A FEW NOTABLE PETROLEUM ENTERPRISES
No brief survey of the petroleum industry would be complete were
reference not made to a few of those remarkable commercial undertakings
in various parts of the world whose interests are not only closely
associated with it, but to whose energies has been due much of the
expansion that has been witnessed in every direction during the past
few decades. It is safe to assert that, had it not been that the
petroleum industry has, in its various industrial and commercial
aspects attracted the attention of some of the finest financial and
business houses in the world, the wonderful progress which has been
recorded would, for the most part, have been impossible.
The first place must of necessity be given to that much maligned
amalgamation of capital, the Standard Oil Company of New Jersey, which
was formed as far back as 36 years ago by Mr. John D. Rockefeller
and his associates for the primary purpose of developments in the
petroleum industry of the United States. At that time, the petroleum
production of America had become quite a factor in commerce, but it
was, obviously, in want of a guiding hand which could not only place
it upon a basis of solidity, but which would tend to remove much of
that gambling element which had become almost part and parcel of all
developments. The Company, at the head of which were several gentlemen
who had already made themselves famous in the land of oil, launched out
in several directions, and, through the numerous subsidiary concerns
which it soon created, it owned very extensive oil-bearing properties
in practically every oil-field of the States, while it built quite a
network of pipe-lines for the conveyance of the oil from the fields to
the refineries, and from the refineries to seaboard. It erected and
equipped oil refineries, and, so as to provide the much-needed foreign
markets for American petroleum products, it built its fleet of oil
tankers; and, lastly, opened depots for the distribution of American
petroleum products all the world over.
At one time, the ultimate success of its vast operations was open to
question, and many there were who predicted that one day it would
ignominiously pass on to the list of oil failures. Indeed, it nearly
came to this on one or two occasions, and it was only owing to the
remarkable perseverance of those at the head of the Company’s affairs
that prevented headlong disaster. The Standard Oil Company soon became
an integral part of the petroleum industry of the United States,
with which it grew up and steadily assumed a position of world-wide
importance, though one which was not unassailable. Its ultimate success
was the chief cause for the multiplication of its critics, and volumes
have been written of its wrong-doings by writers whose knowledge of
the petroleum industry was mostly based upon wilful ignorance of
facts. Consequent upon a decision of the United States Supreme Court
some seven years ago, which held that the Company was violating the
Anti-Trust Law of 1890, the Standard had to rid itself of its various
subsidiary companies (over thirty in number), but it still controls
almost a similar number of concerns to-day which are actively engaged
in the production of crude oil and natural gas. It also owns several of
the largest refineries in the States, while its fleet of oil tankers
will, when present building is completed, be considerably over 300,000
tonnage. Its capital is $100,000,000, and during the last twelve
years it has paid in dividends over 400 per cent., in addition to an
additional cash distribution of 40 per cent.
The Standard Oil Company of New York is another immense concern
which, with a capital of $75,000,000, has its headquarters in the
Standard’s palatial building at 26 Broadway, New York, and interested
principally in the refining industry, its facilities permitting of
20,000 barrels of crude oil being treated daily. Another very prominent
company is the Standard Oil Company of California, with its capital
of $100,000,000. This Company not only produces its crude oil, but
refines it, and engages in the export business. Its refinery at Point
Richmond, California, is reported to be the largest in the world, for
it can treat 65,000 barrels of crude oil daily. Its fleet of tankers
and barges for the export trade is capable of carrying at one trip over
100,000 tons of products, and, for the purposes of its land transport,
it possesses pipe-lines over 1,000 miles long.
The second place of importance in regard to the petroleum enterprises
of international influence must be given to the “Shell” Transport
and Trading Company, Ltd., whose headquarters are in London, with
that well-known oil pioneer, Sir Marcus Samuel, Bart., as its
Chairman. Formed just over twenty years ago for dealing primarily as
a transporter of petroleum products in the Far East, the “Shell” has
steadily and continuously extended the sphere of its operations, until
the result of a carefully thought out policy is seen in its activities
in almost every oil-field of the world. Just over ten years ago, the
Company made an amalgamation with the Royal Dutch Petroleum Company,
or, to give it its correct name, the Koninklijke Nederlandsche
Maatschappij tot exploitatie van petroleum-bronnen in Nederlandsch
Indie (whose capital is £12,500,000), and by reason of so doing it
materially increased its international position and importance. The
“Shell”--Royal Dutch Combine to-day has a controlling interest in some
of the largest operating companies in Russia, Roumania, California,
Mexico, Venezuela, and other oil regions, one of its most recent
extensions being in its advent into the petroleum industry of Trinidad.
