Shell Uk Strategy

Brief Summary

Shell, one of the largest multinational oil companies planned to dispose of the Brent Spar, which was huge floating oil storage and loading buoy, by sinking it at a site in the deep Northern Atlantic, with full UK Government approval. But a combination of Greenpeace, European Ministers and the public stopped them. In order to ensure that no similar incidents occur in the future, the Shell UK had to create a new BEPO process.

Key Strategic Issues

Disposal Options: In the last analysis, there remained two options; horizontal on-shore dismantling and deep water disposal. Shell qualified the deep water disposal option as Best Practicable Environmental Option (BPEO).

BEPO Process: Several options were evaluated according to engineering complexity, risk to health and safety of workforce, environmental impact, cost, and acceptability by the British authorities and other interested parties, such as fishermen's associations. It is important that NGOs such as Greenpeace were not included.

Deep water disposal option: This option had the advantage on the grounds of engineering complexity, risk to health and safety of the work force, and cost (about 11 million versus 46 million pounds).

Regulatory Principles: The International Maritime Organization's (IMO) guidelines and the UK legislation stipulate that sinking in the ocean is an acceptable option.

Shell' position: Shell was seen to be greedy. As stated above, the public saw that it was no coincidence that the declared option was the cheapest. Hence, Shell was seen as an easy target to boycott. People felt that they had acted in an environmentally correct way without considering which option was environmentally acceptable in real life.

Greenpeace: Greenpeace had great skills to appeal to the public with simple message through television coverage. In addition, Greenpeace had to cut its budget by about 10% and dismiss more than 90 staff members due to a drop in contributions. Therefore, one of their main strategies is to desperately attract the public attention through extremely confrontational actions in order to strengthen their influence and recover their budget.

UK Government: The UK government approved Shell's BEPO and would not reconsider its decision because UK was confident that its decisions would be based on sound science and take account of the full range of significant factors.

Other European Government: Politicians were heavily engaged in condemning Shell as it was an easy way of attracting green votes. The German government was the first European government to lodge a formal protest against Shell and the UK government. This protest became the catalyst for a growing storm of protest from Europe.

Possible approaches to solving the problems

1. Exit disposal options and Include Greenpeace among the stake holders to be consulted in its review of options and the development of a new BPEO

Pros: This was received with joy by the public and the new BPEO process will become more open and transparent, which reduces risks of public criticism. Greenpeace's influence was beneficial for Shell in terms of justifying Shell' decision if Greenpeace became an ally.

Cons: This option was received with an angry response by the British government. Greenpeace does not have formal