Introduction to Brent Spar

Brent Spar Case Disposal Proposal Green Peace

Brent Spar

Brent Spar co-owned by Shell UK and Esso (50:50)

Loading and storage buoy for crude oil in the North Sea, 200 km northeast of the Shetland Islands (British waters)
463 feet high, and weighting about 14,500 tons Served from 1979 until 1991, ready for disposal

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Proposal for Disposal

For Brent Spar, two shortlisted options were identified: Horizontal on-shore dismantling Cost: 41 million Environmental risk since the buoy might break in shallow costal waters Deep water disposal Cost: 12 million Low environmental risk since no flipping is necessary Several independent studies confirmed the low risk of deep water disposal Shell UK proposed deep water disposal as Best Practical Environmental Option (BPEO), this met UK government approval. The European governments were informed and there was no official protest.
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Founded in Vancouver in 1971, Greenpeace has grown into the worlds largest environmental group, with its biggest section in Germany where it enjoys high acceptance and popularity. Greenpeace was informed about potential deep water disposal of Brent Spar and started stunt protesting.

Shell UK abandoned the plan for deep water disposal under the pressure from the public.
Later study confirmed that the original proposal by Shell UK was the right decision in terms of environmental implication.

Timeline

Independent Aberdeen University Study 1/2/94 Abandonment Plan submitted to UK Government 1/12/94

Jan 1991

Sep

May 1992

Jan 1993

Sep

May 1994

Jan 1995

Sep

May 1996

Jan 1997

Sep

Ceases Operating 9/91

Shell announces re-use as Norwegianferry quay 29/1/98 Decommissioningstudies Greenpeaceactivists on Spar Germanpublic protests Shell analyses alternative proposals 30/4/95 - 23/5/95 14/6/95 - 20/6/95 30/6/95 - 29/1/98

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Timeline (01/05/95 18/10/95)

UK Government announces approval and contacts 12 nations 1/5/95 UK Government grants disposal licence 5/5/95 German Ministry of the Environment protests 9/5/95 Independent UK scientists state support 13/5/95 Spar towed to disposal site 11/6/95 Chancellor Kohl protests at G7 15/6/95 Northen European governments indicate opposition 20/6/95 UK scientific debate supports Shell 30/6/95 Norway grants storage permission 7/7/95 Shell UK commissions independant Norwegian audit 12/7/95

Greenpeaceadmits inaccurate claims 5/9/95 UK scientists reiterate support 11/9/95 Independent audit results endorse Shell competence 18/10/95

May 1995

Jun

Jul

Aug

Sep

Oct

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Brent Spar Stakeholders

Shell
Decommissioning option is viable Complies with regulations Supported with research

Greenpeace

Environmental protection Look for high profile, highly visible targets Media attention Public support Increase in donations

General Public
UK Universities
Research disposal methods

Brent Spar Stakeholders

Trust in Greenpeace Environmentally conscious Anti oil company moral

UK Government
Protect environment Public sentiment

German Government
Public sentiment

SWOT Analysis
Opportunities(External)
1.Explorenewoilfields 2.ExploreSustainableenergysource 3.Establishpartnershipwith stakeholders

Threats(External)
1.Industryregulations 2.Interestgroupadvocating environmentalissues 3.Increasednegativepublicopinion

Weaknesses(Internal) Strengths(Internal)
1.LeaderinGlobalOilIndustry 2.Politicalalignment 3.Integratedupstreamand downstreamprocesses 4.Brandimage 5.Strongassetbase 1.Operatinginunstableenvironment 2.Uncoordinated,decentralisedstructure

Strategic Fit
Environment
Increased consciousness for environmental issues by the diversified stakeholders Growing impression of major oil companies as monopolist, and high-profit seekers Growing demand for energy

Strategy
Sustainable long term profitability Renewable energy sources Safety & environmental consciousness Social & Community responsibility

Core Competence
Innovation Technology Experts in oil rigs and highly developed operations

Organization
Decentralised organisation structure Highly skilled employees Wide geographical locations Strong company values Well structured recruitment and development process and learning organisation
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Risk Assessment Chart

Criteria

Risk Identification (Risk Chart)

Risk Assessment & Ranking

Risk Reduction Strategies

Crisis Prevention Simulations

Crisis Management Environmental Impact Financial Impact Health & Safety Engineering Complexity

S W O T

Risk Criteria

Stakeholder involvement
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Scenario Planning
Scenario Planning seeks not to predict the future but to envisage the alternate views of the future in the forms of distinct configurations of key environmental variables (Schoemaker, 1993)

The steps involved in the Scenario : Elaborate the scenarios - picking out elements, likelihood or plausibility, constructing coherent scenarios from the elements Analysing the consequences - If this comes true, what happens to us? Analysing the implications now - What should we do know to prepare for this?
Strategic Decisions

1 2 3 4
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Key Decision Factors Environmental Forces Decision Implications

Scenario Logics

Crisis Scenarios
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Possible Outcomes & Impact

PossibleOutcomes DecommissioningofBrentRigatSea DecommissioningofBrentRigon Land Impact(Low/High) High High

Governmentobjecttothe decommissioningofBrentRigatSea
Publicopinionagainsttheselected decommissioningplan

Med
Low

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Combining outcomes into scenarios

High Regulation change Brent decommissioning location Technology breakthrough Low Brand damage or public outrage High

Uncertainty

Government Regulation on decommissioning at Sea Unable to sway public opinion Low

Control
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Crisis Management
Unanticipated Crisis

Cost to organization

Anticipated Crisis

Crisis

Identification Begins

Continuing Reputational Impact Time

Phases

Anticipation
Anticipation Threat of the activists Lack of understanding of activist perspective Decommissioning plan was decentralised and not communicated to the relevant

Uncontrolled

Controlled

Reputation Restoration
Post-Crisis Increase Stakeholder involvement Improve media & Communications strategy Amended corporate values to include the learning Spar was used to build a quay

Identification Focused on technical issues losing sight of the important issue public opinion & global brand protection Flawed communication strategy Mixed communication