is used today. By the end of
the 1920s Shell was the world’s leading oil company, producing 11% of the world’s crude
and owning 10% of its tanker tonnage. The 1930s were difficult: the group’s assets in
Mexico were seized and it was forced to concede generous terms to the Venezuelan
government when it nationalized its oil fields.
Post – War Expansion
After the Second World War, as peace brought a boom in car use, Shell expanded into
Africa and South America. Shipping became larger and better powered. In 1947 Shell
drilled the first commercially viable offshore oil well in the Gulf of Mexico. By 1955 Shell
had 300 wells. In 1958 Shell began production in Nigeria.
The Oil Crisis
In 1969, Ghaddafi took power in Libya, cutting oil production and raising prices. Other
producers threatened to do the same and the Yom Kippur war of 1973 brought the crisis
to a head. Within weeks OPEC countries quadrupled the oil price and imposed a boycott
for two months. The effect on the West was economically catastrophic.
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Tapping New Resources
The 1970s were notable for Shell’s development of the oil fields in the North Sea and
South America - difficult and expensive to do, but crucial given the reduced supplies from
the Middle East. In 1978 Shell completed the Cognac drilling and production platform in
the Gulf of Mexico, the world’s tallest platform at 1,100 feet.
Worldwide Expansion
From the mid-1990s public scrutiny of the oil industry intensified as environmental issues
gained prominence. Shell was criticized over plans to dispose
of the Brent Spar platform and also ran into difficulties in
Nigeria. As the new millennium got under way, Shell
expanded in China and Russia. In 2005 Shell dissolved its old
corporate structure to create a single new company. Shell
remains one of the world’s major oil and gas companies. We
have interests in liquefied natural gas and gas to liquids
products; we help develop sustainable biofuels; and we are involved in wind projects.
History of Shell in Sub – Continent
The Shell brand name enjoys a 100-year history in this part of the world, dating back to
1899 when Asiatic Petroleum, the far eastern marketing arm of two companies: Shell
Transport Company and Royal Dutch Petroleum Company, began importing kerosene oil
from Azerbaijan into the subcontinent. Even today, the legacy of the past is visible in a
storage tank carrying the date - 1898.
The documented history of Royal Dutch Shell plc in Indo_Pakistan subcontinent dates
back to 1903 when partnership was struck between The Shell Transport & Trading
Company and the Royal Dutch Petroleum Company to supply petroleum to Asia.
In 1928, to enhance their distribution capabilities, the marketing interest of Royal Dutch
Shell plc and the Burmah Oil Company Limited in India were merged and Burmah Shell Oil
Storage & Distribution company of India was born. After the independence of Pakistan in
1947, the name was changed to the Burmah Shell Oil Distribution Company of Pakistan. In
1970, when 51% of the shareholding was transferred to Pakistani investors, the name of
changed to Pakistan Burmah Shell (PBS) Limited.
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The Shell and the Burmah Groups, retained the remaining 49% in equal proportions. In
February of 1993, as economic liberalisation began to take root and the Burmah divested
from PBS, Shell Petroleum stepped into raise its stake to 51%. The years 2001 -2 have seen
the Shell Petroleum Company successively increasing its share, with the Group now
having a 76% stake in Shell Pakistan Ltd (SPL)- an expression of confidence.
History of Shell Logo – Patent
For more than 100 years the word “Shell”, our Pecten emblem, and the distinctive red
and yellow colours have identified the Shell brand and promoted our corporate
reputation. These symbols have stood for the quality of our products and services, and
represented our professionalism and values around the world.
The word “Shell” first appeared in 1891 as the trademark for the kerosene that Marcus
Samuel and Company shipped to the Far East. The small London business dealt originally
in antiques and oriental seashells.
In 1897 Samuel formed The Shell Transport and Trading Company. The first logo in 1901
was a mussel shell. In 1904 a scallop shell, or Pecten, gave a visual element to the
corporate and brand name.
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Why the Pecten?
The company name was “Shell” and each of Samuel’s tankers carrying kerosene to the
Far East was named after a different seashell.
The Pecten may have been taken from the family coat of arms of a business associate, Mr
Graham, who imported Samuel’s kerosene into India and became a director of The Shell
Transport and Trading Company. Following a pilgrimage to Santiago de Compostela in
Spain the Graham family had adopted the St James’s Shell.
Over the years the form of the Shell emblem has changed gradually in line with trends in
graphic design. Designer Raymond Loewy created and introduced the current emblem in
1971.
Why Red and Yellow?
In 1915 the Shell Company of California first built service stations and had to make these
stand out from the competition. They used bright colours that would not offend the
Californians: because of the state’s strong Spanish connections they chose red and
yellow.
The actual colours have developed over the years, most notably in 1995 when a bright,
consumer-friendly Shell Red and Shell Yellow were introduced to launch our new retail
visual identity. The Pecten remains one of the greatest brand symbols in the 21st century.