The “Shell” Company has a record for successful industrial expansion
which is achieved by few companies in the world of commerce: its
capital is now £15,000,000, and in dividends it has distributed over
300 per cent. Among the “Shell” Company’s associated concerns, that
of the Anglo-Saxon Petroleum Company, Ltd., which is responsible for
the ocean transportation of the petroleum products of the Combine,
takes first place, with its capital of £8,000,000; while the Asiatic
Petroleum Company, Ltd. (capital, £2,000,000), ranks but second. The
recent fusion of the interests of Lord Cowdray with those of the
“Shell,” for the latter has acquired the control of the great Mexican
interests associated with the Pearson company, is another instance of
how the “Shell” Company has trod the road of progress and expansion.
The sudden rise to fame of the oil-fields of Mexico gave birth to what
may safely be referred to as one of the most enterprising amalgamations
of capital in the long list of concerns associated with the petroleum
industry, and it is gratifying to note that this enterprise was solely
due to the well-known firm of Messrs. S. Pearson & Sons. Lord Cowdray,
as the head, was not slow to recognize the vast opportunities which
awaited the development of the Mexican fields, and the formation of the
Mexican Eagle Oil Company, in 1908, with a capital of now $60,000,000
(Mexican), or about £6,125,000 sterling, was the initial result of his
efforts. It was just about this time that the serious fuel oil era
opened, both in this country and others, and it was evident that, for
the purpose of adequately distributing the products of Mexican oil (and
these include the whole range of refined oils, as well as fuel oil),
there was room for the operations of a large and influential company.
The Anglo-Mexican Petroleum Company, Ltd., was accordingly formed, with
Lord Cowdray’s son (the Hon. B. C. Pearson) as Chairman, and a capital
of £2,000,000, to deal with the importation and distribution of Mexican
petroleum products on the English market.
As already stated, the control of this Company has now passed under the
“Shell,” and its future expansion is assured, both at home and abroad.
The Mexican products are transported from Mexico to this country, as
well as many others, by the large fleet of Eagle oil tankers, the
property of the Eagle Oil Transport Company, Ltd., which admirably
managed concern of £3,000,000 capital is also presided over by the Hon.
B. C. Pearson. The Eagle Company possesses the largest oil tankers
afloat, many of them carrying over 15,000 tons of bulk oil, though
others to be built are to be considerably larger; an 18,000 ton tanker
is, indeed, already in commission.
Another highly important enterprise in the world of petroleum is that
of the Burmah Oil Company, Ltd., which, as its name suggests, is
occupied with the petroleum industry in Burmah, and catering for the
almost unlimited needs of the Far East in regard to refined petroleum
products. It controls enormous acres of oil-bearing territory held
under lease from the Burmah Government, possesses extensive refineries
at Rangoon, and has quite a fleet of oil tankers. Its capital is
three and a half millions sterling, and its consistent success may be
judged from the fact that it has paid over 400 per cent. in dividends.
Of comparatively recent date, the Burmah Oil Company has turned its
attention to other fields, particularly to Trinidad, but it is in
connection with the development and subsequent operations of the fields
of Burmah that the Company is chiefly concerned.
