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Background
The Royal Dutch Shell Group (Shell) employs over 119,000 people worldwide and is a leading energy company in the world. Shell has five core businesses: Exploration and Production, Oil Products, Downstream Gas and Power, Chemicals and Renewables, with operations in more than 140 countries across the world. Shell registered revenues of US$ 268 billion in 2004, making it the fourth largest corporation in the world and with profits totalling US$ 18.18 billion, it is also the worlds second most profitable business. The Shell Groups presence in India dates back about 75 years, when it began operations in the country as the pioneering oil distribution company, through Burmah Shell in 1928, an alliance between the Burmah Oil Company and Asiatic Petroleum (India). Shell returned to India in 1993 with the incorporation of Bharat Shell, a 51:49 joint venture between Shell and Bharat Petroleum Corporation Limited. In 1996, Shell India Private Limited, a 100 per cent Shell-owned company, was incorporated to oversee the development of businesses in petroleum, natural gas, petrochemicals and renewable energy. Shells present interests in India cover natural gas (LNG), LPG (liquefied petroleum gas), lubricants, solar energy and retail fuels. Shell is seeking to set up PMB plants in Bengal and Maharashtra to support the bitumen needs of a growing infrastructure sector in
India. Shells US$ 650 million Hazira Port and LNG Terminal, in Surat district, Gujarat, is regarded as a key FDI project, and is building critical gas infrastructure for India. Shell is the only international company to be granted Government of India approval for the retail fuels business in India. Shell has 9 registered companies in India.
Steel Authority of India Limited, ONGC, the Jindal Group, Mahindra & Mahindra, Ford, Coal India Limited, Larsen & Toubro, Tamil Nadu Petro and Thermax. Pennzoil Quaker State after global acquisition this company is part of the Shell Lubricants business in India, manufacturing and marketing a range of branded lubricants focused on the automotive as against industrial sector, with significant OE supply relationships. Shell Hazira Gas - The Shell Group has set up the US$ 650 million Hazira LNG importation and regassification terminal ahead of market. The company is developing a commercial model for the Hazira LNG terminal tailored to local needs, with an innovative balance of short and long-term supply contracts. Shell Solar is actively engaging in partnerships with rural banks such as the Vysya Bank, Syndicate Bank, Canara Bank, the Nethravathi Grameen Bank and others, in order to facilitate finance options that match the cash inflows of the customer. These options, coupled with the quality of Shells solar panels and post-sales service, have made Shell Solar a trusted name in the rural and peri-urban solar market. Shell Solar has installed 20,000 lighting units in rural Karnataka, Kerala & Andhra Pradesh, contributing a fourth of Shells global rural solar installations. Shell Global Solutions has been providing technical
advice and services for Reliance Industries refinery at Jamnagar in Gujarat, since 1999. The company is expanding its footprint in India and has recently been given an extension of the Reliance licence.
in India. India is a priority market for Shell and it is seeking to build its portfolio in this market.
The company has also recognised the diverse nature of the Indian market, particularly, that the country cannot be considered one homogeneous market. It has had to tailor its approach to the market suitably, taking local conditions and requirements into consideration.
Base oils and additives, the two basic raw materials used in manufacturing lubricants, are procured either from Shell Refineries or global sources approved by Shell Research Centre. This gives it total control over raw material quality from source to the finished product. Products are formulated and tested as per Shells Lubricants Quality System. Production processes are fully automated, which ensures accurate measurement and dosing of ingredients. First-in-first-out inventory movement of packs is ensured through a computerised system.
Best practice is not restricted to product quality and marketing, but also extended to health, safety, environment practices and social investments. Shell won the Golden Peacock Award for Eco Innovation in 2005, a recognition of its innovative best practices in environment and safety management. Shell companies in India have invested considerable resources in truck safety and promoting safe driving
practices. This continues to be a top priority across its businesses, including LPG.
Future Plans
Shells focus in the short-to-medium term is expected to be on consolidating and growing its existing businesses in India. Shell India has been granted permission to market transportation fuels in the country. Shell has been allowed to set up a network of 2000 petrol stations, which it is setting-up in a phased manner. For the moment, Shell is focused on developing its retail business via the organic route. Shell India has indicated that it would source petrol and diesel locally from MRPL for its upcoming stations and would use the importation option only if there were strong commercial reasons for doing so. Shell India is also developing its bitumen business, and a company has been incorporated for the purpose.
Shell is setting up manufacturing units for speciality bitumen (poly-modified bitumen) in view of Indias ongoing infrastructure development activities. The Shell Group identifies India as a large, potentially profitable market, and aspires to have a larger share in the coming years. Shells strategic investment and the policies adopted in business development have made Shell a preferred partner in Indias growth, well demonstrated by the successes achieved by Shell India in Indias energy sector.