Gulf Oil
Gulf Oil was a major American global oil company that was in business from 1901 to 1985. The eighth-largest American manufacturing company in 1941 and the ninth largest in 1979, Gulf Oil was one of the Seven Sisters oil companies. Prior to its merger with Standard Oil of California, Gulf was one of the chief instruments of the Mellon family fortune; both Gulf and Mellon Financial had their headquarters in Pittsburgh, Pennsylvania, with Gulf's headquarters, the Gulf Tower, being Pittsburgh's tallest building until the completion of the U.S. Steel Tower.
Gulf Oil Corporation ceased to exist as an independent company in 1985, when it merged with Standard Oil of California, with both rebranding as Chevron in the United States. Gulf Canada, Gulf's main Canadian subsidiary, was sold the same year with retail outlets to Ultramar and Petro-Canada and what became Gulf Canada Resources to Olympia & York.
Other aspects of the Gulf brand name, and a number of the constituent business divisions of GOC, have continued to exist. In its present incarnation, is a "new economy" business, employing very few people directly and its assets mainly in the form of intellectual property: brands, product specifications and scientific expertise. The rights to the brand in the United States are owned by Gulf Oil Limited Partnership, which operates service stations and petroleum terminals; it is headquartered in Wellesley, Massachusetts. The corporate vehicle at the center of the Gulf network outside the United States, excluding Spain and Portugal, is Gulf Oil International, a company owned by the Hinduja Group. That company's focus is primarily in the provision of downstream products and services to a mass market through joint ventures, strategic alliances, licensing agreements, and distribution arrangements. In Spain and Portugal, the Gulf brand is owned by TotalEnergies SE.
History
1901–1982
The business that became Gulf Oil started in 1901 with the discovery of oil at Spindletop oilfield near Beaumont, Texas. A group of investors came together to promote the development of a modern refinery at nearby Port Arthur to process the oil. The largest investors were Andrew Mellon and William Larimer Mellon Sr., of the Pittsburgh Mellon family. Other investors included many of Mellon's Pennsylvania clients as well as some Texas wildcatters. Mellon Bank and Gulf Oil remained closely associated thereafter. The Gulf Oil Corporation itself was formed in 1907 through the amalgamation of a number of oil businesses, principally the J.M. Guffey Petroleum Company, Gulf Pipeline Company, and Gulf Refining companies of Texas. The name of the company refers to the Gulf of Mexico where Beaumont lies.Output from Spindletop peaked at around just after it was discovered and then started to decline. Later discoveries made 1927 the peak year of Spindletop production, but Spindletop's early decline forced Gulf to seek alternative sources of supply to sustain its substantial investment in refining capacity. This was achieved by constructing the 400-mile Glenn Pool pipeline connecting oilfields in Oklahoma with Gulf's refinery at Port Arthur. The pipeline opened in September 1907. Gulf later built a network of pipelines and refineries in the eastern and southern United States, requiring heavy capital investment. Thus, Gulf Oil provided Mellon Bank with a secure vehicle for investing in the oil sector.
Gulf promoted the concept of branded product sales by selling fuel in containers and from pumps marked with a distinctive orange disc logo. A customer buying Gulf-branded fuel could be assured of its quality and consistent standard..
Gulf Oil grew steadily in the inter-war years, with its activities mainly confined to the United States. The company was characterized by its vertically integrated business activities and was active across the whole spectrum of the oil industry: exploration, production, transport, refining and marketing. It also involved itself in associated industries such as petrochemicals and automobile component manufacturing. It introduced significant commercial and technical innovations, including the first drive-in service station, complimentary road maps, drilling over water at Ferry Lake, and the catalytic cracking refining process. Gulf also established the model for the integrated, international "oil major", which refers to one of a group of very large companies that assumed influential and sensitive positions in the countries in which they operated. In 1924, it acquired the Venezuelan-American Creole Syndicate's leases in the strip of shallow water 1.5 kilometers wide along the Lake Maracaibo east shore.
In Colombia, Gulf purchased the Barco oil concession in 1926. The government of Colombia revoked the concession the same year, but after much negotiation Gulf won it back in 1931. However, during a period of over-capacity, Gulf was more interested in holding the reserve than developing it. In 1936 Gulf sold Barco to the Texas Corporation, now Texaco, and they would eventually all merge as Chevron.
Gulf had extensive exploration and production operations in the Gulf of Mexico, Canada, and Kuwait. The company played a major role in the early development of oil production in Kuwait, and through the 1950s and '60s apparently enjoyed a "special relationship" with the Kuwaiti government. This special relationship attracted unfavorable attention since it was associated with "political contributions" and support for anti-democratic politics, as evidenced by papers taken from the body of a Gulf executive killed in the crash of a TWA aircraft at Cairo in 1950.
