Company Overview

Royal Dutch Shell owns reserves of about 11.8 billion barrels of oil, but its operations don’t begin and end with oil exploration and production. Shell maintains five core businesses: production of bitumen, refined oil products, and chemicals; transportation of natural gas; trading of gas and electricity; developing renewable energy sources; and ownership of more than 45,000 gas stations. Headquartered in the Netherlands, Shell operates in more than 140 countries. On the world’s oil stage, it is second to ExxonMobil.

Most of Shell’s crude oil comes from Nigeria, Oman, the U.K., and the U.S., though the company owns or has stakes in 50 refineries across the globe. Recently, it announced it would invest $12 billion in offshore drilling projects near Dubai. It also plans to pump more money into its joint venture with PetroChina, to further develop wells throughout China.
Originally known as The Royal Dutch/Shell Group, Shell was created in 1907 when the Royal Dutch Petrolium Company and the Shell Transport and Trading Company merged their businesses. Royal Dutch shareholders received 60 percent control, and Shell shareholders got 40 percent.

In the decades after World War II, the company profited from growing international oil consumption. In 1985, it acquired 100 percent of Shell Oil, its U.S. wing, but shareholders sued, claiming that Shell Oil’s assets had been undervalued in the deal. They were awarded $110 million in 1990.

After the Gulf War, Shell sold its major California refinery to Unocal and its U.S. coal mining unit to Zeigler Coal. In 1996, the company formed a partnership with top oil company ExxonMobil to form a worldwide petroleum additives venture.

Shell sold its coal business in 2000 to U.K.-based mining company Anglo American for more than $850 million. It tried to expand its U.S. natural gas reserves in 2001 with a hostile takeover attempt of Barrett Resources, but the effort was withdrawn when Barrett was instead acquired by Williams for $2.5 billion.

The year 2002 was heavy with U.S.-based acquisitions for Shell. First, it acquired ChevronTexaco’s (now Chevron’s) stakes in U.S. refining and retail ventures Equilon and Motiva. It then bought Pennzoil-Quaker State for $1.8 billion and Enterprise Oil for $5 billion. In Germany, it purchased RWE’s 50 percent stake in the Shell & DEA Oil joint venture for $1.35 billion.

Shell signed a $200 million exploration deal with Libya in 2004, after an absence from the country lasting more than a decade. Later in 2004, the company revealed it had overestimated its reserves by 24 percent, which resulted in the ousting of CFO Judy Boynton and Chairman Sir Philip Watts. The controversy led to the official merger of former publicly traded Royal Dutch Company and The Shell Transport and Trading Company in 2005. Before, Royal Dutch Company has been on the books as Shell’s parent company.

Shell announced plans to build an LNG plant in Qatar worth $7 billion in early 2005. Later that year, its chemicals subsidiary reported it would sell its 50 percent stake in LyondellBasel, one of the world’s top polyolefin makers. In 2006, the company acquired a large area of oil sands in Alberta Canada. The same year, Shell also gave up control of the $22 billion Sakhalin-2 project to Russian gas company Gazpron. In 2007, Shell acquired the remaining 22 percent of Shell Canada that it didn’t already own.