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Project Report on Shell Pakistan
HISTORY OF OIL INDUSTRY IN PAKISTAN

1947

At the time of independence there were no more than few companies, it was the case with oil industry. There was no oil refinery in Pakistan except a very small at Rawalpindi. At that time the total requirement of Pakistan was 0.4 million tons. There were four foreign and one local company in Pakistan these were: BURMAH OIL BURMAH OIL CALTEX ESSO ATTOCK OIL Market petroleum products. Oil extracting company. Market petroleum. Marketing. Oil exploration company.

1952 Burmah discovered natural gas at Sui in Baluchistan named as Sui gas. Before partition Railways was on coal, but at the time of partition India refused to provide coal, so railways has to convert on diesel oil. 1955

The consumption of oil shot up by 3 million tons. 1960 Consumption in East and West Pakistan shot up by 4.2 million tons OGDC was established. Government asked the foreign companies to set up a refinery, they agreed with following conditions:  Refinery should in Karachi  Capability will be 1.5 million tons.  They will provide crude to refinery only. Government also permitted a Pakistani company, Pakistan National Oil. 1962 Pakistani refinery came into being. It only produced petroleum but not lubricant. So PNO established a plant at Korangi (Karachi) for lubricating oil with a capacity of 0.5 million tons. 1964 Dawood petroleum was established. 1965 On September 1965 India attacked Pakistan so the oil reserves came to lowest and government asked the foreign companies to bring crude refined and provide the army

but they refused. PNO was asked to do so, it brought the oil and the need of army was fulfilled. These companies annoyed the government and it turned against them. 1970 In 1970, when 51% of the shareholding was transferred to Pakistani invertors. The name of the company changed to Pakistan Burmah shell (PBS) limited. The shell and Burmah groups of retained the remaining 49% in equal proportions. 1971 Again the war broke between Pakistan and India. All crude oil was imported from other countries and its storage was concentrated at Kemari Terminal Karachi. The enemy blasted whole storage point. So the need to spread the storage points in the whole country was felt. The 5 foreign companies were asked to do so but they refused because of cost, then government decided to establish storage places itself. 1973 There were energy crises through the world. Almost all of the countries nationalized the oil companies. Everyone realized that petroleum products were very essential. 1974 Pakistan storage Development Corporation was established. 1976 PSO was found in December 1976 as a result of merger of here oil companies:

1. Pakistan National Oil. 2. Premier Oil Company. 3. ESSO. 1993 In February of 1993, as a result of a decision by Burmah oil to divest in Pakistan and the deregulation policy of the government, the shell petroleum company bought the shares of Burmah Oil Company and 2% shares from the market and become the major shareholder in the shell Pakistan limited (SPL).

INTRODUCTION OF SHELL PAKISTAN Ltd.

HISTORY Shell is a multinational company and in Pakistan it is operating as a public limited company by the name “Shell Pakistan Ltd. Shell is a superior brand name with a 100 year history in this region, infect the company is still in possession of a fuel storage tank from 1899. However, the documented history of the Royal Dutch/shell group the Indo-Pak subcontinent dates back to 1903 when a partnership was struck between the shell transport and trading company and the Royal Dutch petroleum company to supply petroleum products in Asia. In 1928 to enhance their distribution capabilities, the marketing interests of the Royal Dutch/shell group and Burmah Oil Company by limited in India were merged and the Burmah

which will transform the company by the turn of the century. Shell launched a change programme. the shell petroleum company bought the shares of Burmah Oil Company and 2% shares from the market and become the major shareholder in the shell Pakistan limited (SPL). has been the change in the company’s culture to reflect the values which shell internationally believes will bring commercial success through a greater focus on the customers. leading the field in its commitment to safety. as a result of a decision by Burmah oil to divest in Pakistan and the deregulation policy of the government. GOAL OF SHELL The goal of the company is to position itself as the preferred oil company in Pakistan.” COMPANY’S OBJECTIVE Shell is focusing on retailing. VISION OF SHELL To Be The Top Performer Of First Choice. The name of the company changed to Pakistan Burmah shell (PBS) limited. with major implications for the petroleum industry in Pakistan. More subtle. The shell and Burmah groups of retained the remaining 49% in equal proportions. AIM OF SHELL Creating a secure business environment.shell oil storage distribution and storage company of India was born. clean petrol pumps constructing international standard petrol filling stations. the name was changed to the Burmah shell oil distribution company of Pakistan. when 51% of the shareholding was transferred to Pakistani invertors. customer service. COMPANY’S SLOGAN/MISSION “You can be sure of Shell. After the independence of Pakistan in 1947. minimizing economic losses. good advertising campaigns and mini markets (select). and business disruptions safeguarding the group’s integrity and reputations. quality and environmental protection. In 1970. In February of 1993. STRATEGIES OF SHELL . but equally uncompromising. providing better facilities to customers.

3. mediocre strategies but execute them competently. Implementing and executing the chosen strategy efficiently and effectively. POLICIES 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. STRATEGIC MANAGEMENT There is a strong case of linkage “good management “to how well managers craft and execute strategy.A strategy of corporation forms a comprehensive master plan stating how the corporation will achieve its mission and objectives. 5. and initiating corrective adjustments in long-term direction objectives. potent competition. Evaluating performance reviewing new developments. objectives. Converting the strategic vision and mission into measurable objective and performance targets. 2. Some managers design shrewd strategies but fail to carry them out well. Deciding what business the company will be in and forming a strategy vision of where the organization needs to be headed. and THE FIVE TASKS OF STRATEGIC MANAGEMENT The strategy making. It maximizes competitive advantage and minimizes competitive disadvantage. and strategies. The strategy of Shell is to grow internally by expanding its operations through acquisition and strategic alliances. strategy-implementing process consists of five interrelated managerial tasks. Shell focuses to differentiate its products from competitors in the area of quality and services. Others design situation internal problems. Both performance despite unforeseeable events. 4. 1. . Crafting a strategy to achieve the desire results.

how to auto compete rivals. STRATEGY AND STRATEGIC PLANS Developing a strategic vision and mission. it is common for key elements of company to emerge in bits and pieces as the business develops. and potential moves in the planning stage. when technological breakthroughs occur or when crises strikes and managers are forced to makes a radical strategy alteration very quickly. and the competitive moves and internal action approaches to be used in achieving the targeted results. unexpected opportunities or threats. they constitute a strategic plan. plus the constant bubbling up of new proposal encourages managers to modify planned actions forge “unplanned” . Except for crises situations (where many strategy moves are often made quickly to produce a substantially new strategy almost overnight) and new company starts . are quite normal. its short range and long-range performance targets. First in one department or functional area and then in another. Because strategy move and new action approaches are ongoing across the business. On occasion. how to satisfy customers. They map out where the organization is headed. WHAT DOES A COMPANY’S STRATEGY CONSIST OF? Company’s strategies concern how: how to grow the business. quantum changes in strategy are called for when a competitor makes a dramatic move. An organization’s strategy forms over a period of time and then reform the number of changes begins to mount.WHY COMPANY STRATEGIES EVOLVE Frequently fine tuning and tweaking of a company strategy. how to achieve strategic and financial objectives. how to response to changing market conditions. establishing objectives. Annual strategic plan seldom anticipate all the strategically relevant events that will transpire in the next 12 months. Together. Unforeseen events. Current strategy is typically a blend of holdover approaches fresh actions and reactions. how to manage each functional piece of business. and deciding on a strategy are basic direction-setting tasks.ups (where strategy exists mostly in the form of plans and intended actions).

