Information AboutGulf Oil |
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The Gulf Oil Corporation (GOC), as such, ceased to exist in 1984 when it merged with Standard Oil of California (otherwise known as SOCAL or Chevron). However the Gulf brand name and a number of the constituent business divisions of GOC survived. Under new ownership, Gulf has experienced a revival in recent years and has emerged as a flexible network of allied businesses. The network trades worldwide using the slogan ''"YOUR LOCAL GLOBAL BRAND"''. - present]] HISTORY The business that became Gulf Oil originated in 1901 with an oil discovery in Spindletop , Texas . The organisation was founded by William Larimer Mellon of the Pennsylvania Mellon banking family through the amalgamation of a number of oil businesses, principally the J.M. Guffey Petroleum Company and the Gulf Refining Company of Texas. The Gulf Oil Corporation itself was formed in 1907. Handbook of Texas : Early history of Gulf Oil Central to its early history was the construction of the 400 mile long Glenn Pool pipeline connecting oil fields in Oklahoma with Gulf's refinery at Port Arthur, Texas. Gulf later built a network of pipelines and refineries in the Eastern and Southern United States. Gulf Oil grew over time and the business was characterised by its integrated nature. Gulf was active across the whole spectrum of the oil industry ranging through exploration, production, transport, refining, petrochemicals and petroleum marketing. It introduced many innovations including the first drive-in service station, complimentary road maps, drilling over-water at Ferry Lake and the catalytic cracking refinery. Gulf established the model for the integrated, international oil major. It had extensive exploration and production operations in the Gulf Of Mexico area and in Kuwait . Gulf Oil played a major role in the early development of oil production in Kuwait, and through the 1950s and 60s it was widely claimed that Gulf had a "special relationship" with the Kuwait government. However, any such special relationship had certainly melted away by 1980. In 1934 the Kuwait Oil Company KOC: history of Gulf involvement in KOC was formed as a joint venture by British Petroleum and Gulf. Both BP 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 out. Oil production started from Rawdhatain in 1955 and Minagish in 1959. KOC started gas production in 1964. It was the cheap oil and gas being shipped from Kuwait that formed the economic basis for Gulf’s diverse petroleum sector operations in Europe, the Mediterranean, Africa and the Indian sub-continent. These last operations were coordinated by Gulf Oil Corporation (Eastern Hemisphere) from an office at Portman Street, London. Gulf expanded on a worldwide basis from the end of the war until the late 1970s. Much of the expansion was through the acquisition of small, privately owned chains of filling stations in various countries. These allowed Gulf outlets to sell product (sometimes through 'matching' arrangements) from the oil that it was lifting in the Gulf of Mexico and Kuwait. Some of these acquisitions were to prove less than resilient in the face of economic and political developments from the 70s on. Gulf invested heavily in product technology and developed many speciality products, particularly for application in the maritime and aviation engineering sectors. It was particularly noted for its range of lubricants and greases. In 1974 the Kuwait National Assembly took a 60% stake in the equity of KOC with the remaining 40% being 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 GOC(EH) then had to start supplying its downstream operations in Europe with crude bought on the world market at commercial prices. The whole GOC(EH) 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. Gulf was at the forefront of various projects in the early 70s intended to adjust the world oil industry to closure of the Suez canal after the six day war of 1967. In particular, Gulf undertook the development of a deep water terminal at Bantry Bay in Ireland capable of handling Ultra Large Crude Carrier ( ULCC ) vessels serving the European market. It 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 (eg those at Europoort and Marchwood) 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 Petrofina tanker (the Betelguese) 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. Byrne O Cleiregh consultants report: report on Whiddy Island oil terminal 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. Gulf operations worldwide were struggling financially in the recession of the early 1980s and Gulf management devised the "Big Jobber" strategic realignment in 1981 along with a programme of selective divestments in order to maintain viability. But, this may have been a case of too little, too late. DEMISE By 1980, Gulf exhibited many of the characteristics of a giant corporation that had lost its way. It had a huge but poorly performing asset portfolio, associated with a depressed share price. The stock