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Introduction to Brent Spar

Brent Spar Case

Disposal Proposal

Green Peace

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WarwickBusinessSchool

BrentSpar

BrentSparco-ownedbyShellUKandEsso(50:50)LoadingandstoragebuoyforcrudeoilintheNorthSea,200kmnortheastoftheShetlandIslands(Britishwaters)463feethigh,andweightingabout14,500tonsServedfrom1979until1991,readyfordisposal

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FoundedinVancouverin1971,Greenpeacehasgrownintotheworldslargestenvironmentalgroup,withitsbiggestsectioninGermanywhereitenjoyshighacceptanceandpopularity.GreenpeacewasinformedaboutpotentialdeepwaterdisposalofBrentSparandstartedstuntprotesting.ShellUKabandonedtheplanfordeepwaterdisposalunderthepressurefromthepublic.LaterstudyconfirmedthattheoriginalproposalbyShellUKwastherightdecisionintermsofenvironmentalimplication.

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Timeline

MadewithOfficeTimeline2010

Jan1991

SepMay1992

Jan1993

SepMay1994

Jan1995

SepMay1996

Jan1997

Sep

Shellannouncesre-useasNorwegianferryquay29/1/98

AbandonmentPlansubmittedtoUKGovernment1/12/94

IndependentAberdeenUniversityStudy1/2/94

CeasesOperating9/91

Decommissioningstudies

30/4/95 - 23/5/9514/6/95 - 20/6/95

GreenpeaceactivistsonSparGermanpublicprotests

Shellanalysesalternativeproposals 30/6/95 - 29/1/98

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http://www.officetimeline.com/http://www.officetimeline.com/http://www.officetimeline.com/

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Timeline(01/05/9518/10/95)

MadewithOfficeTimeline2010 www.officetimeline.com

May1995

Jun Jul Aug Sep Oct

Greenpeaceadmitsinaccurateclaims5/9/95

UKscientistsreiteratesupport11/9/95

IndependentauditresultsendorseShell

competence

18/10/95

20/6/95

UKscientificdebatesupportsShell30/6/95

Norwaygrantsstoragepermission7/7/95

ShellUK

commissionsindependantNorwegianaudit

12/7/95

Spartowedtodisposalsite11/6/95

ChancellorKohlprotestsatG715/6/95

NorthenEuropeangovernmentsindicateopposition

GermanMinistryoftheEnvironmentprotests

9/5/95

IndependentUKscientistsstatesupport

13/5/95

UKGovernmentannouncesapprovalandcontacts12nations1/5/95

UKGovernmentgrantsdisposallicence5/5/95

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http://www.officetimeline.com/http://www.officetimeline.com/http://www.officetimeline.com/http://www.officetimeline.com/http://www.officetimeline.com/http://www.officetimeline.com/

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BrentSparStakeholders

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BrentSparStakeholders

UKGovernment ProtectenvironmentPublicsentiment

GermanGovernment Publicsentiment

UKUniversities Researchdisposal

methods

Shell

DecommissioningoptionisviableComplieswithregulationsSupportedwithresearch

GeneralPublic

TrustinGreenpeaceEnvironmentally

conscious

Antioilcompanymoral

Greenpeace

EnvironmentalprotectionLookforhighprofile,highlyvisibletargetsMediaattentionPublicsupportIncreaseindonations

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Opportunities(External)1.Explorenewoilfields

2.ExploreSustainableenergysource

3.Establishpartnershipwith

stakeholders

Threats(External)1.Industryregulations

2.Interestgroupadvocating

environmentalissues

3.Increasednegativepublicopinion

Strengths(Internal)1.LeaderinGlobalOilIndustry

2.Politicalalignment3.Integratedupstreamand

downstreamprocesses

4.Brandimage

5.Strongassetbase

Weaknesses(Internal)1.Operatinginunstableenvironment

2.Uncoordinated,decentralisedstructure

SWOTAnalysis

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StrategicFitEnvironment

IncreasedconsciousnessforenvironmentalissuesbythediversifiedstakeholdersGrowingimpressionofmajoroilcompaniesasmonopolist,andhigh-profitseekers

GrowingdemandforenergyStrategy

SustainablelongtermprofitabilityRenewable

energy

sourcesSafety&environmentalconsciousness

Social&CommunityresponsibilityCoreCompetence

Innovation

Technology

ExpertsinoilrigsandhighlydevelopedoperationsOrganization

DecentralisedorganisationstructureHighlyskilledemployees

WidegeographicallocationsStrongcompanyvalues

Wellstructuredrecruitmentanddevelopmentprocessandlearningorganisation10

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RiskCriteria

S

W

O

RiskIdentification(RiskChart) RiskAssessment&RankingRiskReductionStrategies

CrisisPreventionSimulationsT

CrisisManagementEnvironmentalImpact

FinancialImpactHealth&Safety

EngineeringComplexityStakeholderinvolvement

RiskAssessmentChartCriteria

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1

23 4

WarwickBusinessSchool

ScenarioPlanningScenarioPlanningseeksnottopredictthefuturebuttoenvisagethealternateviewsofthefutureintheformsofdistinctconfigurationsofkeyenvironmentalvariables(Schoemaker,1993)

ThestepsinvolvedintheScenario: Elaboratethescenarios-pickingoutelements,likelihoodorplausibility,

constructingcoherentscenariosfrom theelements Analysingtheconsequences-Ifthiscomestrue,whathappenstous? Analysingtheimplicationsnow -Whatshouldwedoknowtoprepareforthis?

StrategicDecisionsKeyDecisionFactors

ScenarioLogics

CrisisScenarios

EnvironmentalForces

Decision

Implications

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Uncertainty

Low

Branddamageorpublicoutrage

High

Technologybreakthrough

Brentdecommissioninglocation Regulationchange

Low

Control

CombiningoutcomesintoscenariosHigh

GovernmentRegulationondecommissioningatSea

Unable toswaypublicopinion

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Costto

organization

CrisisIdentification

Begins

Time

Phases

Anticipation Uncontrolled Controlled ReputationRestorationAnticipation

ThreatoftheactivistsLackofunderstandingofactivist

perspective

Decommissioningplanwasdecentralisedandnotcommunicatedtotherelevant

Identification

Focusedontechnicalissueslosingsightoftheimportantissuepublicopinion&globalbrandprotection

FlawedcommunicationstrategyMixedcommunication

Post-Crisis

IncreaseStakeholderinvolvementImprovemedia&

Communicationsstrategy Amendedcorporatevaluesto

includethelearning Sparwasusedtobuildaquay

CrisisManagementUnanticipatedCrisisAnticipatedCrisis

Continuing

Reputational

Impact