either from the inside or outside or both. The most important fits are between strategy organizational capabilities. between strategy and reward structure between strategy and internal support system. strategic management is a process filled with motion. The strategy implementer’s agenda for action emerges from careful assessment of what the organization must do differently and better to carry out the strategic plan proficiently. It cut across virtually all facts of managing and must be initiated from many points inside the organization. Depending on the amount of internal change involved.reactions postponing the redrafting of strategy until its time to work on next year’s strategic plan is both foolish and unnecessary. full implementation can take several moths to several years. and between strategy and the organization culture. The strategic implementing task is easily the most compacted and time-consuming part of strategic management. Nothing about the strategic management process is final all prior actions are subject to modification as conditions in the surrounding of environment change and ideas for improvement emerge. WHY STRATEGIC MANAGEMENT IS AN ONGOING PROCESS Because each one of the five tasks of strategic management requires constant evaluation and a decision whether to continue or change. The stronger the fits the better the execution strategy. Each manager has to think how much internal practices deviate from what the strategy requires and how well strategy and organizational culture already match. Changes in the organization situation. management must supervise all the details of implementation and apply enough pressure on the organization to convert objectives into results. fuel the need for strategic adjustments. a manager cannot afford distraction. As needed changes and identified. . STRATEGY IMLEMENTATIONAL EXECUTION The administrative is to create “fits” between the way things are done and what it takes for effective strategy execution.

The advantages of first-rate strategic thinking and conscious strategic management include: 1.The task of evaluating performance and initiating corrective adjustments is both the end and the beginning of the strategic management cycle. solution closely enough to know what kind of strategic changes to initiate. Simply said. fundamentals of strategic management cede to drive the whole approach to managing organizations. Changing external conditions add further impetus to the need for periodic revisions in a company’s mission. objective. Strategy managers must stay close enough to the situation to detect when changing conditions require a strategic response and when they don’t. THE BENEFITS OF A “STRATEGY APPROACH” TO MANAGING Today managers have to think strategically about their company’s position and impact of changing conditions. strategy and implementation will be needed sooner or later. and initiate adjustments. new opportunities and threatening development. Making managers more alert to the winds of change. But occasions for major strategic re-orientation do arise some time prompted by significance external development and sometimes by sharply sliding financial performance. It is their job to scene the winds of change. grant that revision in mission. recognize changes early. Providing better guidance to the entire organization on the crucial point of “what it is trying to do and to achieve.” 2. It is always incumbent on management to push for better performance to find ways to improve the existing strategy and how it is being executed. They have to monitor the external. Performance adjustment objective. The match of the external and internal events. strategy and approaches to strategy execution. . Adjustments usually involve fine-tuning.

4. The slow development due to political instability but now the present government is very stable to grow because govt. ECONOMIC FORCES: - . LEGAL FORCES: Legal component consists of legislation that has been passed.3.g. Providing managers with a rationale for evaluating competing budget requests for investment capital and new staff a rationale that argues strongly for steering resources into strategy-supportive results producing areas. This component prescribes rules or laws that all members of society must follow e. Helping to unify the numerous related decisions by managers across the organization. labour policy. is providing incentives to different industries. Each government that came in power condemned the planning work done by the precious government. employees’ social security scheme 1965 Partnership Act 1932 company 1984. Creating a more proactive management posture and counteracting tendencies for decisions to be reactive and defensive. 5. EXTERNAL ENVIRONMENT For the analysis of external environment following are important factors (PEST):  Political –legal forces  Economic forces  Socio cultural forces  Technological forces POLITICAL FORCES: In Pakistan there are rapid changes of Government since poison.

The balance of payment position in Pakistan is -3.3% Growth Rate (2000E): 1. They are using modern technology like care. Poverty and high population growth have aggravated. motor cycle for traveling. machinery and transport SOCIO CULTURAL FORCES: In Pakistan population is increasing and social values are also changing so the demand of fuel consumption is also increasing. (20/1/02): U.1 Rupee rupees billion 2. and to a certain extent. leather manufactures Major Import Products: Petroleum. rice. Much of the country suffers from a lack of potable water due to industrial waste and agricultural runoff that contaminates drinking water supplies. vehicle emissions.5%. and Saudi Arabia Major Export Products: Raw cotton and textiles. People are coming from rural areas to cities and their life style and values are also changing. Japan.6% (2000E): 11.In Pakistan GNP is 5.7. Germany. caused.5 (2000E): -$3. The employment rate is 34.0 (2000E): $38. chief among them being water pollution.$1 market Rate exchange = rates.1% Balance Balance Debt (2000E): -$3. Pakistan's attempt to raise the living standards of its citizens has meant that economic development has largely taken precedence over environmental issues. United Kingdom.5 billion billion billion Major Trading Partners: United States.94 million. these environmental problems. and industrial activity has contributed to a number of environmental and health hazards.S. 60.5 2000E): $52.41 and inflation rate is very high which is 12.8% (2001E): (2000E): 15. ECONOMIC OVERVIEW Currency: Pakistani Average Gross Real Inflation Current Merchandise Total Account Trade External Exchange Domestic GDP Product Rate (GDP. Unchecked use of hazardous chemicals. .

TASK ENVIRONMET  Customer  Supplier  Labor component  Competitors  Government CUSTOMER: Our customers are high class. But Shell Pakistan Limited operates in the Petroleum refining sector. efficiency.TECHNOLOGICAL FORCES: Pakistan environment regarding the technology is not very advance due to the lack of resources. Shell Pakistan Limited also compete with three other petroleum refiners in Asia . LABOUR COMPONENT: Labour is frequently available in Pakistan because of high unemployment rate. and technological advances are going to play an increasingly important role in meeting demand for clean energy. So skilled and unskilled persons are available at lower wages rate. because of its environmental qualities. National refinery and Attock refinery and Dhodak refinery. low class and also middle class.Natural gas. COMPETITORS: Major competitors of Shell are PSO with petrol pumps and Caltex with petrol pumps. SUPPLIER: Our suppliers are Pakistan refinery. because every class is used petrol for consumption.