Our Values & Customs
Our eight Business Principles are based on our core values and promote trust, openness,
teamwork, professionalism, and pride in what we do. We were one of the first global
companies to state and share our beliefs when we published our General Business
Principles in 1976.
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The Shell Code of Conduct
How should I react if a business partner offers me a gift? What is “insider information”
and how must I deal with it? Our Code of Conduct provides practical advice to our staff on
how to comply with laws and regulations, how to work with others and how to resolve
questions on business conduct.
Shell’s Slogan / Mission
“You can be sure of Shell”
Shell’s Objectivity for Customers
Shell is focusing on retailing, providing better facilities to customers, clean petrol pumps
constructing international standard petrol filling stations, good advertising campaigns
and mini markets.
Shell’s Vision
To Be the Top Performer of First Choice
Shell’s Aim
Creating a secure business environment, minimizing economic losses, and business
disruptions safeguarding the group’s integrity and reputations
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Shell’s Goal
The goal of the company is to position itself as the preferred oil company in Pakistan,
leading the field in its commitment to safety, customer service, quality and environmental
protection.
Shell’s Strategy
A strategy of corporation forms a comprehensive master plan stating how the
corporation will achieve its mission and objectives. It maximizes competitive advantage
and minimizes competitive disadvantage. The strategy of Shell is to grow internally by
expanding its operations through acquisition and strategic alliances.
Shell focuses to differentiate its products from competitors in the area of quality and
services.
Shell’s Policy
A policy is a broad guideline for decision-making that links the formulation of strategy
with its implementation. The policy of Shell is to make sure that the employees
throughout the firm make decisions and take actions that support the corporation’s
mission, objectives, and strategies.
People Diversity in Shell Organization
We employ around 101,000 people in more than 90 countries and territories. Our people
are central to the delivery of our strategy and we involve them in the planning and
direction of their own work. We create a work environment that values differences and
provides channels to report concerns.
We value communication and consultation with our employees, directly or via staff
councils or recognised trade unions. We encourage our staff to report their views about
our processes and practices safely and confidentially to managers or Human Resources
staff. Our global telephone helpline and website enable employees to report breaches of
our Code of Conduct and the Shell General Business Principles, confidentially and
anonymously.
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A diverse workforce and an inclusive work environment are vital to our
success and are aligned with our core values of honesty, integrity and respect for people.
The varied skills and experience of people from different cultures, gender and ages
benefits our business, helping us to better understand our customers across the world
and to build stronger relationships at a local level. Our focus on diversity and inclusion
also means customers, employees and partners choose us more often.
New Energy Future – by Shell
Everyone has a part to play in securing a new low-carbon energy future. At Shell we are
working to deliver cleaner energy and helping our customers to use less energy.
The world is shifting towards a new low-carbon energy future. It will be powered by a
range of sources, from cleaner fossil fuels to renewables. But to reach it, governments,
industry and customers must work together. Shell is already taking the first steps with
partners to tackle the challenges that lie ahead.
The energy transition will take time and fossil fuels will continue to provide the bulk of
energy for many years to come. We use advanced technology to open up new sources of
oil and natural gas and to squeeze more from existing resources.
Managing CO2 – We use a range of approaches to tap into the energy of natural gas,
the cleanest-burning fossil fuel. It emits 50-70% less carbon dioxide (CO2) than coal when
burnt to generate electricity.
We liquefy natural gas for shipping to markets from remote fields, and we turn natural
gas into cleaner-burning liquid transport fuels and other products. From 2012, we will
produce more natural gas than oil.
Low-carbon biofuels offer the most commercially realistic way to reduce CO2 emissions
from transport in the coming years. We are working to increase the sustainability of
today’s biofuels, and investing in the development of advanced biofuels.
Smarter Mobility – In a new, low-carbon energy future cars will be powered by a wide
range of fuels and energy sources, from advanced petrol and diesel to biofuels,
electricity, and even hydrogen.
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We are helping our customers use less energy. We are developing more
advanced fuels and lubricants to help drivers go further on less fuel, and we offer driving
tips to further improve economy. We also help build roads using less energy and with
fewer CO2 emissions because our technology allows asphalt to be mixed at lower
temperatures. With our customers and partners, Shell is helping to secure the new
energy future.
Shell Pakistan – General Business Principles
Shell Pakistan Limited General Business Principles govern how Shell Pakistan Ltd.
conducts its affairs. The objectives of Shell Pakistan Ltd. are to engage efficiently,
responsibly and profitably in oil, gas, chemicals and other selected businesses and 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.
We believe that oil and gas will be integral to the global energy needs for economic
development for many decades to come. Our role is to ensure that we extract and
deliver them profitably and in environmentally and socially responsible ways. We seek a
high standard of performance, maintaining a strong long-term and growing position in
the competitive environments in which we choose to operate.
