Royal Dutch Shell in Nigeria: Operating in a Fragile State



Abstract

The paper will be dealing with the merger between Royal Dutch and Shell in the country of Nigeria which took place after shell's global position was severely damaged after a few controversies. The paper proceeds with an introduction, followed by the prospect of this merger. The paper further discusses the effect the merger will bring upon the country of Nigeria and what should be the role of the stake holders of this merger. Paper concludes itself with a brief overview about the recommendations by Benjamin Aaron.Table of Contents

Abstract2

Introduction4

Discussion4

Challenges4

Recommendations5

Shell's Risk and Value in Nigeria6

Economic System of Nigeria6

Role of Government7

Benjamin Aaron's final Brief7

Conclusion8

References9

Royal Dutch Shell in Nigeria: Operating in a Fragile State

Introduction

Shell is the pioneer in oil industries and has been carrying a valuable reputation since past many decades. As a multinational Shell has been operating in many industries, some are served with energy and others are exploited for the sake of oil and fuel extraction.

Nigeria has been one of the most valuable countries for its enormous oil and fuel reserves. Shell and its competitors have always shown keen interest in the oil fields of Nigeria.

Nigeria which was initially a British colony soon was dictated by military leaders and even after a while a democratic leader was appointed was no more than a puppet of the military leaders. The internal situation of Nigeria is not so kind as the Niger Delta is an active region on terms of war and disputes.

Discussion

Shell has been severely criticized for its performance in the region of Nigeria and for its failure to bring an effective corporate social responsibility program to benefit the economy and people of Nigeria. The merger of two oil biggies Shell and royal Dutch will introduce many challenges for the firm.

Challenges

Firstly both the corporations had individual departments and as they merged they had opened a downsizing window because for every job there were two contenders present.

Secondly, the kind of reputation shell was carrying in Nigeria and the region in which it was operating it was getting difficult for them to control. As the merger introduced new key players a wave of revolt and disharmony must be expected from the labor class of the oil fields.

Thirdly, the investors might back out due to the merger as they might lose their confidence in the merger of both the parties. Other than that both the companies have varying cultural and policy differences which will be exploited as the merger brings a unification policy (HRW, 1999).

Recommendations

In my opinion the companies should confront the first issue of job contenders as the offices of both the regions will remain intact, their roles of the lower management won't change much but in the case of top level management merit will make the final decision.

The second issue of revolt can be catered by7 re - negotiating with the militants and politicians of Nigerian using the old key players which have successfully negotiated in the ...