A case study of shell at Sakhalin: having a whale of a time?

Abstract

AbstractThis is a case study on the world's largest oil and gas project, at the Sakhalin Islands, Russia. Shell is the key promoter of this project. The case highlights the sustainability challenges that Shell faced when working on the mega‐project. By their very nature, all such projects involve disruptions in the environmental and social fabric of the project site. NGOs often take up these issues and create international headlines, bringing pressure on the management team. The Russian government also changed its stand over a period of time. While many of these issues are valid in their own way, they often create managerial dilemmas. Traditional management approaches to community development and environmental conservation fell short of stakeholder expectations at Sakhalin. The issue of saving around 100 endangered whales put a cloud of doubt over this $20 billion project. The case highlights strategic issues involved in crafting sustainability strategies at mega‐projects, possible pitfalls and the challenge of balancing project execution and stakeholder commitments against an unstable political backdrop. As Shell plans to start many exploration projects in bio‐diversity rich parts of the world, the Sakhalin project acts as a pilot to and reminder of social responsibility challenges to big multi‐nationals. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.