oil company

Shell Oil Company

Shell Oil Company is the United States-based affiliate of Royal Dutch Shell, a multinational oil company ("oil major") of Anglo Dutch origins, which is amongst the largest oil companies in the world. Approximately 22,000 Shell employees are based in the U.S. The head office in the U.S. is in Houston, Texas. Shell Oil Company, including its consolidated companies and its share in equity companies, is one of America’s largest oil and natural gas producers, natural gas marketers, gasoline marketers and petrochemical manufacturers.

Business areas

Shell is the market leader through approximately 25,000 Shell-branded gas stations in the US which also serve as Shell's most visible public presence. Shell Oil Company is a 50/50 partner with the Saudi Arabian government-owned oil company Saudi Aramco in Motiva Enterprises, a refining and marketing joint venture which owns and operates three oil refineries on the Gulf Coast of the United States. It also holds 80% of an exploration firm called Pecten that explores and drills in various offshore locations including the oil basin near Douala, Cameroon in cooperation with the French government-owned Elf Aquitaine (now Total).

Shell products include oils, fuels, and card services as well as exploration, production, and refining of petroleum products. The Shell Oil Refinery in Martinez, California, the first Shell refinery in the United States, supplies Shell and Texaco stations in the West and Midwest. Shell gasolines used to include the RU2000 and SU2000 lines (later there was a SU2000E) but they have been superseded by the V-Power line.

Shell has an agreement with Chevron to supply each other with the base stock of gasoline (refined gasoline before additives such as V-Power or Techron is added) in certain areas where one company has refinery capacity and the other does not.

Relationship with Royal Dutch Shell

Until the mid 1980s Shell’s business in the United States was substantially independent with its stock (“Shell Oil”) being traded on the NYSE and with little direct involvement from the Group’s central offices in London and The Hague, in the running of the American business. In 1984, Shell made a bid to purchase those shares of Shell Oil Company it did not own (around 30%) and despite some opposition from some minority shareholders which led to a court case, Shell succeeded in the buy-out for a sum of $5.7 billion.

Despite the acquisition, however, Shell Oil remained a very independent business. This was partly for complex legal reasons as RoyalDutch/Shell feared that there could be onerous liability problems if a closer control of Shell Oil's affairs was taken by the "parent companies". One of the stranger consequences of this independence was that the Shell logo used in the US was slightly different from that used in the rest of the world. In the 1990s Shell Oil's independence began gradually to be eroded as the "parent companies" took a more hands-on approach in the running of the business. The logo now used in the United States is the same as that used elsewhere.


Environmental record

The U.S. Environmental Protection Agency issued a Notice of Violation to Shell Oil Company for its infringements of the Clean Air Act at a bulk petroleum terminal the company owned in Bridgeport, Conn., until Oct. 1, 1998. According to the report, Shell loaded a total of 28.4 million gallons of gasoline onto barges without required vapor recovery equipment on seven days in 1997. The result is 56 tons of uncontrolled volatile organic compound emissions to the atmosphere in an area of New England. During the investigation in May, 1999 EPA also found that Shell built an additional loading bay in 1995 without permit of the state Department of Environmental Protection. Bridgeport’s facility itself has been recorded to produce average of about 170 tons of volatile organic compounds per year. However, this modification has the potential of production 30 tons per year more of the pollution emissions.

In 2008, a new lawsuit was opened against Shell Oil Company in Houston, Texas for alleged Clean Air Act violation. Shell’s Deer Park facility is the nation’s eighth-largest oil refinery and one of the world’s largest producers of petrochemicals. The facility is also the second largest source of air pollution in Harris County, which ranks among the worst in the nation in several measures of air quality. According to the environmental groups’ analysis of Shell’s own reports to the Texas Commission on Environmental Quality, air pollutants released at Deer Park since 2003 include:

  • Over 2 million pounds of sulfur dioxide;
  • Over 1 million pounds of volatile organic compounds (VOCs);
  • Over 600,000 pounds of carbon monoxide;
  • Over 250,000 pounds of nitrogen oxides;
  • Over 90,000 pounds of benzene and 60,000 pounds of 1,3-butadiene.

The lawsuit seeks a court order requiring Shell to end its Clean Air Act violations and pay additional penalties of up to $32,500 per day for each violation of the Clean Air Act.

Shell has recently implemented efforts to reduce the impact of its operations on the millions of migratory birds that encounter the North Sea drilling operations.

Unsuccessful zone-pricing lawsuit

Mehdi Shahbazi was a Shell station operator in central California who posted signs in 2005 stating "Big oil's unearned profit." in protest of zone pricing. Shell sued Shahbazi saying that the protest violated the terms of his lease. Shahbazi responded by accusing the company of "breach of contract and of violating the Petroleum Marketing Practices Act." Shell then terminated his contract. A federal judge ruled in favor of Shell and Shahbazi was ordered to vacate the station.

Shahbazi died on November 14, 2007 due to liver failure which was a result of a hunger strike.

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