Medford mail tribune. (Medford, Or.) 1909-1989, July 25, 1963, Image 3

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Medford mail tribune., July 25, 1963, Image 3

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Newspaper Page TextMEDFORD MAIL TRIBUNE. MEDFORD, OREGON THURSDAY. JULY 21. 1963 Sea Shell Importer Expands Firm Into Giant Oil Company in London By HARRY HOBBS : United Press International London -fflPD- From the gay little trinket boxes on the Victorian ladies' dressing ta bles there grew a giant and it kept growing, growing and growing. This giant had seven heads and was named Shell. Of this giant's seven heads four were Dutch and three British. Together their brains and talents charted the path of the giant itself and with it the future fortunes of about 500 children it had spawned around the world. This giant still is growing. Its sustenance is oil and the things that flow from it. That's the story of Shell Oil and it is no fairy tale. It all started when a trader in London's sleazy Whitechap el district, whose main busi ness was importing sea-shells from the Far . East, decided to expand. The delicate shells he had been shipping and sell ing, mainly to decorate mi ladys' trinket boxes and oth er ornamental knick - knacks of the age, came from lands that had other things to of fer including oil. New-Fangled Business The Whitechapel trader was Marcus Samuel. Once he began branching out he team ed up with a shrewd Dutch financier named Henri De terding and they launched in to the then new - fangled oil business. That was in 1906. Ultimately their effort grew into the Royal Dutch - Shell group, one of the half dozen largest industrial concerns in the world. The Shell group today com prises two parent companies, the Royal Dutch Petroleum company and the Shell Trad ing and Transport company. Both are holding compa nies. Royal Dutch has a 60 per cent interest in the group and Shell Transport controls the remaining 40 per cent. Britons are easily the larg est stockholders in the group as a whole, with 39 per cent of the total. Second come holders in the United States with 19 per cent and, third, Dutch shareholders with about 18 per cent. Between them these two "parents" operate hundreds of smaller companies that pepper the globe with the Shell flag. Each offshoot enjoys near independence but is subject always to the over-riding loy alty to "The Group." There was a time when the top people in Shell were main ly British or Dutch, but in the process of growth and evo lution nationals of many coun tries now sprinkle the upper echelons of management. Shell has marketing com oanies in almost every land outside the Russian sphere and Communist China. It pro. duces oil in North and South America, Europe, the Middle East, in Africa and in Asia Latin - America is easily its biggest single source. ProsDecting teams are con stantly ferreting for new fields from the Arctic to the Equa tor, both in countries where oil already is produced and where none has yet been found. As the volume of oil pump ed through the world's indus trial and transportation ar leries has grown through the years, so has the Shell group's share of the world s on dusi nrss. In 1907 Shell companies be tween them were producing 22,000 barrels a day. In 1962 riailv output of Shell crude was 2.884.000 barrels a day The volume of oil and its products actually sold by the oi-nim last vear avcraiiea o 170 000 barrels a day - innin nf 12 oer cent on 1961 It also has huge industrial iniprpsls in chemicals, plastics, synthetic rubber, pesticides and fertilizers. The group owns more than 50 refineries in 27 countries. Its continuing research effort is Immense by any standards; 22 research centers employing about 6,000 persons in Britain, Holland, Germany and the United States. Even a brief review of Shell's worldwide operations in a single year is like leafing through a geography book. It covers drilling in Sarawak . . . a new "one-stop-shop" re tail enterprise in Canada bas ed on gas stations . . . prov ing a gas field in Holland . . . readying for new production in Algeria . . . seismic survey ing for oil under the North Sea from Britain . . . the start of a new refinery In Taban gao in the Phillipines . . . helping to lay a 70-mile pipe line in Abu Dhabi's Murban field in the Persian Gulf . . . a new gas discovery in Pak istan . . . the completion of an ethylene plant near Sydney, Australia ... a gas oil unit going "On stream" and a new household detergent material plant in which Shell has a part interest in Japan. Depicting the real size of this oil complex is not easy but two basic facts