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Royal Dutch Shell in Nigeria: Operating in a Fragile State Essay

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Royal Dutch Shell in Nigeria: Operating in a Fragile State
Donna Wilson.
Raymond Bennet
July 28, 2011

Royal Dutch Shell in Nigeria: Operating in a Fragile State
Analyze the challenges facing the merger of the Royal Dutch Petroleum Company and Shell Transport and Trading, and provide recommendations how these should be confronted.
Shell Petroleum and Royal Dutch Petroleum Company merged in 1907 to become the Royal Dutch Shell Group. The merger led to various challenges. Because of the merger, the management of Royal Dutch Shell became highly complex. The company operates in over one hundred and forty countries, thus controlling and efficiently profitably running the corporation is complicated. Every region and country has its own limitations and difficulties that put the company’s strategy in challenge and forces it to change regarding the economic, political and social situations. This is a challenge that Royal Dutch Shell has experienced in Nigeria. Royal Dutch Shell is the largest gas and oil producer in Nigeria. However, ongoing social and political rife in the delta region continues to affect Royal Dutch Shell’s oil extraction attempts. Another challenge is the militant armed efforts of the Movement for the Emancipation of the Niger Delta, commonly abbreviated as MENDA attacks over the past have in many cases forced the company to suspend production and declare force majeure. Although oil firm royalty along with the sharing of federal oil revenues have provided state governments in the Niger Delta with bigger budgets than many countries in West Africa. Therefore, rampant corruption siphoned off a considerable amount of the revenue, thus, leaving very little for development in the midst of rising social unrest. Recommendations to these issues include: (1) the company should update its general business principles to include wording on sustainable compliance and development, and human rights; (2) introduce anti-corruption and bribery training...

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