Operations. and Human Resources. Commercial. Retail. Finance.  Shell Pakistan is divided into five functional areas i.  The organizational Culture of the Shell is based on commitment of the top management for quality. employees. But now the company is trying to reduce the number of petrol filling station because they do not need that .   Chennai Petroleum Corporation Limited National Refinery Limited Mangalore Ref & Petrochemicals Limited INTERNAL ENVIRONMENT   Organization Structure Organization Culture ORGANIZATION STRUCTURE: -  Shell is the largest multinational organization with many product lines. innovation. Employees tend to be functional specialists organized according to market/product distinction.  Management attempts to find synergy among divisional activities through the use of committees and horizontal linkages. and performance.  Decision of major impact result from strategic plans made by organizational staff ORGANIZATION CULTURE: -  Quality is the key ingredient and commitment to quality is share by executives and workers.e. local community. ORGANIZATIONAL RESOURCES Shell has established 1404 petrol filing station in different areas of Pakistan.

Up till now about 50 pumps are renovated in deferent cities of Pakistan. Their market size is very large. It was also the first company to introduce the concept of Mobile Training Unit (MTU) for the purpose of training the workers and introducing quality and quantity control units. Therefore. It provides suggestive literatures to its customers while launching a new product such as Helix super and Helix Lubricant etc. which check the quality and quantity of motor gasoline at various filling stations. INNOVATION THE KEY TO OPPORTUNITY Innovative use of technology is the key to other possible opportunities related to remote gas reserves that remain stranded due to the prohibitive cost of development.filling station. NUMBER OF DEPOTS IN PAKISTAN Shell has got 14 depots in different areas of Pakistan. FINANCIAL: - . MARKET LEADERSHIP DUE TO INNOVATION Shell is considered to be the market leader in innovation. TYPES OF RESOURCES 1) Marketing 2) Finance 3) Research and development 4) Human resources 5) Operation 6) Information System MARKETING Shell has strong distribution channels. marketing staff is very efficient and their main objective is satisfying the customer and people have the brand loyalty. It was the first among its competitors to introduce (rainbow) jet wash and (Proserv) branded oil change facility. It was the first company to get legal approval to operate Mini-Market. whose monthly sales are less than 500000 liters.

the Price / Earnings ratio is 5.45 billion Pakistan Rupees. Shells have 20. This is slightly higher than at the end of 2000.3% market share in 1996.996 billion and profit after tax was recorded as Rs..1056 million.68 billion Pakistan Rupees. Shell Company also motives its employees and provides different incentive on their good performance OPERATIONS: Operation of the company is based on continues improvement is the acknowledgment that workers experiences and knowledge can help to show production problem and contribute towards tightening variances and reducing error. the company's long-term debt was 63.51 million tones of petroleum products from July 2000 to June 2001. at only 0. Revenue in the same period amounted to Rs. when Shell Pakistan Limited had 12 days of sales in accounts receivable. HUMAN RESOURCES: Shell provides the training facility to their labour and management to create the good relation to their employees. earnings per share totaled 30. Shell has a market share of approx 21% for all petroleum products in Pakistan.12 Pakistan Rupees per share. Earnings per share fell 18. Pakistan recorded annual sales of 3. As of June 2001.7% in 2001 from 2000. INFORMATION SYSTEM: - .48.90 million Pakistan Rupees and total liabilities (i. Thus. The long-term debt to equity ratio of the company is very low.01.e. all monies owed) were 6.74. which is equivalent to 14 days of sales. Shell spends on research and development more than most in the other companies to differentiate the performance of its products to its competitors. COMOPANY’S RAPID GROWTH: Shell has grown rapidly since 1993 and its volume of sales has rapidly increased in all the areas of Pakistan. RESEARCH AND DEVELOPMENT: Research and development strategy deals with product and process innovation and improvement.During the 12 months ending 6/30/01. As of June 2001. the accounts receivable for the company were 2.

9%. the company's sales increased at a faster rate than all three comparable companies.12 billion Pakistan Rupees. It provide aid in environmental scanning and in controlling activities.581 per employee.06 billion). it can also used as a weapon in gaining competitive advantage. While Shell Pakistan Limited enjoyed a sales increase of 76. Shell Pakistan Limited currently has 608 employees. the other companies saw smaller increases: Chennai Petroleum Corporation Limited sales were up 29. During 2001. SALES COMPARISONS (FISCAL YEAR ENDING 2001) . when the company's sales were 36. this equates to sales of US$1.3%. In organization information may be collected.63 billion Pakistan Rupees (US$1. stored and synthesized in such manner that answers important operational and strategic questions.06 billion) for the fiscal year ending June of 2001. This represents an increase of 76.2%.742.2% versus 2000. and Mangalore Ref & Petrochemicals Limited experienced a sales decline of 6.63 billion Pakistan Rupees (US$1. Information system is one of the strength of the organization. With sales of 63.1%. FINANCIAL PERFORMANCE SALES ANALYSIS Shell Pakistan Limited reported sales of 63. National Refinery Limited increased 15.Shell design and mange high-class information system that improve the productivity and decision-making.

25 and 0.0%) Jun 2001 1.5% to 165.572 Mangalore Ref & Petrochemicals Limited Mar 2001 0. pension and benefit plans and those .3% 1. Thus.442 Jun 2001 0. the stock of this company was down 42.9% -6.0%) India (100. During the past 13 weeks. In fiscal year 2000.Company Shell Pakistan Limited Chennai Petroleum Corporation Limited National Refinery Limited Year Ended Sales Sales Sales/ (US$blns) Growth Emp (US$) Largest Region 76.15 Pakistan Rupees.577 RECENT STOCK PERFORMANCE In recent years. earnings per share totaled 30.7% in 2001 from 2000.97 times book value. directors. the stock traded as high as 367.31% 3.. During the 12 months ending 6/30/01.581 817. versus 165.07 times book value.09 0. The company's price to book ratio is higher than that of all three comparable companies.0%) Pakistan (100.742. SUMMARY OF COMPANY EVALUATIONS Price/ Price/ 52 Wk P/E Book Sales Pr Chg 0. Shell Pakistan Limited is trading at 1.e.1% 15.97 Mangalore Ref & Petrochemicals Limited 1/18/02 N/A 0.885 N/A Pakistan (100.12 Pakistan Rupees per share. Closely held shares (i. This company is currently trading at 0. the Price / Earnings ratio is 5.5 1.25 1/17/02 3. Earnings per share fell 18.42 million).48. which are trading between 0.15 Pakistan Rupees on 1/18/02.059 Mar 2001 1. the stock has fallen 8.50% 43.0%) India (100.3%.86% Company Shell Pakistan Limited Chennai Petroleum Corporation Limited National Refinery Limited Date 1/18/02 5.50 Pakistan Rupees.07 1/18/02 N/A 0.5 0.00% 21. For the 52 weeks ending 1/18/02.08 0.20 42.79 billion Pakistan Rupees (US$96.04 0.968 553. this stock has performed terribly.09 time’s sales. those held by officers.2% 29.73 The market capitalization of this company is 5.

