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Shell for suppliers
Building strong relationships with our contractors and suppliers is essential to delivering new projects and running our operations. We recognise and select them for their commitment and expertise in areas that include innovation, safety, quality and sustainability. This approach, combined with our global purchasing power, helps us to gain competitive advantage.
Shell Contracting & Procurement is responsible for nearly everything that Shell buys across the full scope of activities in the Upstream, Downstream, and Projects & Technology sectors of our business. This currently amounts to about $65 billion in annual spend. With Shell active in more than 80 countries, this means our Contracting & Procurement specialists are purchasing from thousands of suppliers worldwide.
In line with our Shell General Business Principles, we seek to work with contractors and suppliers who contribute to sustainable development and are economically, environmentally and socially responsible. The Shell Supplier Principles provide a simple and consistent framework of our expectations for all our suppliers in the following areas:
• Business integrity;
• Labour conditions and human rights;
• Social performance.
Download the Shell Supplier Principles in your local language:
Local development and global sources
Wherever we operate we aim to buy goods and services from local suppliers. For instance, in 2010 the value of contracts awarded to Nigerian companies was $947 million. In Canada, Shell has invested more than $1 billion with aboriginal contractors over six years on the Athabasca Oil Sands Project. This has helped to boost the local economy and develop individual skills. We built the Sakhalin 2 mega project in Russia’s far east, for example, using a workforce which was 70% Russian and with many project materials from Russian firms.
We also buy goods and services in the global market to secure cost competitive, international rates, increasingly through framework agreements. Our approach of selecting primary suppliers of specific goods and services also means the supplier benefits from large orders and we can bring down costs through economies of scale.
We often introduce local suppliers to global suppliers, which provides both parties with potential new business opportunities and the benefit of shared experience. In 2011 Shell sponsored a joint Nigeria-China supplier forum in Abuja, Nigeria, and held additional forums in India, China, and Mexico.
We work to establish agreements with suppliers which allow us to share our respective expertise and build on innovative thinking.
Other examples of effective relations with suppliers include those with the main contractors on our groundbreaking project to design and build a floating liquefied natural gas plant, Prelude FLNG.
We have also joined forces in research and development, for example through the multi-year research technology co-operation agreement to boost oil and gas production and extend the life of existing fields.