market value of Gulf started to drop below the break-up value of its assets. Such a situation was bound to attract trouble, sooner or later. Its undoing as an independent company began in 1982 when T. Boone Pickens Famous Texans: outline history of Pickens and Mesa , an Amarillo, Texas oilman and Corporate Raid er (or Greenmail er), and owner of Mesa Petroleum made an offer for the much larger Cities Service Company from Tulsa, Oklahoma . Gulf offered to be a White Knight and take over Cities Service (more generally known by the name Citgo ) to keep them out of the clutches of Mesa. Gulf terminated the Cities Service acquistion over a dispute regarding accuracy of Cities Service's reserves and Cities Service was ultimately sold to Occidental Petroleum , and the retail operations were resold to Southland Corporation , the operators of 7-Eleven stores. Gulf's termination of the Cities Service acquistion resulted in more than 15 years of shareholder litigation against Gulf. Mesa and a group of associated investors then turned on Gulf. They quickly acquired 11% of the company's stock and engaged in a proxy war to get control of its board. Pickens made loud criticisms of the existing Gulf management and offered an alternative business plan intended to release shareholder value - although how serious this alternative plan was is open to debate. Gulf management and directors took the view that the Mesa bid represented an undervaluation of the Gulf business as a going concern and that it was not in the interest of Gulf shareholders. Gulf therefore sought to resist Pickens by various means, finally turning to Standard Oil of California (better known as Chevron ) to act as their White Knight in 1984 . Gulf divested many of its worldwide operating subsidiaries then merged with Chevron. The Mesa group of investors were reported to have made a $760m profit when they assigned their Gulf shares to Chevron. The forced merger of Gulf and Chevron was a controversy that reached all the way to the U.S. Congress and business talk shows. Never before had a "small operator" successfully taken apart a Fortune 500 company. The merger with Chevron would become the largest corporate merger in world history up to that time. Chevron, to settle with the government antitrust requirements, sold some Gulf stations, a refinery in the eastern United States and some international operations variously to British Petroleum (BP) and Cumberland Farms in 1985 . AFTERMATH AND REVIVAL Confusion arose as BP, Chevron, Cumberland Farms and some other companies that acquired former Gulf operations continued to use the Gulf name through the early , has bought a license for North American rights to the Gulf brand from Chevron. Chevron still owns the Gulf brand. GOLP operates a distribution network reaching from Maine to Ohio. Most Gulf-branded filling stations in North America are owned by Cumberland Farms of Canton, Massachusetts , which owns a two-thirds interest in GOLP. Some Gulf branded stations in North America are independently-owned Franchise s. Gulf Oil International ('GOI') is a surviving business division of the old Gulf Oil Corporation and is based in Pittsburgh. It is owned by Chevron but functions as an independent business. GOI trades mainly in lubricants, oils and greases. GOI is also involved in franchising the Gulf brand to operators in the petroleum and automotive sectors outside North America. The Canadian exploration and production arm of Gulf Oil continued as an independent oil company (Gulf Canada Resources) until its acquisition by Conoco in 2002. Most Gulf downstream operations in Europe were sold to the Kuwait Petroleum Company in early 1983. The associated Gulf filling stations were converted to trade under the Q8 brand name by 1988. However, Gulf Oil (Great Britain) was merged into Chevron and its stations continued to use the Gulf brand name and insignia until 1997 when the network was sold to Shell , although by this stage a fairly large proportion of Gulf stations were supplied by jobbers rather than Gulf Oil (GB). Several other Gulf subsidiaries were sold to local owners (eg Gulf Oil India to a partnership including GOI, Ashok Leyland and the Hinduja group) where the current owners continue to use the Gulf name and insignia. GOI has now licensed the Gulf brand and logo in the UK to the Bayford group, one of the largest independent fuel distributors, so a new Gulf network of independent stations is slowly reappearing across the UK.Bayford Gulf website : Gulf filling stations in the UK At present many of these stations are notable for offering genuine leaded 4 star petrol, which Bayford has a special dispensation to sell. GOI continues to sell Gulf branded lubricants worldwide GOI website: full details of GOI operations through a network of country subsidiary companies. Some of these subsidiaries franchise use of the Gulf brand to local independent petroleum retailers. Hence, Gulf branded products and filling stations can be found in many countries. The Gulf brand is making a comeback in the