PROFITABILITY ANALYSIS On the 63. Shell Pakistan Limited paid dividends totaling 12. Dividend Analysis During the 12 months ending 6/30/01.5% of its profits as dividends.6% of sales.7% of sales. This was significantly worse than the already high 32. This profit margin is lower than the level the company achieved in 2000.7% of sales). The capitalization of the floating stock (i. This gross profit margin is significantly better than the company achieved in 2000. the Company reported earnings of 30.9% and 5. when the profit margin was 3. taxes. Since the stock is currently trading at 165.8%) than that achieved by Shell Pakistan Limited. The company has paid a dividend for 4 straight years.50 Pakistan Rupees per share. this implies a dividend yield of 7.06 billion Pakistan Rupees. or 1. This EBITDA margin is worse than the company achieved in 2000. that which is not closely held) is 2. when cost of goods sold totaled 91. The company's earnings before interest. the company paid 41. the gross profit was 29. (Extraordinary items have been excluded).33 billion Pakistan Rupees (US$38.63 billion Pakistan Rupees in sales reported by the company in 2001. or 70. when the EBITDA margin was equal to 5.96 billion Pakistan Rupees.e. The three comparable companies had EBITDA margins that were all higher (between 3.1% of sales.12 Pakistan Rupees per share.7% was better than all three comparable companies (which had gross profits in 2001 between 3.e.3% of sales (i. During the same 12 month period ended 6/30/01.83 million). The company's return on equity in 2001 was 22.75 billion Pakistan Rupees..1%. the cost of goods sold totaled 44. depreciation and amorization (EBITDA) were 1.2% and 4.1% of sales. Thus.15 Pakistan Rupees. In 2001.6% of sales. earnings before extraordinary items at Shell Pakistan Limited were 1. it is impossible for an outsider to acquire a majority of the shares without the consent of management and other insiders.0% return the company achieved in 2000. Shell Pakistan Limited's 2001 gross profit margin of 29. or 3. .6%.shareholders who own more than 5% of the stock) amount to over 50% of the total shares outstanding: thus.1% of sales)..

9% --------2001 5.01 2001 0. while Mangalore Ref & Petrochemicals Limited had 51 days outstanding at the end of the fiscal year 2001. which had inventories between 39 and 99 days at the end of 2001. 2001 0.44 billion Pakistan Rupees. Company Shell Pakistan Limited Chennai Petroleum Corporation Limited National Refinery Limited LT Debt/ Days Days Year Equity AR Inv. when the company's inventory was 2.3% -9.1% 2000 8. the company had 22 days of inventory on hand (another way to look at this is to say that the company turned over its inventory 16. this is an improvement over June 2000.2 times per year).2% 4.7% 3. FINANCIAL POSITION The 14 days of accounts receivable at Shell Pakistan Limited are lower than all three comparable companies: Chennai Petroleum Corporation Limited had 35 days.4% Company Shell Pakistan Limited Shell Pakistan Limited Vs.6% ----4.7% INVENTORY ANALYSIS As of June 2001.00 14 35 107 51 22 47 39 99 Mangalore Ref & Petrochemicals Limited 2001 5. Chennai Petroleum Corporation Limited National Refinery Limited Mangalore Ref & Petrochemicals Limited 2001 4. Year Margin Margin extra 2001 29.7% 3.6% ----1.8% 3. National Refinery Limited had 107 days. equivalent to 27 days in inventory.76 billion Pakistan Rupees.12 . Since the cost of goods sold was 44.PROFITABILITY COMPARISON Gross Earns Profit EBITDA bef.9% 5.75 billion Pakistan Rupees for the year. the value of the company's inventory totaled 2. The 22 days in inventory is lower than the three comparable companies.1% 2001 3.8% 2.3% 1. In terms of inventory turnover.60 2001 0.

petrochemicals. LPG and CNG dominates the country’s fuel and energy need. that is based in India (27.COMPETITOR ANALYSIS Shell Pakistan Limited operates in the Petroleum refining sector. PSO’s 3805 outlets all across the country markets more than 12 million tons of fuel products annually. import. Mangalore Ref & Petrochemicals Limited. PSO is engaged in the storage. PSO took a major step in improving its distribution facilities by acquiring 12% equity in the 800km long Karachi-Mehmood kot White Oil Pipeline.33 billion Pakistan Rupees [US$571. PAKISTAN STATE OIL A NEW VISION A NEW SPIRIT As the largest oil marketing company of Pakistan.85 billion Indian Rupees [US$577.44 billion] of which 100% was Oil & gas exploration). Since its inception in 1976 the company has been meeting more than 70% of the country’s fuel needs. This network is supported by PSO’s 28 storage facilities with a capacity of more than 800. As part of PSO’s policy of providing better customer service it has embarked upon its New Vision retail development program. Aviation & Bunker fuels. This analysis compares Shell Pakistan Limited with three other petroleum refiners in Asia: Chennai Petroleum Corporation Limited of India (2001 sales of 69.56 billion Indian Rupees [US$1. Equipped with the most modern facilities like electronic .000 tons.35 million] of which 100% was Petroleum products). distribution and marketing of petroleum products.61 million] of which 93% was Fuel). National Refinery Limited (34.

its kerosene sales are a major source of energy for the rural and lacking gas facilities. To give them a sense of participation PSO has instituted “Top Dealer Awards” and “Million Liter Awards” whereby efforts of the high performing dealers are recognized. convenience stores. From the locomotives of Pakistan Railways to the giant turbines of power projects. Through a chain of eight Aviation Service Stations scattered all across the country PSO fuels the aircrafts of many local and international airlines. Acquisition of new Lahore Terminal Complex at the Lahore International Airport has enabled PSO to serve the busiest corridor of East/West bound flights benefiting the airlines in shape of time saving and lesser fuel burn off. PSO has been constantly upgrading its facilities to serve a wide range of commercial aircrafts.dispensing units. More cordial relationship with its dealers is one of the important objectives of PSO’s New Vision programme. Emergence of Health Safety & Environment (HSE) as the corner stone of PSO’s corporate governance testifies to its commitment to environmental protection. PSO remains equally strong in Aviation and Bunker Sales. . PSO has formed an alliance with world-renowned company Castrol whose products are manufactured at PSO’s own ISO 9000 certified facilities ensuring the highest quality standards for both retail and industrial sales. In its endeavor to provide quality lubricants. auto car wash. Further. While it’s bunkering facilities at all the major ports of country fill up the ocean liners of many nationalities facilitating the nation’s international trade. internet facilities and business centres these site of the art designed stations provide greater customer confidence and a friendlier environment. all are fuelled by PSO. Complete HSE certification of all its facilities and installations is one of its major goals for the coming months that are being vigorously pursued. Along side its retail network PSO is playing an equally important role in the industrial sector. Being fully alive to its responsibilities towards the agriculture sector PSO’s 700 strong agency network helps keep the farm machinery running. As a manifestation of PSO’s greater customer focus a PSO 24hr PSO Customer Service has been launched where customer’s can lodge their queries and suggestions about various PSO products and services.