The Anglo-Persian Oil Company, Ltd., which is closely allied to the
Burmah Oil Company (capital, £6,000,000) by reason of its large
interest therein, has come into prominence during recent years,
owing mainly to its agreement with the British Government, in which
the latter has invested over £4,000,000 of the public moneys in
the enterprise. The Company acquired its petroliferous concessions
from several interests, including the Burmah Oil Company and the
late Lord Strathcona, which had been granted to them by the Persian
Government. When I mention that the Company’s concessions cover an
area of, approximately, half a million square miles, and on which
petroleum has been found in quantity on the majority of the small
areas already examined, the significance of the enterprise will be
somewhat appreciated. There is no doubt that the company’s success is
doubly assured, and, from this point of view, the investment of the
public moneys in the undertaking has been sound finance, especially
when one considers the important part which petroleum products
under British control must hereafter play. As a matter of fact, the
proposition is a well-paying one to-day, and it is asserted that the
Government’s interest is already worth no less than £20,000,000. Persia
as an oil-producing country will occupy a very prominent place. The
Company has immense petroleum-producing fields: it has its pipe-line
to seaboard, and its refineries, situate on the Persian Gulf. It
has possibilities without end, and it is rapidly availing itself of
them. The Company also now owns the entire capital of three formerly
German-owned concerns in London--the British Petroleum Company,
Ltd., the Homelight Oil Company, Ltd., and the Petroleum Steamship
Company, Ltd. Consequent upon these acquisitions, the Anglo-Persian
Company, Ltd., is making arrangements to enter the English market as
distributors of Persian petroleum. The question of transport need
not here be considered, for the Anglo-Persian Oil Company owns the
entire capital of the British Tanker Co., Ltd. The Company thus has
the producing and refining possibilities: the acquired concern of the
Tanker Company, together with that of the Petroleum Steamship Co.,
will suffice to bring its products to the English market, while the
large distributing organizations of the British Petroleum Company and
the Homelight Oil Company, owning depots all over the country, will
offer easy facilities for the distribution of the petroleum products
imported. My argument all along has been that the advent of the British
Government into this enterprise--I will not call it a speculation,
though at one time it looked like it--places all that private
enterprise, which in the past has brought all the products of petroleum
to our own doors at a reasonable and competitive price, at absolute
discount. Ever since the petroleum industry assumed proportions of
international magnitude, and we became more or less (I should have said
more than less) dependent upon our necessities being met by petroleum
and its products, private enterprise has always kept us well supplied.
But the Anglo-Persian Oil Company has made immense headway since the
Government took an interest in its operations, and its appearance on
the English market as a refiner of Persian crude oil and a distributor
of the products thereof, is but a reflection of the prolific nature
of the vast fields in Persia which it possesses. It has decided upon
having its first English oil refinery near Swansea, and it is reported
that this will be in operation before the end of 1920. It has also
secured the control of the Scottish shale oil refineries which will be
used for the treatment of Persian crude oil when occasion warrants.
[Illustration: A FEW OF THE BURMAH COMPANY’S PROLIFIC PRODUCERS]
One might go on to interminable length in briefly referring to the
great concerns whose operations have been responsible for the expansion
of the world’s petroleum industry to its present magnitude, but the
exigencies of space prevent this. The brief list of companies already
referred to represents an amalgamation of capital to the extent of
nearly £120,000,000 sterling, though this cannot be considered as
representing more than one-half the total world’s investments in
petroleum enterprises.
So far, I have not touched with the magnitude of the petroleum
companies operating in the distributing oil trade of England, though,
to some extent, this may be gathered from the references to such
companies as the “Shell,” the Anglo-Mexican Petroleum Company, etc.
Practically the first company of any magnitude to distribute petroleum
products in this country was the Anglo-American Oil Co., Ltd., which
has actively engaged in this branch of commerce for the past thirty
years. It imported and dealt in American oils long before the advent of
the companies before mentioned, and, to-day, is certainly one of the
largest--if not the largest--company so engaged. Its name is known in
every hamlet in the country: its tank cars are seen on every railway,
and its depots are to be found in every centre throughout the length
and breadth of the land. Its name is legion. Its capital is £3,000,000,
and it is to the Anglo-American Oil Company that, throughout the
clatter of European War, the credit is due for having supplied us with
those almost unlimited quantities of petroleum products so necessary
both on sea and land, for it is the largest importer in the Kingdom.
As its name implies, the “Anglo” deals mostly in American petroleum
products: it was at one time the importing concern of the Standard
Oil Company, but to-day it purchases broadcast in an endeavour--and a
very successful one, too--to supply the British consumer with all the
petroleum products he requires.
The present chapter deals, I feel, most inadequately with the general
question of concerns whose interests are directly allied with that of
petroleum; in fact, it was not my desire to give an encyclopaedia of
the thousands of companies so engaged, but, rather, to suggest the
names of a few which have secured world-wide distinction.