Shell started the 1960s by strengthening its presence in the Middle East through involvement in Oman. Ignoring early disappointments as its initial partners drifted away, it was rewarded by discovering oil in Yibal, Oman’s most prolific field. This helped bring an entirely new oil country into production. The Groningen gas field in the Netherlands was also discovered at the start of the decade, followed by the discovery of gas in the North Sea.
This was a golden period of research by Shell Chemicals. It employed a number of distinguished scientists, including Lord Rothschild and Professor Sir John Cornforth. Among many inventions and discoveries in its laboratories were epoxy resins, insecticides including Vapona fly spray, herbicides and liquid detergents.
Increasing reliance on local skills and talents
During the 1960s, Shell took the decision to internationalise the company and began to pursue a policy of placing local people in top positions in a given country. The recruitment of Asian, African and South American employees was stepped up. This diversification of staff reflected the wider political changes of the end-of-Empire era, and this far-sighted decision took Shell into the modern world.
The closure of the Suez Canal for eight years from 1967 confirmed the wisdom of the decision to invest in supertankers. The worldwide spread of its business and operating flexibility enabled Shell to survive the disruption to supplies caused by the difficulty of transporting oil from the Middle East.
Another major development in shipping was the start of the transport of liquefied natural gas (LNG) by sea. The first commercial scheme by Conch International Methane, in which Shell held a 40% interest, delivered LNG to the UK from Algeria for the first time in 1964. Further projects followed, in particular delivery from Brunei to Japan, starting in 1972.
Political situation impacts supplies
The 1960s were years of remarkable growth for the oil industry. However by the end of the decade storm clouds were gathering. In late 1969, Colonel Gaddafi took power in Libya after a coup. Libya at that time was the source of a quarter of all the crude oil consumed in Europe, but the new government cut production and increased prices. Soon every other oil-producing nation threatened to follow suit.
The Yom Kippur Arab-Israeli war of 1973 brought the crisis to a head. Within a matter of weeks, the OPEC producing countries quadrupled the price of oil from $3 per barrel to $12 per barrel and for two months imposed a supply boycott. The economic impact on the Western world was catastrophic, driving inflation to unforeseen heights and plunging trade into recession. An era of relatively cheap energy had come to an end.