   The shell gives the proper attention to their customers.   Shell provides in time deliver to their petrol pumps. WEAKNESS  They have no proper shades and sitting arrangements at the filling stations because people who came for oil changing and car washing face difficulties in this regard. STRENGTHS  Shell confirms its position as a leader in the gas and power business with a deal to design the world's first large scale Gas to Liquids plant. its incentive based policies are motivating for employees. It is heavily emphasizing on advertisement and other promotional tactics. Mobile training units’ side keeping staff up to date on a whole range of topic including most important issues of health safety and environment. Shell has international standard petrol pump.  Shell is using effective means for the promotion of its products. All tanker is fitted with special tamper-profit seals to ensure that only the highest quality fuel is delivered to all company operation sites. The HRM policies of Shell are its strengths.   Shell has the heavy budget for the promotion activities.SWOT ANALYSIS Shell has the quality control and quantity control team visit and inspect the quality and quantity of motor gasoline of their petrol pump regularly. .

So they should renovate their petrol pumps. The example being the mobile. oil change.D. THREATS  The smuggling of petrol in Baluchistan form Iran is one of the greats threats to the company.) Helix that is opportunity for Shell to maintain these facilities.   There is no proper drainage system at filling station.  People perceptions are changing and they prefer digital pumps.  The fake oil makes up a large share in the market. Shell has eight regional retail managers who are watching the activities of petrol pumps in all over the Pakistan that is insufficient to handle the problems. Shell is charging few paisas more than their competitor.  Entrant of new companies in the refinery sector. There is very little empowerment of employees. OPPORTUNITIES  Shell has maintained a tradition of introducing new innovation as compare to its competitors.X. if such practices are not prohibited it will create a disastrous effects on sale   PSO is also servicing in profitable areas.  Shell has strong financial position so it has opportunity to avail a new market share in CNG business. Shell also has an opportunity to enter in the nice market. training unit. Lubricants (Rumila C.  Shell is the market leader due to innovation so it can easily win the customer confidence. . Minimarket (select. Shell is facing very stiff competition to PSO and Caltex. Jet was (Rianbow). quality and quantity unit.

2. SEVEN STEPS FOR BETTER CUSTOMER SERVICES: Every shell operation site follows the seven-point formula for providing customer service to its customer is stated below: 1. . Brand image 3. Then the attendant well comes to that customer from the driver side.CURRENT MARKETING STRATEGY OF SHELL PAKISTAN LTD. Especially they are concentrating in the following three areas: 1. 4. Customer service 2. is working for customer satisfaction because customers play a very vital role in the prosperity ort failure of a particular company. 3. That is the reason that shell is operating with the basic aim to satisfy its customers and provide better and better service to its customers. guide him to a vacant filing unit by a neatly uniformed attendant of the petrol pump. In brief it can be said that shell gives a strong emphasis on customer services. Attendant takes the keys form the customer. As customer drive in. The attendant shows meter reading before filing the fuel to the customer. By using this strategy company expands its business by upgrading petrol pumps in the country. Quality and quantity CUSTOMER SERVICES: Shell Pakistan ltd. After that the attendant asks to the customer about the quantities of fuel. The current strategy of shell is concentrate on its business and selected market areas.

For the improvement of quality and quantity following points are important: . In many of the stations. around two thirds are scheduled to be developed as RVI sites. BRAND IMAGE The second strategy of Shell is creating a strong Brand Image of the company in the customers mind. shops offer a wide range of convenience goods through the select shops and stores.   Majority of the filling stations are working for 24 hours for customers. hands over the keys and takes the amount of money.  Rainbow Jet Wash and preserver oil change facilities are also available at filling stations. new sites are being acquired in strategic locations. for the 1200 or so sites which shell inherited through the take over. In addition. In visual terms. Pakistan State Oil (PSO) and Caltex. The new sites are being designed according to the international standards keeping in view the cleanliness in all respects and an Excellent/Terrific out look. By this procedure a customer feels that he is being given proper attention and he will again come to the filling station to fill the tank of his vehicle. many of them being completely redesigned from the underground storage tanks up. 7. the installation of Shell’s Retail Visual Identity (RVI) makes a striking and immediate difference between shell’s gasoline stations and those of its competitors. After filling the tank the attendant tells the customer to see the meter reading and amount of liters.5. Attendant ask to the customer that he would like to purchase an international high quality of Rimula x. QUALITY AND QUANTITY The third strategy of the company is to set standards for reliability and honest dealing because it is fundamental to the company’s reputation. Then the attendant cleans windscreen of the vehicle and says good-bye with smile. The RVI programme is massive. The purpose of this is to attract the customer and develop a strong brand image in his mind. 6.

Recognizing the importance to the company’s reputation for delivering the right quality of fuel. Following important aspect of Shell’s site control by the management with efficiently and effectively:     Site Take-over Product receipt procedure Bank accounts Indenting and Payment procedures . mobile field laboratories. “Fuel Quality is fundamental to our reputation for honest dealing”. QUALITY AND QUANTITY CONTROL UNITS: Another mobile innovation cover fuels quality assurance. The quantity is checked through various instruments. manifested by dilution of premium grades with low-cost gasoline has become so common that customers have given up complaining about it. testing fuels quality using an octane meter. most importantly. Technicians operate what are. This produces a result in just a few minutes. and strategy and policies. plans. For this purpose shell follows its strategic objectives. instead of days using normal centralized laboratory facilities. SHELL OPERATIONAL STRATEGY Shell operate its site with a very efficient management to improve the quality and quantity of fuel and provides the better customer satisfaction services. The quantity control units also check the digital pump. Quantity control units check that whether the retailers are giving the right quantity or less quantity of fuel to the customers. MTU train the workers on different filling stations. safety and environment. issues of health. effectively. According to Shell.  Mobile training units Quality and quantity control units MOBILE TRAINING UNITS: Mobile training units visit sites. shell has introduced random gasoline testing forecast. keeping staff up to date on a whole range of topics including. an area where cynical disregard of standards.

The step.e. the first day of site operations as a COS are also outlined. A copy of the invoice of the initial fill to be sent to RSO/2 for recording and the original is to be retained at the site in a separate file. When taking-over the site. OUTSTANDING BILLS . RESPONSIBILITY The territory manager is responsible to ensure compliance with the procedure. which should be taken on the “hand over day” i. INITIAL WORKING CAPITAL Working capital requirement at a site is determined keeping in view the sales of the site. two options are available.     Credit sales Product testing Imprested account operation Price change operation Wet stock management policy SITE TAKE-OVER PURPOSE The purpose of this procedure is to ensure that when a site is taken over as a company operation site (COP) the working capital taken over at the site is correctly valued. PROCEDURE AND STANDARDS STOCK TAKING At the time of site taken-over company follows the following procedure for stock taking: The dealer agrees to a target date for handing over the site which is called that “hand over date”.. SCOPE This procedure applies to existing dealer sites which are to be taken over as COS.

