Shell Pakistan
 | |
| Type | Public limited company |
|---|---|
| Traded as | KSE: SHEL |
| Industry | Oil and gas |
| Headquarters |
Shell House Karachi, Pakistan (Headoffice) |
| Products | gasoline, aviation fuels, cng and lubricants |
| Website | Shell Pakistan |
Shell Pakistan Limited (SPL) is a subsidiary of Royal Dutch Shell Plc and has been in South Asia for over 100 years.[1] Shell’s flagship business in Pakistan is the downstream retail marketing company, Shell Pakistan Limited, which has interests in downstream businesses including retail, lubricants, commercial fuels and aviation[2]
Shell Pakistan has a primary listing on Karachi Stock Exchange. Its also listed on Lahore and Islamabad Stock Exchange
History
Royal Dutch Petroleum Company spent almost 12 challenging years exploring oil and getting production under way before being registered as an enterprise in 1890. In February1892 these efforts were rewarded by crude oil flowing from the company’s wells in the north Sumatran jungles. The remote location of these wells required Royal Dutch Petroleum to emerge as an integrated oil company from well-head to consumer, exporting its products around Asia. To do this, Royal Dutch Petroleum reached an agreement with merchant trading company M Samuel & Co to operate the Asian arm of their transportation business. The fleet formed an integral part of Shell’s entrance into Asian oil market by shipping kerosene in bulk from Russia via the Suez Canal. In 1897, the venture was incorporated as Shell Transport and Trading Company. In 1907 Royal Dutch Petroleum Company merged with Shell Transport and Trading Company.[3] Though the two companies originated from different positions – Royal Dutch as an upstream producer and refiner, and Shell Transport a midstream transporter and wholesaler of oil – because both companies were focused on Asian markets, they were able to combine their marketing operations in Asia to form a joint venture called Asiatic Petroleum.
Name
The name Shell come from the Shell Transport and Trading Company. In 1833, Marcus Samuel, founded an import business to sell seashells to London collectors. While collecting seashell specimens in the Caspian Sea in 1892, the younger Samuel realised there was potential in exporting lamp oil from the region. He commissioned the world's first purpose-built oil tanker, the Murex (Latin for a type of snail shell) to mark his company’s entrance into this market.
Logo/Pecten
The Shell logo is one of the most well-known commercial symbols in the world. The logo or pecten’s design was based on the sea shell Pecten maximus, the giant scallop. The yellow and red colours used are linked to the colours in the Spanish national flag, as some of Shell’s earliest service and fueling stations were built in California, which was an early Spanish colony. The slash was removed from the name Royal Dutch/Shell in 2004, concurrent with moves to merge the two legally independent companies (Royal Dutch Petroleum and Shell Transport and Trading) to the single legal entity which exists today.
Shell’s History in the Sub-continent
- 1898 Asiatic Petroleum (percentage ownership of Shell – 100%)
- 1928 Burmah Shell (percentage ownership of Shell – 50%)
- 1947 Burmah Shell (Pakistan) (percentage ownership of Shell – 50%)
- 1970 Pakistan Burmah Shell (percentage ownership of Shell – 24.5%)
- 1993 Shell Pakistan Ltd. (percentage ownership of Shell – 51%)
- 2000 Shell Pakistan Ltd. (percentage ownership by Shell – 59.7%)
- 2002 Shell Pakistan Ltd. (percentage ownership by Shell – 76.1%)
Shell Businesses/Stakeholders
Shell Pakistan – OP Marketing (Aviation and Commercial)
- Lubricants
- Retail
- Pakistan Refinery Limited. (PRL)
- Pak Arab Pipeline Co. (PAPCO)
Aviation
The Aviation business is an important and profitable part of Shell Pakistan Limited’s (SPL) portfolio. Shell's presence at six major airfields across Pakistan has enabled the company to be involved in supplying both domestic and foreign airline carriers, making Shell Aviation the second largest Jet fuel supplier in Pakistan with over 30% market share.
Commercial Fuels
SPL’s Commercial Fuels business is focused on white-oil sales to the large agricultural market in Pakistan and white/black-oil sales to industrial and power generation customers. This is a small but profitable and growing business.
Shell Lubricants
SPL is the largest lubricant marketing company in Pakistan with over 20% share of the total lubricant market in the country. SPL’s lubricant business is the second most profitable within Shell’s Global Lubricant portfolio. The business is focused on sales of key Shell brands (Rimula, Helix & Advance) to high street traders and the transportation sector as well as heavy-duty brands to industrial customers and power sector customers.
