Samuel Business & the Evolution of Shell Oil

In 1833, shopkeeper Marcus Samuel decided to expand his London business. He sold antique oriental shells. Once he aimed to capitalize on a fashion for using them in interior design. And Samuel started importing shells from the Far East. That import-export business foundation had become one of the world's leading energy companies.

The oil market was restrained to lighting and lubricants until 1886. Karl Benz and the first Mercedes brought the internal combustion engine and demand of gasoline. By then, the Samuel business had passed to Marcus Samuel junior and his brother Sam. That time, they exported British machinery, textiles, and tools to newly industrializing Japan and the Far East.

A trip to Japan made Marcus interested in the oil exporting business based in Baku, Azerbaijan, which was part of Russia at that time. The Rothschilds had invested heavily in the 1880s in rail and tunnels to overcome the transport difficulties of getting oil from this landlocked base to the Black Sea. Still, the shipping was a problem, as the oil had to carry in barrels, which could leak and took up much space in the ship’s hold.

Marcus and Sam commissioned a fleet of steamers to carry oil in bulk, using for the first time the Suez Canal. They also set up a bulk oil storage at ports in the Far East and contracted with Bnito, a Russian group of producers controlled by the Rothschilds, for the long-term supply of kerosene. With the maiden voyage of the first bulk tanker, the “Murex”, through the Suez Canal in 1892, the Samuel Brothers had achieved a revolution in oil transportation. Bulk transport substantially cuts the oil cost by enormously increasing the volume that started a new journey. The Samuel brothers initially called their company The Tank Syndicate but in 1897 renamed it the Shell Transport and Trading Company. Petroleum was also being produced in the East Indies. In 1890, a Dutch colony had been formed to develop an oil field in Sumatra and that company became the Royal Dutch Petroleum Company. Under the management of J.B. August Kessler, they built a pipeline and refinery at Pankalan Brandan. Faced with the competition from the Samuels’ low bulk transport costs, Royal Dutch began the construction of tankers and bulk storage installations and set up its own sales organization. But Marcus Samuel’s dependence on Russian producers left him vulnerable and he decided to seek other sources of oil. The Far East was the obvious place to look and the two companies joined forces to protect themselves against the might of Standard Oil, forming the Asiatic Petroleum Company in 1903. In 1904, the scallop shell or pectin replaced Shell Transport’s first marketing logo, a mussel shell. In various forms it has remained in use ever since, becoming one of the best-known corporate symbols in the world.