Any outstanding amount should be mentioned in the site take-over note and recovered form the out-going dealer. INDNTING AND PAYMENT PROCEDURES FUEL . Before decantation the site manager should tally the product specification with the grade ordered. All seals should be checked for integrity and numbers matched with those on the invoice. RESPONSIBILITY The site manager is responsible to ensure compliance with the procedure. Lubes At the time of receipt of lubes. site mangers are not authorized signatory to operate Imprest account. PRODUCT RECEIPT PROCEDURE PURPOSE To ensure that the quantity and specifications of the received product match with that ordered. incurred by the site before the hand over date have to pay by the dealer. The name of the Site manager may be included in operating deposit account. BANK ACCOUNTS In case of authorized bank signatories. However.All outstanding bills for utilities etc. It should be made sure that the product received is not damaged or leaking. SCOPE This procedure applies to all company operated sites for the receipt of all products and applies to of wet Stock as well as packed lubricants. PROCEDURE AND STANDARDS Fuels The site manger should be present at the site during the decantation of the product. the site manager should check the quantity ands specification mentioned on the invoice with that of the indent placed.

all products will be financed by the cash proceeds from the initial fill. All supplies are to be made as per arrangement with the depot/installation (COD/DOD or advance DD).  Details of cheque/DD number and date should be noted on the invoice when precut is delivered at the site. the site manger red band copy returned to the truck driver on which all cheques details will have to be recorded. Lubes After the initial fill. CREDIT SALES PURPOSE Credit is extended to the customers in a manner that the exposure of the company is minimized.  Site of the company has a copy of the invoice.  Each cheques/DD must be handed over to the truck driver after noting the particulars of the cheques/DD.After the initial fill. .  All cheques/DD’s must be made out for exactly the same amount as the invoice and drawn in favour of shell Pakistan Ltd. All the copies of invoice site copy of the invoice to be retained on the site and a file maintained. A cheque/DD for the exact value of the invoice should be drawn in favour of shell of Pakistan Ltd. all products will be financed by the cash proceeds from the initial fill. Payment of fuel made under following Process:   Indent should be placed on telephone at the nearest supply point. Payment of fuel made under following Process:   The price for fuels is the indent price and invoices must be prepared on this basis.

Customer name II. II. Maintenance of al the necessary credit customers and sales records in the responsibility of the site manger under the supervision of the territory manager. In case the customer does not pay the balance with in the month. The application should contain the following basic details: I. The site will send a security deposit deduction note to specify the deduction of the security deposit for a particular customer and send the amount to the site to balance off the credit sales. Number and type of vehicles etc. In case of the default of payment by the customer the site will stop extending credit to the customer. the balance amount will be deducted from the security deposit and the account will be closed. The site will first try to recover the credit amount form the customer. PRODUCT TESTING PURPOSE . PROCEDURE AND STANDARDS Account opening: All new credit accounts can only be opened with the approval of RRMs. RESPONSIBILITY It is the responsibility of the territory manager to ensure that all credit accounts are approved by the regional manger. CREDIT LIMITS I. Approval of the credit terms and operation lies with the regional manager of the recommendation of the territory manager. Customer address III. The customer should apply in writhing to RRM for opening a credit account with the site. III.SCOPE Applies to all company operational sites.

 The amount of the product withdrawn from each nozzle is noted and after the completion of testing the product if decanted in the tank. The Imprest Account procedures have been designed to ensure implementation of standards of imprest operation outlined in Management Policies and Procedure Guide.  The site is also supposed to enter the product testing amount in the SMS along with the details o the date. IMPREST ACCOUNT OPERATION PURPOSE To ensure that all Territory Managers and aware of the imprest account operating procedures.Tested product is authorized and is accounted for in daily stock.   All the necessary testing should be conducted in the presence of the site manger. It is to be ensured by the site manger that the entire tested product is decanted back into the respective tanks. . Since this product is not considered as the sold product a proper accounting process needs to be in place. The signatures of the concerned staff are taken. Product testing is a process of taking fuel product from the nozzles for the purpose of testing that dispensers are dispensing the right quantity of the product. amount of product from respective nozzles and testing conducting authority. PROCEDURE AND STANDARDS  To conduct ay testing of the product it is mandatory that the measuring cylinders kept at the site should be vetted by the quality control unit. This is one to ensure that the company exposure is reduced by using correct banking practices. RESPONSIBILITY It is the responsibility of the site manger to ensure that all the product testing is conducted in his presence and that all the testing is properly authorized by the territory manager and in case of testing due to QCU and maintenance staff. Testing may also be conducted by the weights and measures officials.

PRICE CHANGE PROCEDURE PURPOSE The purpose of this procedure is to ensure that the changes in the working capital status as a result of the price change of the product are recorded and reported accurately. b) Imprest limits for sites are set by RSO on the recommendation of the concerned RRM. bank charges. etc. All the operating expenses of the site are detailed in the imprest approval form and the total of all the expenses makes up the imprest limit of the sale. PROCEDURES AND STANDARDS a) The imprest account should only be used to meet all the expenses of business nature such as salaries housekeeping. The territory manger is responsible for the verification of the accuracy of the above. the imprest account is operated and claims for reimbursements are made. . RESPONSIBILITY It is the responsibility of the Regional Manager and the Territory Manager to ensure that the Imprest Account is operated and claims for reimbursements are made in accordance with the requirements given in the procedures. FREQUENCY This procedure is to be followed whenever.SCOPE The procedure is applicable to imprest account operation and the reimbursements. SCOPE This procedure applies to the change of prices for all grades of fuels and lubricants sold at the site. It is the responsibility of the site manger to ensure that he change in working capital value is reported correctly and accurately. RESPONSIBILITY It is the responsibility of the RRM to ensure that price change takes place at a COS in the presence of a representative of shell Pakistan limited.

the sale is temporarily stopped. losses being one of their inherent characteristics play an important role in the efficiency of petroleum business. A primary responsibility in the site operation is to ensure that the physical losses are kept at minimum so that maximum.  Periodic physical measurement of the actual product stacks and comparison with the corresponding book stock to access the losses for a given period. The potential of cost saving by improving the controls and reducing the losses is considerable. quantity of the product received is delivered to the customer.  The site manager and the territory manager representative must take a dip of the storage tank and note the meter readings of all dispensing units jointly. The targets will vary according to the type of the product and equipment used.  Good product safety with low risk of undetected theft. dispensers and storage tanks at retail site. STRATEGIC OPTIONS .  Random spot-checks to ensure compliance to procedures and performance of the equipment.  Assessment of the loss control performance against the targets. At the time of the price change. MONITORING OF LOSSES Loss of performance standards are normally assessed on historical basis by comparing monthly results.  Only the concerned territory manger is authorized to change thee prices on COS.PROCEDURE AND STANDARDS When the price is changed. the following procedure is t be applied at the COS:  The new prices are notified by RSO to FNC/12 supply points and regional offices to update their record accordingly. WETSTOCK MNAGEMENT POLICY Due to the very nature of petroleum. Effective monitoring of losses can be achieved by following way:  Accurate measurement and accounting for all the deliveries.  Proper calibration of the tank lorries.

