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. From exploring and producing oil and gas to the development of new energy sources -discover how our businesses are helping to meet the energy needs of society, in ways that are economically, socially and environmentally viable.
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. With Shell active in more than 70 countries, this means our Contracting & Procurement specialists are purchasing from thousands of suppliers worldwide. This currently amounts to about $35 billion in annual spend.
In line with our Shell General Business Principles and Shell Supplier Principles, we seek to work with contractors and suppliers who contribute to sustainable development and are economically, environmentally and socially responsible.
We purchase products and services that support our approach to sustainability. For example, we work with suppliers that can build pipelines using non-metallic materials, where appropriate, instead of carbon steel. Non-metallic pipes have a smaller carbon footprint than carbon steel pipes. Transportation and installation are also easier as non-metallic pipes weigh around a quarter less than the equivalent size steel pipe. Shell Shipping also uses a supplier that provides low-friction paint for ship hulls, which makes the ship more fuel efficient.
It is important for us to share the benefits of its projects and operations by creating jobs and helping local businesses and economies to develop.
At the outset of a project we consider how we can make the best use of local suppliers and locally-produced materials, where possible. We often introduce local suppliers to global suppliers, which provides both parties with potential new business opportunities and the benefit of shared experience.
Some of these introductions take place in Supplier Forums, which have been held over the last few years in locations such as Nigeria, China, India and Mexico.
For example, in Malaysia we spent a total of around $3 billion in contracts in 2013 across 150 local suppliers. In Nigeria, Shell introduced a new scheme supported by five local banks to assist Nigerian contractors in accessing finance. In 2013, the funding scheme enabled 39 contractors to access loans worth over $700 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
Building strong relationships with our contractors and suppliers is essential to delivering new projects and running our operations. In line with our Shell General Business Principles and Supplier Principles, we seek to work with contractors and suppliers who contribute to sustainable development and are economically, environmentally and socially responsible.
We recognise the importance of working with suppliers and contractors that respect human rights, in line with the UN Guiding Principles on Business and Human Rights, including the fundamental conventions of the International Labour Organization (ILO), and that care for their people. We have the responsibility and commitment to respect human rights with a strong focus on how we interact with communities, security, labour rights and supply chain conditions.
For example, we have agreed to join forces with BP, Equinor and Total, to create a collaborative approach to human rights supplier assessments in the energy industry. The sharing mechanism across the participating parties aims to support the improvement of working conditions in our companies’ supply chains. Note that the initiative does not include collaboration on selection of suppliers, which continues to remain the independent decision of each participant.
In addition, we work to establish relations with suppliers which allow us to share our respective expertise and build on innovative thinking. Examples are those with the main contractors on our ground-breaking project to design and build a floating liquefied natural gas plant, Prelude FLNG. We have also joined forces in research and development with selected companies to boost oil and gas production and extend the life of existing fields.
In accordance with our Shell General Business Principles and Group Code of Conduct, we seek to work with contractors and suppliers who contribute to sustainable development and are economically, environmentally and socially responsible.
Find out moreFind out about our business, people and how we are working to power progress together with more and cleaner energy solutions.
Shell is a global group of energy and petrochemical companies that aims to meet the world’s growing need for more and cleaner energy solutions in ways that are economically, environmentally and socially responsible.
At Shell, we share a set of core values – honesty, integrity and respect for people – which underpin all the work we do. The Shell General Business Principles, Code of Conduct, and Ethics and Compliance Manual help everyone at Shell act in line with these values and comply with relevant laws and regulations.
Our Code of Conduct describes how the Shell General Business Principles must be applied. We support our staff and contractors in meeting our standards and react appropriately when violations occur.
Managing and minimalising risks to people and the environment matters more than anything we do. Safety is critical to the responsible delivery of energy. We develop and operate our facilities with the aim of preventing any incidents that may harm our employees and contractors or nearby communities, or cause environmental impact. Our strong relationships with our suppliers and contractors are essential to ensure outstanding HSSE performance across all of our activities.
We have the responsibility and commitment to respect human rights with a strong focus on how we interact with communities, security, labour rights and supply chain conditions.
