Shell is facing an escalating PR crisis in what commentators are labelling 'a social media oil spill'.

It started with a website

Two months ago the website Arctic Ready was launched, supposedly to educate the public about the company's Arctic drilling project.

Arctic Ready was similar in appearance to the Arctic section of Shell's website, featuring an interactive social media component and games like 'Angry Bergs'.

The website was in fact set up by Greenpeace and activist group the Yes Men.

Oils ain't oils

A key component of the site was the 'ad generator' that allowed visitors to write captions under images of Arctic wildlife.

'Ads' with ironic captions were quickly generated, including an Arctic Fox over the caption 'You Can't Run Your SUV On Cute' and one of a bird above the tagline 'Birds Are Like Sponges… For Oil!'

Viral Video

In June Greenpeace, the Yes Men and members of the Occupy Movement posted a video on YouTube showing a bungled Shell corporate event in Seattle. The spoof video garnered 700,000 views on its first day and soon went viral.

To make the video appear more legitimate, Greenpeace and the Yes Men sent out fake legal letters on behalf of Shell threatening bloggers who reported the story.

Twitter greases the wheels

The next stage of the social media onslaught, and so far the most damaging, has been the fake Shell Twitter account operating under the handle @ShellisPrepared.

The account paints Shell's social media team as inept and has fooled many into thinking it is a legitimate account. So far the account has implored users to stop sharing the Arctic Ready 'ads' and threatened legal action to users who link to the fake website.

This activity has led to the haghtag #ShellFail and #arcticready trending worldwide.

Stepping up the pressure, Greenpeace released another spoof video this week showing Shell workers being instructed to clean up an oil spill with a bucket and mop.

Fuelling debate

Shell's response has been muted so far, with an official statement denying any association with the hoax website, YouTube videos and Twitter account.

While social media has often been used to gain leverage for issues, the elaborate staging of both a fake corporate website and social media response appears to be the first of its kind.

Mopping up

Whether Shell can legally take action to have the Arctic Ready website taken down remains to be seen, as laws surrounding online identify theft remain murky. Even if it does this would potentially play into Greenpeace's hands and generate more exposure for Shell's Arctic drilling program.

And while Twitter's user guidelines forbid accounts impersonating an individual or brand, it hasn't removed the @ShellisPrepared account.

Whatever happens, Greenpeace seems to have had more success targeting Shell online than on the high seas.