Shell is waving on this direction. Diversification a) Related b) Unrelated SELLING OUTIn selling out if the company feels any danger about the survival of company. 2. CONSOLIDATION In such direction. The alternative methods by which the direction of development might be achieved. Market Development 6. Consolidation 3. Decision on direction and methods are not independent of each other. That is why shell does not choose such type of direction. Product development 5. It has a strong financial position. The alternative direction in which the organization may choose to develop. Market penetration 4. Now we shall discuss the direction in which the shell limited may choose to develop. the company will change the way of operation but concentrate on present state of business. 1. which are needed consideration for development alternative strategies. 1. Shell is the biggest company of the world. The shell is waving by following factors!      Maintaining a share in a growing market Competing in a declining market Improving quality Increasing market activity Imposing productivity through capital investment MARKET PENETRATION .There are two separate aspects. Selling out 2. the company would like to dispose of its assets.

“Opportunities often exist for gaining market shares as a deliberate strategy” This is called market penetration. Shell has no capital problem that is why Shell is working on the direction of market development. The proof of this is that Shell has expanded its business more than hundred countries. the company locates any new areas where it could start its business to minimize the risk. The above discussion in consolidation also relevant to this direction. Market development can include new market segment. The shell is also working on this direction by providing better services on its company operation sites. Now Shell is expanding its business in all small and big cities of Pakistan. Current New Customers New Current MARKET DEVELOPMENT In market development. PRODUCT DEVELOPMENT .

Shell has introduced CNG that is the best example of related diversification. Unrelated diversification RELATED DIVERSIFICATION Related diversification means development beyond the present product and market. coal and metals. The two broader concept of diversification are: 1. This shows that shell is also working on this direction. Evaluation of strategic options We have selected two strategic options for improvement of shell performance as maintain the leader of quality in the customer services.g. For this purpose we evaluated them.. DIVERSIFICATION Diversification means new product and new market. Shell developed the product of CNG. Related diversification 2. but still within the broad confines of the industry in which the company operates. which have not clear relationship with present product/mkt. Unrelated Diversification It is the development beyond the present industry into product/mkt.  Market development .  Product development.Shell will feel that the consolidation in their present market does not adequate opportunities after the search for coping with changing environment. which is better to achieve the organizational objectives. Shell is interested in other business e. petrochemicals.

There are three steps involved in evaluation of strategy option. By market development shell can cope with aggressive competitors. Shell also capable to performing the services in the field of new market. Feasibility Through feasibility we will assess how our strategy might work in practice. As such there is no financial problem facing by shell. In market development shell has sufficient resources to meet the current needs of the customers. In product development shell has not sufficient resources to cope with existing requirement. .To evaluate the options we use the tool of SWOT analysis.). Developing market (establish new outlets and upgrade existing outlets) increase growth rate and market share simultaneously. By product development (CNG) Shell can decrease its dependence on particular supplier (Greave Pakistan Ltd. Shell has sufficient technology to fulfill the current requirement of market development. By market development the company can capture the market of CNG. Use of CNG reduce the environmental pollution and save the consumption of fuel.    Suitability Feasibility Acceptability Suitability Shell is one of biggest multinational company dealing in Pakistan.   Shell can cope with reaction of competitors by market and product development.  Shell can achieve market position by developing the new outlets and improving the services of existing outlets.

first a way in which an organization’s circumstances will dictate which methods of evaluation are most useful at the time of selecting future strategies. GLOBAL SCENARIOS TO 2020 OF SHELL PEOPLE AND CONNECTIONS Shell International builds a set of global scenarios every three years to explore the overarching challenges arising from changes in the business environment that need to be faced by its . After the evaluation of the strategic options we are concluded that the market development is the best option so. This thing badly affect on the capital structure of the company.  In developing a product there is high rate of risk in this way the company may losses its goodwill. our selections is market development.  There is a great financial risk to develop a new product but there is no as such risk in market development.Acceptability Through acceptability we will try to assess weather the consequences of proceeding with a strategy are acceptable. Because it provide a chance to earn more profit and competitive advantage and has a low risk as compare to other options.  Shell can increase it profit market share. and growth rate by established and upgrading outlets.  Shell has strong culture so this is no affect on our new strategy for developing new market. Secondly. the process by which selection of strategies occurs since how the information from evaluation is used in strategic decision making. Selection There are two issues which needs consideration.

The growth in the LNG industry is driven by overall growth in global natural gas demand .four of which are shown on the chart: Sakhalin. Currently contracted LNG volumes are likely to reach 120 million tons per annum by 2005 an average annual growth rate of over 5% since 1995. For urgent media queries out of office hours. By the end of this decade. we have interests in five existing LNG projects all of which have expansions under construction or under consideration. as technical service provider to the LNG projects in which we participate. This of course will require increased shipping capacity. new LNG markets will likely be added in China.businesses. Additionally. India and the Americas. Subsequent LNG developments over the past 30 years have demonstrated a 50% reduction in development costs. The growth in volumes between now and 2005 will largely come from expansions of existing projects.and will fuel additional growth in the LNG industry in the second half of the decade. Within Shell alone. we are involved in the development of several new projects . . Namibia and Venezuela.but also by the decreasing cost of delivering LNG competitively to market. to almost 180 in the next five years. Timor Sea. The Press Office also handles all media enquiries about the businesses of Shell in the UK. please contact the duty press officer on pager no 07659 129 454 and leave a message and contact details. If all current orders are completed. Shell. LNG BECOMING A TRULY GLOBAL TRADE Today the LNG trade is growing . has played a key role in capital cost reductions. These scenarios provide a useful context for testing our strategies and plans and help us to anticipate significant changes in the world around us. The number of markets is also increasing. the world's LNG fleet will expand from 127 active carriers today. CONTACTING SHELL MEDIA RELATIONS The Group Press Office deals with all media enquiries relating to the Group's corporate activities and its international businesses. But several new projects around the world are likely to be under construction by that time .and rapidly becoming truly global.