We aim to work closely with our customers, partners and policy-makers to advance more
efficient and sustainable use of energy and natural resources.
Shell Worldwide Managerial Strategies
Shell is a global group of energy and petrochemical companies. Our headquarters are in
The Hague, the Netherlands, and our Chief Executive Officer is Peter Voser. The parent
company of the Shell group is Royal Dutch Shell plc, which is incorporated in England and
Wales.
Our strategy seeks to reinforce our position as a leader in the oil and gas industry in order
to provide a competitive shareholder return while helping to meet global energy demand
in a responsible way. In Upstream we focus on exploring for new oil and gas reserves
and developing major projects where our technology and know-how adds value to the
resource holders.
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In Downstream our emphasis remains on sustained cash generation from our
existing assets and selective investments in growth markets. Our core values of honesty,
integrity and respect for people form the basis of the Shell General Business Principles.
Shell by Numbers
+ 90 countries where we operate
~ 101,000 number of employees
2% amount of world’s oil we produce
3% amount of world’s gas we produce
3.1 million barrels of gas and oil we produce every day
44,000 Shell service stations worldwide
145 billion liters of fuel sold
>35 refineries and chemical plants we run
1 ranking by Fortune 500 in 2009
Our Businesses
Upstream searches for and recovers crude oil and natural gas. Downstream refines,
supplies, trades and ships crude worldwide, manufactures and markets a range of
products, and produces petrochemicals for industrial customers.
Projects & Technology manages delivery of Shell’s major projects and drives the research
and innovation to create technology solutions.
Financial Performance
Revenue $278.2 billion
Income $12.7 billion
Capital Investment $31.7 billion
Investment in R & D $1.2 billion
Fast facts for Sustainable Developments
$2 billion spent on CO2 and renewable energy technologies over the last 5 years.
In 2009 greenhouse gas emissions from facilities where we operate were
approximately 35% below 1990 levels.
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$13 billion spent in 2009 with locally owned companies in low and
middle income countries.
$132 million on social investment programmes in 2009.
Shell Pakistan Managerial Strategies
Shell Pakistan is divided into 8 functional areas i .e. Retail, Lubricants, Aviation,
Operations, Finance, Corporate, Human Resource and Commercial Fuels. It has played a
leading role in abridging the growing energy demand gap in Pakistan. We are
represented in all aspects of the upstream and downstream oil business in Pakistan - in
exploration both onshore and offshore, in refining, as well as a 26% share holding in the
white oil pipeline. Currently Shell in Pakistan is headed by Mr. Zaiviji Ismail bin Abdullah,
Chairman and Managing Director of Shell Pakistan Limited (SPL) and Chairman of Shell
Companies in Pakistan.
Shell has over 100 years of experience in developing the technology and services that
make us a leading provider of innovative and new fuels today. We were the first to
introduce retail visual identity on its forecourts. We strive to meet and exceed customer
expectations by delivering the best fuels and service to our customers at every site, every
visit, everyday. With a dynamic portfolio and a fast-growing retail network, the Shell
Brand is the most preferred brand amongst motorists across Pakistan.
Shell has always placed great importance on the health, safety and environment aspect
of the society it does business in. Safety is one of our top priorities, and we base our
policies on the belief that all accidents are preventable.
Market Share
PSO Shell APL Others
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Over the last decade, SPL has developed a robust programme of social
investment, which supports organizations and initiatives in the areas of health,
education, welfare, community development, heritage and environment.
In an increasingly competitive business environment, we at Shell Pakistan strive ever
harder to maintain operational excellence. We strengthen standardized and simplified
business processes and systems, and ensure top quality, right quantity and su perior
service to all customers across the country.
Shell’s Task Environment in Pakistan
Ø Customer
Ø Supplier
Ø Labor component
Ø Competitors
Ø Government
CUSTOMER - Our customers are high class, low class and also middle class, because every
class is used petrol for consumption.
SUPPLIER - Our suppliers are Pakistan refinery, National refinery and Attock refinery and
Dhodak refinery.
LABOUR COMPONENT - Labour is frequently available in Pakistan because of high
unemployment rate. So skilled and unskilled persons are available at lower wages rate.
COMPETITORS - Major competitors of Shell are PSO with petrol pumps and Caltex with
petrol pumps. But Shell Pakistan Limited operates in the Petroleum refining sector. Shell
Pakistan Limited also compete with three other petroleum refiners in Asia
Chennai Petroleum Corporation Limited
National Refinery Limited
Mangalore Ref & Petrochemicals Limited
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Stock Exchange Corporate Profiles (in Pakistan)
Shell Pakistan Limited (SPL) is a Pakistan-based company engaged in the marketing of
petroleum and compressed natural gas. It also blends and markets various kinds of
lubricating oils. The Company has investments in two non-trading subsidiaries, namely