Shell Shock is a timely and valuable history of one of the three remaining oil giants. The authors start with the company’s recent Enron-like crisis where bosses knowingly overstated reserves – and therefore the company value – for four years. Shell wanted to continue with this policy and provide the public with ‘an external story line and investor relations script’. But this book lifts the lid on the story and many other episodes in the company’s unprincipled history.
The first part covers Shell’s early history which will be familiar to those who have read Anthony Sampson’s The Seven Sisters. The second reveals the power battles and marriages of convenience between oil companies and national governments; Shell’s aggressive marketing of persistent pesticides; its lobbying against the Kyoto Protocol; and its disgraceful record in Nigeria.
There’s little if any original research here, with the authors relying instead on newspaper reports and other published sources as well as access to a handful of insiders. But the book neatly brings everything together with an easy-going writing style.
In Nigeria it was financial incentives that led to the overstatement of reserves. In Oman the failure of the company’s Enhanced Oil Recovery scheme puts them among the first to feel the impact of Peak Oil – the proposition that the most easily accessible oil has now been extracted and, from here on in, oil extraction is subject to the law of diminishing returns.
There are many good reasons for getting out of the oil business as soon as possible. Shell Shock piles on a stack more.