help. Shell produces about one - ninth of the world's total oil out put and its annual gross in come from sales and opera tions was more than 3 billion pounds (S8.4 billion) in 1962 a figure that dwarfs the na tional revenue of many coun tries. Sales taxes and excise duties absorbed 851 million pounds ($2,383 billion) pay able to various governments. Tanker Fleet Another fact: the tanker fleet in the group's service puts most national navies in the pigmy class and over whelms the world's greatest passenger - cargo lines. By the end of 1962 Shell had 471 ships of better than 11 mil lion deadweight tons work ing for it. Net assets this year in plant, property and equip ment were worth nearly 3.6 billion pounds. ($10.8 billion) with one-third of It concen trated in oil production. Its o t a 1 capital employed, as shown in the balance sheet, was 2.85 billion pounds ($7.98 billion) - more than double what it was in 1954. But a reading of the Shell reports also shows that de spite the size of its finances it has had to make economies because the international oil business is not the plush earner it once was. For in stance, in 1955 net income on net assets was 14.3 per cent. This moved up to 15.3 per cent in 1957 in the post-Suez period, but dipped to 8.5 per cent for both 1960 and 1961 In 1962 the income level moved up to 8.8 per cent - the first rise since 1957 said by observers to be due to increased internal efficien cy and streamlining. I When it comes to earnings, more than half the total Shell ncome comes from operations n Europe and the rest of the Eastern Hemisphere, 18 per cent in the United States and 29 per cent in the rest of the Western hemisphere. Like some other monster enterprises this oil complex- which incidentally operates 27,000 miles of oil and natural gas pipeline-has to generate the bulk of its own capital from sales revenue, whether from oil, gas or chemicals. Last year its capital ex penditure program cost 295 million pounds ($826 million) and the board says it will go even higher next year. But the croup believes in the free world's insatiable thirst for oil - which some experts say will about double from the present 22 mililon barrels a day in the next 12 years-and it plans to be well placed to assuage this thirst. This means coordinating the 500-odd Shell companies around the world with all their varied activities, wheth er producing, Tefining, trans porting, selling or managing the group's real estate inter ests. For this big job there are 15 top "coordinators," key men of whom all are princi pal executives. They sit either in London or the Hague. The coordinators work through four separate "serv ice companies" - two in Brit ain and two in Holland each covering oil and chemicals -which feed and advise the offshoots. At the very top of the structure are Shell's heads, the "Seven Men," the ultimate directing committee who are something of a legend in big business. They are called the "Man aging Directors of the Royal Dutch Shell Group of Corn pan i e s," and are Jonkheer J. H. Loudon, H. Wilkinson, L. Schepers, L. E. Brouwer, J. P. Bcrkin, D. H. Barran and W. F. G. L. Starrenberg. It has been said that at their regular London get-togethers "they do not bother them selves with sums of less than half a million pounds" ($1.4 million). It is their decision at this level that might eventually mean just a fraction of a penny on or off the price of the product that John Citizen of Anytown, Anywhere, might want to buy. And it is their decisions that keep the giant-from-a- Trailers Resume; Nel Fishermen Remain in Strike a 3 Br United Press International Some 3,000 British Colum bia troller fishermen resumed fishing Wednesday and today, leaving about 6,000 net fisher men and allied workers still on strike. Pacific Trotlers Association Secretary Rennie Stanton said the trailers are fishing for sal mon off the west coast of Van couver Island and will market their catches in Seattle. Stanton said American trai lers informed the Canadian group that they had no objec tion so long as the B.C. fish ermen did not undercut U.S. prices. The trailers were forced to stop fishing when the United fuse of threatening weather Fishermen and Allied Work ers went on strike, resulting in the shutdown of marketing operations in Canadian west coast ports. Independents Resume Meanwhile, the last boats from Oregon and Washington coastal ports put out to sea today in quest of salmon. A spontaneous strike by inde pendent fishermen ended Tuesday when buyers raised the price of silvers seven cents to 32 cents per pound. 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