In 1927 Gulf Oil obtained an option on an oil concession in Bahrain, which was sold to Standard Oil of California in 1928 and led to the founding of the Bahrain Petroleum Company. Gulf Oil was also a minor shareholder in the Iraq Petroleum Company until 1934. In 1934, the Kuwait Oil Company was formed as a joint venture by Anglo-Persian Oil Company now BP, and Gulf. Both APOC and Gulf held equal shares in the venture. KOC pioneered the exploration for oil in Kuwait during the late 1930s. Oil was discovered at Burgan in 1938, but it was not until 1946 that the first crude oil was shipped. Oil production started from Rawdhatain in 1955 and Minagish in 1959. KOC started gas production in 1964. It was the cheap oil and fuel being shipped from Kuwait that formed the economic basis for Gulf's diverse petroleum sector operations in Europe, the Mediterranean, Africa, and the Indian subcontinent. These last operations were coordinated by Gulf Oil Company, Eastern Hemisphere Ltd. from their offices at 2 Portman Street in London W1. While serving as General Manager and Vice President of Gulf Oil, Willard F. Jones facilitated the expansion of crude oil import from Kuwait, a nation that was - at the time - a yet incipient supply region to the United States. This expansion program implemented by Robert E. Garret and Jones consisted of construction of a fleet of supertankers and was meant to "result in a sharp increase in the processing of crude oil and various petroleum products at a time when the domestic demand for products at an unprecedented peak."
File:Gulf Oil Corp., Alkylation Area.jpg|thumb|left|Gulf Oil's Port Arthur, Texas, refinery, alkylation area,
Gulf expanded on a worldwide basis from the end of the Second World War. The company leveraged its international drilling experience to other areas of the world, and by mid-1943 had established a presence in the eastern oil fields of Venezuela as the Mene Grande Oil Company. Much of the company's retail sales expansion was through the acquisition of privately owned chains of filling stations in various countries, allowing Gulf outlets to sell product from the oil that it was "lifting" in Canada, the Gulf of Mexico, Kuwait, and Venezuela. Some of these acquisitions were to prove less than resilient in the face of economic and political developments from the 1970s on. Gulf invested heavily in product technology and developed many specialty products, particularly for application in the maritime and aviation engineering sectors. It was particularly noted for its range of lubricants and greases.
File:GULF AND ARCO INSTALLATIONS- - NARA - 549978.jpg|thumb|Gulf and ARCO tank farms and tanker docks, Port of Philadelphia, 1973
Gulf Oil reached the peak of its development around 1970. In that year, the company processed of crude daily, held assets worth $6.5 billion, employed 58,000 employees worldwide, and was owned by 163,000 shareholders. In addition to its petroleum marketing interests, Gulf was a major producer of petrochemicals, plastics, and agricultural chemicals. Through its subsidiary, Gulf General Atomic, Inc., it was also active in the nuclear energy sector. Gulf abandoned its involvement in the nuclear sector after a failed deal to build atomic power plants in Romania in the mid-1970s.
In 1974, the Kuwait National Assembly took a 60 percent stake in the equity of KOC with the remaining 40 percent divided equally between BP and Gulf. The Kuwaitis took over the rest of the equity in 1975, giving them full ownership of KOC. This meant that Gulf had to start supplying its downstream operations in Europe with crude bought on the world market at commercial prices. The whole GOC edifice now became highly marginal in an economic sense. Many of the marketing companies that Gulf had established in Europe were never truly viable on a stand-alone basis. In 1976 during the nationalization of Venezuelan oil, the transfer of properties, benefits, equipment of Gulf Oil to PDVSA was carried out without any setback and with full satisfaction on both parts.
Gulf was at the forefront of various projects in the late 1960s intended to adjust the world oil industry to developments of the time including closure of the Suez Canal after the 1967 war. In particular, Gulf undertook the construction of deep-water terminals at Bantry Bay in Ireland and Okinawa in Japan capable of handling Ultra Large Crude Carrier vessels serving the European and Asian markets respectively. In 1968, the Universe Ireland was added to Gulf's tanker fleet. At, this was the largest vessel in the world and incapable of berthing at most normal ports.
Gulf also participated in a partnership with other majors, including Texaco, to build the Pembroke Catalytic Cracker refinery at Milford Haven and the associated Mainline Pipelines fuel distribution network. The eventual reopening of the Suez Canal and upgrading of the older European oil terminals meant that the financial return from these projects was not all that had been hoped for. The Bantry terminal was devastated by the explosion of a Total tanker, the M/V Betelgeuse, in January 1979 and it was never fully reopened. The Irish government took over ownership of the terminal in 1986 and held its strategic oil reserve there.
In the 1970s, Gulf participated in the development of new oilfields in the UK North Sea and in Cabinda, although these were high-cost operations that never compensated for the loss of Gulf's interest in Kuwait. A mercenary army had to be raised to protect the oil installations in Cabinda during the Angolan civil war. The Angolan connection was another "special relationship" that attracted comment. In the late 1970s, Gulf was effectively funding a Soviet bloc regime in Africa while the US government was attempting to overthrow that regime by supporting the UNITA rebels led by Jonas Savimbi.
In 1975, several senior Gulf executives, including chairman Bob Dorsey, were implicated in the making of illegal "political contributions" and were forced to step down from their positions. This loss of senior personnel at a critical time in Gulf's fortunes may have had a bearing on the events that followed.
Gulf's operations worldwide were struggling financially in the recession of the early 1980s, so Gulf's management devised the "Big Jobber" strategic realignment in 1981 to maintain viability. The Big Jobber strategy recognized that the day of the integrated, multi-national oil major might be over, since it involved concentrating on those parts of the supply chain where Gulf had a competitive advantage.