In 1833, Marcus Samuel, the owner of a small antique shop in London, decided to expand his business by adding shells mined in the eastern seas to the assortment of gizmos he offered — the fashion for exotic interior items promised good profits. The instinct of an experienced merchant did not fail — the demand for goods grew so rapidly that Samuel soon established regular imports of shells from East and Southeast Asia, thereby laying the foundation of his export-import business. Up until 1886, that is, until the moment when Karl Benz began producing the first Mercedes cars equipped with an internal combustion engine, generating demand for gasoline, oil was used exclusively for the production of lighting oil and lubricants. By this time, Marcus Samuel’s business had passed into the hands of his sons, Marcus Samuel Jr. and Sam. They exported British machinery, equipment and textiles to Japan and other countries of the Far East, which were gaining pace of industrial development. Rice, silk, porcelain and copper tableware for the Middle East and Europe went in the opposite direction.
The complete merger of the two companies, which resulted in the Royal Dutch Shell concern, occurred in 1907. At the same time, the companies that retained their holding nature received the rights to the following revenue shares: Royal Dutch – 60% and Shell Transport — 40%.
Founder of the Shell Transport and Trading Transport and Commercial company Marcus Samuel
Oil was also extracted in the Dutch East Indies, where in 1890 a company was established to develop an oil birthplace in Sumatra, which was later transformed into Royal Dutch Petroleum. Faced with fierce competition from the Samuel Brothers company, which had an advantage due to the low costs of transporting oil in bulk, Royal Dutch Petroleum started building its own tankers and oil storage facilities and created its own marketing division.
The very first years of activity provided many wonderful opportunities to demonstrate the quality of products in the new, rapidly developing gasoline market. These include car races and air flights, during which world records were set, as well as research expeditions. Captain Scott and E. Shackleton used Shell fuel during their expedition to Antarctica, as well as the famous French aviator L. Bleriot during the first flight across the English Channel in the history of aviation.
By the end of the 20s of the last century, Shell came out on top among oil producing companies – it accounted for 11% of the global volume of crude oil supplies and 10% of bulk tonnage. The rapid development of such areas as processing and marketing led to the creation in 1929 of the Shell Chemicals company, which was tasked with improving technologies for obtaining chemical products from petroleum raw materials.
Shell also actively developed a global network of gas stations. Shell gas stations with their distinctive appearance helped strengthen the concern’s reputation as a reliable supplier of high-quality products.
In the 1930s, oil turned out to be closely connected with politics. In Europe, Shell’s assets were under threat due to the rise to power of the Nazis. After the outbreak of war in 1939 and the subsequent military invasion of the Netherlands, Shell’s headquarters were moved to Curacao.
The London office continued to work, but focused on supporting UK military operations. Oil refineries in the United States produced aviation fuel for the needs of the Allied air forces. Shell Chemicals Corporation produced butadiene, which was the raw material for the production of much-needed synthetic rubber. All Shell tankers were placed at the disposal of the government, as a result of which Shell suffered serious losses, missing 87 vessels.
A series of scientific discoveries and a rapid increase in the number of cars in the United States caused an explosive increase in demand for oil. Shell contributed to the creation of the jet engine, and in 1950 signed a partnership agreement with Ferrari.
Prospecting and exploration work has unfolded in Africa and South America. Processing capacities in the UK were increasing. More power-armed and roomy tankers were built.
In 1947, the first profitable oil well was drilled on the shelf of the Gulf of Mexico. Two years later, Shell extracted its first oil from an underwater well there. By 1955, Shell had 300 offshore wells, most of which were located in the Gulf of Mexico. New deposits have also been discovered in the Niger Delta and Borneo. Commercial oil production in Nigeria began in 1958.
In the early 1960s, Shell strengthened its presence in the Middle East through projects in Oman. Having suffered a number of failures and breaks with partners at the initial stage, the concern was rewarded with the discovery of the Ibal oil field, the largest in Oman. At the beginning of the same decade, one of the richest natural gas deposits was discovered in the Dutch town of Groningen. Soon after, gas was found in the North Sea.
It was a remarkable period for the scientific and applied research of Shell Chemicals, which managed to attract a number of outstanding scientists, including Lord Rothschild and Professor Sir John Camfort. Among the many inventions and discoveries made in the company’s laboratories are epoxy resins, insecticides, including insect repellent under the brand name “Vapona”, as well as liquid detergents.
Another major achievement was the start of sea transportation of liquefied natural gas (LNG). As part of the first such operation in 1964, Conch International Methane, in which Shell owned a 40 percent stake, delivered a batch of LNG from Algeria to the UK for the first time.
In the 1970s, Shell began developing oil and gas fields in the North Sea. This was the most difficult task of all that the concern has ever faced. Despite the fact that the depths here are small, severe weather conditions and the instability of the seabed make it impossible to extract oil without huge investments. Nevertheless, the reduction in supplies from the Middle East and the promising scale of the North Sea deposits justified all the costs.
In the 1980s, it was the turn of the implementation of projects that differed in much harsher conditions than all the previous ones. As an example, we can take the Troll field development project in Norway or the drilling of a record depth (2.3 km) well in the Gulf of Mexico. Large-scale research work has made it possible to achieve significant improvements in drilling technology and master drilling of small-diameter wells and horizontal-inclined drilling. The method of three-dimensional seismic exploration has become widespread.
In the 1990s, the world saw a sharp leap forward in the development of technologies for obtaining fuel from biomass and converting natural gas into liquid hydrocarbons. By this time, the basic technology for producing synthetic liquid fuel had been known for several decades, but the availability of cheap, affordable crude oil did not create an incentive to bring it to industrial use. The launch of the first LNG plant in Bintulu, Malaysia, in 1993 marked one of the main directions of Shell’s work for the next decade.
At the turn of the century, Shell began to turn towards new global growth regions, in particular to China and Russia. The concern is implementing several large oil and gas projects in Russia — in Salym and Sakhalin, and has also built a powerful petrochemical plant in China, supplying products to the fast-growing consumer market. The implementation of exploration projects is facing increasing difficulties, as the concern has to operate in increasingly harsh natural conditions. Shell’s reputation as a pioneer of technological innovation greatly contributes to entering into partnerships with governments of countries with potential for the development of minerals.
In 2005, the concern underwent a radical structural reorganization: the partnership between Royal Dutch and Shell Transport and Trading, which had lasted for almost a century, was suspended, and Shell merged its corporate structure into a single holding company Royal Dutch Shell plc. The headquarters of the new company is located in The Hague. The original partnership celebrated its centenary on July 5, 2007.