MEDFORD 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.
Many of the boats returned
to fishing Wednesday, but
some remained in port be-
or to stock up on ice,
A price also was set for
a 1 b a c o r e tuna Wednesday
when Fran Hoagland of Bum
ble Bee Sea Foods announced
his company was paying $300
a ton for tuna delivered to
the Astoria cannery. The tuna
run is just beginning.
SALT GUIDES CATTLE
On western ranges, from 25
to 80 acres of grazing area
are required for each cow.
Salt feeding stations, encoun
tered . over the range, can
guide cattle to new feeding
areas.
The albatross has a wing
spread of 12 feet, the greatest
of any flying creature, says
the Encyclopedia Americana.
The earth actually is near
est to the sun in January and
farthest from it in July, ac
cording to the Encyclopedia !
Americana.
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