The technological and financial challenges of the original LNG project in Nigeria were considerable. . The possibility of a further two-train expansion is already under serious discussion amongst the partners. and construction of the liquefaction facilities . The project involves field development. making it one of the world's largest LNG producers. Construction is well underway with first deliveries set for early 2003. cost and customer demand. Sakhalin LNG will be the first from Russia. Approval of a third train was granted in 1999. The two trains together now deliver some 6 million tons a year. I'd like to move now to a completely different climate . Our goal is for our next LNG development to be delivered at a significant improvement over Oman .to the Sakhalin project in far eastern Russia where we are partners with Mitsui and Mitsubishi.which is the lowest NIGERIA cost LNG project A GOOD to date. an onshore pipeline to deliver the gas to an ice-free port. The challenges involved here are much different. The first production of LNG in Nigeria was from the first of a two-train project that came on stream in October 1999.9 bln.for a total estimated cost of $8. EXAMPLE A specific example of the opportunities in LNG is in Nigeria.We believe this can be improved upon even more. But the project is now well placed to help meet growing demand in Europe and North America. mainly to Atlantic Rim and Mediterranean markets. Once built. It will add a new source of energy supply for Pacific markets and will play a significant role in guaranteeing energy security in the north east Asian region for years to come. government and customers driven by gas availability. Nigeria could be producing almost 15 mtpa by as early as 2006. INNOVATION THE KEY TO OPPORTUNITY Innovative use of technology is the key to other possible opportunities related to remote gas reserves that remain stranded due to the prohibitive cost of development.

LNG import terminals. Liquid fuels produced by the Shell Middle Distillate Synthesis process at a commercial scale plant producing 12.000 bpd . and the Sunrise field in the East Timor Sea. a minimal physical footprint. we believe Gas to Liquids will be a significant industry.which includes pipelines.and the related surge in demand for electricity .which is often the difference projects like these need to make them realities. The liquids produced can also substitute for expensive oil imports.Shell has recently outlined plans to apply our Floating LNG technology to overcome these difficulties and monetise the Kudu field offshore Namibia. Effective application of leading technology opens up many opportunities.000 bpd at Bintulu here in Malaysia. They provide extra revenues for resource owners from new markets for natural gas products. Floating LNG will enable lower construction costs.will require investment in excess of a billion dollars each.is the driver in China and India. distribution systems. SHELL WORKING ON KEY INFRASTRUCTURE To meet that demand. and a higher degree of flexibility. . This infrastructure . Shell and other companies are heavily involved in the planning and development of key infrastructure projects. Depending on the location. Shell has demonstrated that GTL technology can be commercial and that the products are competitive on the world market. But economies of scale and improved designs will result in significant advantages. are so clean they are leading to the creation of new markets. and power plants will cost billions of dollars. New natural gas markets are opening up and creating new opportunities particularly here in Asia.capable of producing 75. Because of these advantages. In both cases. Another example is Gas to Liquids. up-front capital costs can be reduced by up to 40% . by the end of this decade. They allow monetisation of gas reserves that would otherwise be uneconomic. Development of the next generation plant . Underlying economic growth .

In these markets. Instead of billions of dollars for investment in capital-intensive infrastructure projects. We believe that. they are far more than that. But these opportunities require different capabilities for success.In China alone. MATURE MARKETS DIFFERENT At the other end of the market maturity spectrum are the US and Europe. Shell's most significant involvement in these areas is through Coral in the US. when companies first started producing statements of business principles. in the 21st century. the total amount to be spent on projects open to foreign investors in order to build domestic natural gas infrastructure . to to do We will mention based sustainable deregulation necessary human on just four: principles. We believe the Shell business principles. As markets mature and liberalise. development. resources. there was considerable cynicism. right. they are but a few of the wide variety of opportunities I see in the world's natural gas business. People thought they were just nice words . Ours BUT is an industry of the ARE future.upstream. and the qualities we demonstrate. and Shell Energy in Europe. THERE ALSO CHALLENGES Delivering these opportunities and growth will not happen without overcoming a number a) b) c) d) The The The The of need need need need to challenges. business to get the contribute to attract A few decades back.public relations material. As exciting and expansive as the opportunities I've outlined may seem. I believe they add up to a significant new path forward for the global gas industry. marketing and trading opportunities emerge. new technologies and business models are allowing us to develop innovative ways of meeting our customers' needs. these markets require highly skilled human resources and balance sheets capable of supporting the commercial risks and financial exposures. WORLD . midstream and downstream could be as high as $25 bln over the next ten years. WORKING will IN be A critical business DIFFERENT assets. not of the past.

Our world today is different. transparent and fast moving. We know we can't do this alone. regulatory experts. the demand for experienced people in our industry rises. to me. The principles set the boundary conditions within which we do business. living by a clearly articulated set of business principles is an advantage for our employees. of overriding importance is our commitment to sustainable development. but also the social and environmental impact. This commitment encompasses our belief that all we do must take into account not only the economic impact. It is now incumbent on us all . traders. Perhaps most importantly. That's why our commitment relies heavily on working together with partners.although these will remain important. IT systems specialists. our customers. As the number of natural gas markets increase. governments and local communities to ensure we strike the appropriate balance in all three areas of Sustainable Development.to work together to design systems that prevent energy shortages or that discourage long term investment. We must always keep in mind the ultimate aim of producing products and services more efficiently and reliably and ensuring long-term security. We will also need increasing numbers of experienced international business developers. In this world. Another continuing challenge will be to get deregulation right.in government and industry . and as more and more markets liberalise. our suppliers. and financiers. asset operators. Every commitment is important but. managers and . we need strategists. The final challenge is attracting the human capital required to deliver the growth and value. our partners and the governments with which we interact. And the demand is not limited to those in traditional natural gas fields such as pipeline engineers and technologists . It is more global. The California debacle has illustrated for us many of the potential pitfalls.

.  Lubricants should be disposed in a proper way to protect the environment form being polluted. Anti globalization and supply security add to these challenges. is going to play an increasingly important role. And I believe our industry is well positioned to meet the challenges along the way.such as the attraction of the necessary human and financial capital. Success calls for a diverse work force .marketers with local experience.one well matched to the diverse markets that will be key to the future. efficiency. and technological advances. Recommendations  There should be proper shades and proper sitting arrangements at the filling stations because people who come for oil changing and car washing face difficulties in this regard. And. efficient energy is going to grow. In summary. our industry is facing a broad range of opportunities.  Shell should provide small incentive to its customers. But. because of its environmental qualities. the global demand for more and cleaner energy goes on. But there will also be challenges . The Shell longterm energy scenarios indicate that demand for clean. natural gas.

  Shell should make company operation site in every city for capture the new market. In these market programs emphasis should be given to advertising.   Lubricants should provide the facility 0f free oil change on all its out lets.  Shell should develop effective marketing programs that will help the company increase sales that will lead to increase market share. There is only one thing that is constant that is change. which is most effective and efficient tool of promotion for such type of business. should be kept introducing time to time by shell. Reactions: Email This . Schemes like “Buy 50 liters of super and get a come free or a cola drink free”. These outlets should have all possible facilities for customers because one of the reasons behind decrease market share is modernization of competitors.  Company should established new regional office to control the activities of company operations site. Shell should develop modern retail outlet. shell should investment on research development to cope with dynamic environment.