Shell Retail
SPL is the second-largest oil marketing company (OMC) and the largest private OMC in Pakistan with a 25% share of the white-oils market. The Retail business comprises over 800 retail outlets. SPL remains at the helm of industry-wide efforts to advocate for world-class technical standards for the oil marketing sector in Pakistan and to assist the Government in deregulating the sector.
Pakistan Refinery Limited
Pakistan Refinery Limited (PRL), located at Karachi, is the third largest refinery in the country,[4] with a refining capacity of 2.1 mn tons per annum. The refinery was set up in the 1960s, and Shell has a 26% equity interest in it. With the introduction of the deemed duty element in the oil products pricing mechanism in 2001, the refineries profitability has improved considerably. As 50% of its profits are mandated by the Government to be retained for upgrading/modernization, PRL is now embarking on major up-gradation projects including expansion and de-sulphurization.
Pak-Arab Pipeline Company Limited
In August 2001, a new company called Pak-Arab Pipeline Company (PAPCO) was formed to construct and operate a critical 840 km white-oil pipeline for transportation of AGO from Karachi to major markets in the centre and north of Pakistan. SPL has a 26% equity interest in PAPCO and the PAPCO’s Chief Financial Officer remains a SPL nominee. The pipeline has been operational since Q1/2005 and is an important element in business continuity and transport safety in the sector.
Corporate affairs
Management
Farooq Rehmatullah succeeded David M Weston in 2001, to become the first Pakistani national CEO of SPL. He retired in 2006. SPL Managing Directors
- Farooq Rehmatullah – April 2001-June 2006
- Quinten Disilva – May–August 2006
- Zaiviji Ismail bin Abdullah – September 2006-July 2011
- Sarim Sheikh – April 2011-July 2012
- Omar Y Sheikh – June 2012 – present
On June 17, 2012, Omar Y Sheikh became the new Country Chair/Managing Director for Shell Pakistan Limited. Omar has worked for Shell since 1995 in Retail, Commercial Lubricants and Downstream Strategy Portfolio roles. Omar also worked at Shell Internationals Ltd. In London with senior Downstream leadership on developing business strategy and implementing portfolio transactions. In his current role at MD, he is also General Manager Lubricants.
Board of Directors
- Omar Y Sheikh (Chairman)
- Rafi H Basheer
- Farrokh K Captain
- Chong Keng Cheen
- Imran R Ibrahim
- Nasser N S Jaffer
- Zaffar A Khan
- Michael Noll
- Haroon Rashid
- Badaruddin F Vellani
Corporate communications
Shell is a public listed company thus it is legally bound to disclose its financial health. Shell holds regular dialogues and engagement sessions with its stakeholders to report performance by providing complete relevant information to legitimately interested parties, subject to any overriding considerations of business confidentiality.
Health, Safety Security & Environment (HSSE)
Shell Pakistan Limited has made significant achievements in embedding a safety culture in its own operations and the Oil & Gas industry. During the 1990s SPL recorded an average of 60+ fatalities, while in 2010 the company achieved zero recordable fatalities and has maintained that to date. Shell took global initiative goal zero with the belief that all accidents can be prevented and Shell Pakistan has been achieved significant results by implementing goal zero.
- Shell was recently awarded a certificate of appreciation from the UN for achieving 1,000 safe humanitarian flights during flood relief operations in 2011.
- In 2009 the company reached 10mn man hours without any Loss Time Injury (LTI).
- Shell goal zero for 2012 is to reach 20mn man hours without any LTI.
- Shell was one of the first OMC’s in Pakistan to introduce and advocate international safety standards for transport, storage and retail which have been promulgated by the Government in 2010.
- Shell spearheaded the National Road Safety Council with industry partners to promote road safety education at retail sites, schools and in society.
Social Investment / CSR
Shell contributes to sustainable development by helping the world meet growing energy needs in economically, environmentally and socially responsible ways. It aims to deliver benefits and reduce impact through its Social Investment portfolio through which it invests in specific projects. Sustainable development for Shell also means benefitting local communities it works in, reducing the impact its operations have on the environment, adding business value to customers and business partners, and developing and creating opportunities for staff. The Social Investment portfolio at Shell is aligned with three broad global thematic areas: Enterprise[5][6] Development, Road Safety,[7][8] and Access to Energy[9]& Education.