USA. GOLP has been expanding use of the Gulf brand in the Northeast, and it has become conspicuous at major sporting events in the area with ads for Gulf in New York City , Boston , Philadelphia , and Pittsburgh . To take one case as an illustrative example of the Gulf revival - after Texaco 's 2001 merger with Chevron, many former Texaco stations in Pittsburgh switched to Gulf since Chevron does not service Pittsburgh. As a result, the Texaco brand name has all but disappeared from the area. One of the other stakeholders in the Texaco brand, Shell , already had an agreement with a multiple-station owner in the area and was therefore unable to fill the gap. The Gulf logo shown at the head of this page is still used all around the world by a large number of business interests. It is a widely recognised brand and many independent operators are willing to pay for the franchise to use it. Although GOLP and GOI are principal stakeholders in the Gulf brand, others do have rights to use it. Attempts have been made to coordinate the marketing strategies of those with an interest in the Gulf brand, but this has not produced a result to date. During the period 1980 to 2000, Gulf moved from being a monolithic, integrated multinational corporation to being more of a network of allied business interests. This has given the whole Gulf business a high degree of strategic and operational flexibility. CASE STUDIES IN CURRENT USE OF THE GULF BRAND Independent filling stations in the UK In 1970 there were nearly 25,000 filling stations in the UK, of which around 10,000 were 'independents' (typically, privately owned stations supplied by a major or jobber while using a brand under licence). By end 1999 the number of filling stations had dropped to 13,700 and this figure dropped further to 9,700 at end 2005. Guardian report on Energy Institute annual market survey In recent years, filling stations have been closing at a rate of around 50 per month. Many of the smaller and independent stations have succumbed to competition from out of town supermarkets which are able to undercut local opposition through sheer volume of sales and shared overheads. Energy Institute : press release on 2004 marketing survey The Gulf brand in the UK is franchised by GOI to the Bayford group, which specialises in operating service stations on minor trunk roads in rural areas. Bayford currently supplies about 150 Gulf branded filling stations in the UK, all of which are independently owned. The illustration shows a typical Bayford/Gulf service station in the UK. Note that it is associated with garage, restaurant and retailing facilities. It is in an isolated location, being 5 miles south of Wooler in the Cheviot Hills. It caters to both local residents and tourist traffic. It is not vulnerable to competition from supermarkets and provides something of a local community centre. Pennsylvania Turnpike For decades, Gulf operated service stations on the Pennsylvania Turnpike alongside the Howard Johnson's restaurants at the Turnpike's Travel Plaza s, which were designed for motorists to be able to get food and gasoline without paying an extra toll to get off of the Turnpike. This began in 1950 with the opening of the Philadelphia Extension, and Gulf would add more when other extensions opened. Previously, the Standard Oil Company of Pennsylvania (now part of Exxon ) had exclusive rights and would continue to service the travel plaza's on the original Irwin -to- Carlisle section of the Turnpike. It's still unknown why the Turnpike had deals with two separate oil companies at that time, and this would contine for decades. Things got even more confusing during the 1980's, when Sunoco was added at the Hempfield and Siedling Hill travel plaza's. This would eventually lead to a three-way bidding war between three of Pennsylvania 's most recognizable gasoline brands. The aftermath of what happened to Gulf Oil also cost what would have been a lucrative deal for the remaining Gulf stations to become the exclusive gasoline provider at the service plaza's along the Pennsylvania Turnpike. After Exxon pulled out in 1990 , GOLP had the chance to secure exclusive rights, but the aftermath of what happened to the former Gulf Oil was likely why the Pennsylvania Turnpike Commission ultimately chose Sunoco. By 1993 , the remaining Gulf stations on the Turnpike (as with the Exxon ones before it) had converted to Sunoco. GULF PRODUCTS Most popular Gulf products included subregular Gulftane, Good Gulf regular, Gulf No-Nox premium, and Gulf Super Unleaded (The Gas With GUTS) gasolines; Gulfpride motor oil and Gulflex lubrication. Gulf also sold its own brand of tires, batteries and accessories through its stations. For many years, Gulf stations were typically painted blue and white but added orange roof overhangs in the early 1960s. GOI still produces and sells a wide range of oil based products including lubricants and greases of all kinds. GOI product catalogue Gulf products EXTERNAL LINKS
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