Flannery Fortesque Sir
02/09/11 09:56
Shell had its origins in 1833, when Marcus Samuel started a business in a small shop in London's east end, Houndsditch area. He called it The Shell Shop because the most lucrative aspect of his business in antiques, curios and bric-a-brac was sales of the exotic sea shells he imported from the orient and used to adorn the decorative boxes and bowls then popular in Victorian parlors. The trade in shells became so profitable that he arranged for regular shipments from the Far East, which developed into a thriving general import and export business. By the time Samuel died in 1870, the business was enormously successful, and was continued by his sons, Marcus Samuel and Samuel Samuel, who formed the Marcus Samuel Company in London, and the Samuel Samuel Company in Japan. Shell's first foray into the oil industry came in 1878 when Marcus Samuel (the son) began handling consignments of cased kerosene, then the top-selling fuel in the world. Then in 1890, on the way to a buying trip near Batum on the Black Sea, he noticed the harbor at Constantinople (now Istanbul) was jammed with tanker ships loading oil. He realized there was more money in oil than in sea shells, so he ordered construction of eight tankers.In order to price his product competitively, he would have to transport it in bulk through the Suez Canal, even though the Suez Canal Company had resisted all previous applications to ship oil. So his new tankers were designed by Sir Fortesque Flannery to satisfy the stringent safety regulations of the canal authority. In 1892 his first tanker,the 5,010-ton Murex, was shipping oil from the Middle East through the Suez Canal. On her maiden voyage she carried 4,000 tons of Russian kerosene from Batum, through the canal en route to Singapore and Bangkok. By this time petroleum was also being produced in the East Indies, and in 1890 a company with the complicated name of NV Koninklijke Nederlandsche Maatschappij tot Explotatie van Petroleum-bronnen in Nederlandsche-Indie had been formed to develop an oilfield in Sumatra. Soon after, the company name was shortened to the Royal Dutch Petroleum Company.
Royal Dutch was using a pipeline for transportation, so in 1896, when Henri Deterding joined the company, it was faced with heavy competition from Marcus Samuel's low bulk transport costs. As a result, Royal Dutch began construction of tankers and bulk storage installations, and set up its own sales organization. Marcus Samuel continued an aggressive competition with Royal Dutch, and by 1897 his oil business had become so extensive that he formed a separate company to operate it, The "Shell" Transport and Trading Company, Limited. He chose the name "Shell" from the new firm's connection with his older business. In 1885, Karl Benz had invented the first practical, gasoline-powered motor car, creating an immense potential market for gasoline. In 1901 oil was discovered in Texas, and Samuel arranged with one of its producers to transport and distribute it internationally. That made Shell Transport the first oil company with worldwide sources of production and supplies of gasoline, kerosene and fuel oil. Meanwhile in the United States, Standard Oil (Ohio) Company, led by John D. Rockefeller, was growing rapidly. Oil had been discovered in Pennsylvania in 1859, and in the oil rush that followed, Rockefeller took advantage of many merger opportunities. By 1900 Standard Oil had become the largest company in the U.S. Standard Oil's fields were located in the U.S., and it began exporting its products to the European and Far Eastern markets in competition with both The "Shell" Transport and Trading Company and the Royal Dutch Petroleum Company.
Standard Oil made several unsuccessful attempts to buy or control Shell Transport, but in the years at the turn of the century both Shell Transport and Royal Dutch experienced production setbacks. Moves towards cooperation between Shell and Royal Dutch had been made intermittently from as early as 1882, but negotiations finally began in earnest, and in 1903 they established the jointly-owned Asiatic Petroleum Company Limited. During the next three years the cooperative venture worked extremely well, with the strengths of each company complementing the weaker areas of the other. In 1907 an agreement was signed uniting the Royal Dutch/Shell Group of Companies. The two parent companies became purely holding companies, with Royal Dutch holding 60 percent ownership and Shell Transport 40 percent ownership - exactly as it stands today. At the announcement of the merger, Sir Marcus Samuel, who had been knighted in 1898, said: "The united companies are on absolutely rock bottom, being their own producers, and producing oil as cheaply as it can be produced in any part of the world, whilst their geographical position gives them an indisputable command of the areas in which they trade. "They are their own carriers, passing the oil through their own installations, and distributing it through their own agencies. I cannot imagine any business, therefore, built upon a surer foundation." In 1908 Royal Dutch/Shell began a geological survey in Oklahoma, much to the consternation of Rockefeller and Standard Oil. By 1915 it had opened its first refinery in the U.S. (Martinez, in California). Royal Dutch/Shell quickly expanded around the world, diversifying into numerous energy-related resource areas.
Today, Royal Dutch/Shell Group of Companies is one of the largest business enterprises in the world. The shell-shaped red and yellow emblem, called "the pecten" after a particular kind of sea shell, is perhaps the best-known corporate symbol in the world.Shell is active in more than 140 countries, with one or more operating companies in each of those countries. Together, the operating companies, of which Shell Canada is one, have more than 140,000 employees worldwide.The Group handles about one-tenth of the oil and natural gas in the world outside the former centrally-planned economies, and has interests in nearly all aspects of the oil and chemical business. It also has substantial investments in coal, metals and forestry. At the heart of these businesses is the principle that Shell companies in each country should be independent, operating as part of the local community. Each is run by people who understand the local environment. They have the authority and autonomy to make all normal business decisions.