In a country with a population of 180 million and an unemployment rate of over 8%, alternative career and enterprise options are a huge opportunity for socio-economic stability and growth. Through Shell Tameer, a youth entrepreneurship programme, Shell Pakistan builds capacity in people between the ages of 18 and 32 to look at entrepreneurship as a viable career option. Shell keeps an eye on safety through its belief that quality products should accompany better life & health. It has conducted a number of Road Safety related campaigns with stakeholders in the public and private sectors. Free eye camps planned with LRBT across the country are regular features in this campaign portfolio. Drivers, one of Shell’s most important stakeholders, are one of the beneficiaries of these eye camps. Shell has also conducted Road Safety Awareness Programmes in numerous schools on its supply routes across Pakistan for over 3,500 children. Shell is working with partners PPAF and HANDS to develop alternate sources of energy and energy efficient stoves while working on a livelihood improvement project in a local community of waste pickers on the outskirts of Karachi. Shell also hosts the Shell Eco-marathons around the globe where student teams design, build and race ultra fuel efficient cars. The Eco-marathons are one way Shell demonstrates its commitment to meeting the growing energy demands of the world through innovation and youth-focus.
“SPL endorses ‘Quality Education for the less privileged’ and has supported TCF since 2006. Through this partnership 6 school units have been built in flood and earthquake devastated areas of Pakistan. An education fund has also been created, called ‘Fueling Education’, providing scholarships at TCF schools nationwide for Retail forecourt staff, Lubes & Supply dealers and driver’s children. Shell believes that through partnerships and building synergy it can help build sustainable communities.”
Shell Pakistan in 2012
Shell Pakistan Limited (SPL) has more than 850 retail stations in more than 330 cities, having 20% market share and is the largest foreign investor in Pakistan’s oil marketing sector. Shell has been the leader in the lubricants sector since 2002, currently with more than 40% share of the organized sector. Shell’s Commercial Fuels business (including commercial transport) is a significant opportunity for growth. Its aviation business supplies fuels to six key airports across Pakistan. Shell has 30% interest in the Pakistan Refinery Limited (PRL) (average production: 40,000 bpd) located in Karachi and a 26% interest in US$480mn 780 km white oil pipelines. In FY2010-2011 the Company earned a profit after tax of Rs. 906 million and recorded 11% growth in net revenue and 3% increase in gross profits compared to previous year.[10]
Fast facts
- The Shell brand is one of the most favored brands in Pakistan with a brand share preference (BSP) of 49%
- The company is the largest international marketer of oil products with 850+ retail stations and 17% market share in white oil products, supplied by 7 depots across the country
- Shell Lubricants have strong customer preference and are market leaders with over 40% share in the organized sector
- Aviation is the second largest provider of jet fuels and is present at five airfields.
- From 2008 to 2010, Shell made a significant investment to implement Global SAP in Pakistan to upgrade its systems and processes for increased customer services.
Government receivables
One of SPL’s biggest challenges to doing business in Pakistan is Government receivables owed to it. These receivables are due on account of price differential claims, sales tax and Petroleum Development Levy. Currently, they stand at an all-time high of Rs 13,800 million (94.5 million GBP). Due to delays in the receipt of these receivables, Shell suffered approximately Rs 1,700 million in additional financing costs in 2011 to run day to day operations. Note: Given below are headings in Wikipedia article on Royal Dutch Shell.
Notes
- ↑ http://www.shell.com.pk/home/content/pak/aboutshell/at_a_glance_tpkg/
- ↑ http://www.shell.com.pk/home/content/pak/aboutshell/shell_businesses/pakistan_business_structure/
- ↑ http://en.wikipedia.org/wiki/Royal_Dutch_Shell#History
- ↑ http://www.prl.com.pk/about/companyprofile.php
- ↑ http://www.shell.com/home/content/environment_society/society/our_neighbours/social_investment/
- ↑ http://www.shell.com.pk/home/content/pak/environment_society/sustainable_development_tpkg/
- ↑ http://www.grsproadsafety.org/
- ↑ http://www.shellhamqadam.com/2012/May/pages/road.html
- ↑ http://www.shell.com.pk/home/content/pak/environment_society/environment_tpkg/
- ↑ http://www-static.shell.com/static/pak/downloads/about_shell/2012/shell_annual_report_2011v2.pdf
References
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