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Posts on ‘April 11th, 2015’

BG acquisition offers Shell opportunity for major strategy change

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Screen Shot 2015-04-08 at 08.12.04By Paddy Briggs

As a Shell “lifer” – more than forty years if you include my time as a Director of the Pension  Fund – I cannot recall a bigger strategic shift than the acquisition of BG. It offers the Corporation a unique opportunity to do what Tom Peters called “stick to its knitting” – to concentrate on what it’s really good at.

BG is an “Upstream” company. It only does exploration and production of oil and gas. And that is what Royal Dutch Shell (RDS) is good at too. To the man or woman in the street it is the Shell emblem standing over a Shell petrol station for which it is best known. But over the years this part of the business – never, in truth, that important to the heavies at the top – has declined in importance. The “Downstream” – the refining and marketing of oil, gas and chemicals – is pretty much cast adrift from the Upstream. The engineers, geologists and accountants in the highest echelons of Shell never really understood it anyway! There are no longer any economies of scale from being involved in oil from wellhead to petrol pump, if there ever were.  read more

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