Analysis of Shell Petroleum Development Company of Nigeria
Analysis of Shell Petroleum Development Company of Nigeria
Shell Petroleum Development Company of Nigeria (SPDC) is a multinational company based in Nigeria for the last 50 years dealing with petroleum products. Apart from offering exploitation and drilling of oil in Nigeria, shell has ventured in the power generation to serve the small and medium enterprises in Nigeria. The production of oil takes place in the Nile Delta region which stretches 30km2 where the company is working in 90 oil fields with a total of 1,000 oil wells. This paper provides a long term strategy that will ensure that the company will be able to expand and be able to withstand both social and political pressure in future.
To fully understand the internal and external environment of the company, PEST analysis has been used to accommodate all the factors. The choice was arrived at to allow the analysis of the strategy at both company and national level. This analysis will be helpful in understanding the market demand, the current business position, the potential opportunities and the obstacles expected.
The political leadership in Nigeria has been keen in ensuring that local companies are protected against competition from international firms. Political instability in Nigeria has greatly affecting the operation of the SPDC in several years. Today, Nigeria continues to have insecurity problems especially in the northern parts of the country where the Boko Haram militia group has been involved with serious confrontation with the military.
The oil industry in Nigeria accounts for 40% national GDP half of which is generated b...
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...o invest in the project.
Another important plan is to convince the government to improve the security in the areas around the oil field. The company should seek push for the government to establish a paramilitary force that will specialize on guarding the oil reserves. The oil export provides 95% of the total exports and 75% of the total federal government revenue; therefore, there is a need to protect the sector to ensure that the economy of the nation is secured.
Nigeria vast oil reserves offer a sustainable resource for the future prospects. Shell Company has the best chance to dominate the oil industry in Nigeria due to its long term investment and its efforts in community development. Investing in power generation will diversify the operation of the company to improve profitability. Also, scaling up will ensure that the company increases its revenue.
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