Growth through acquisition

In the 1980s, Shell grew through acquisition. It bought out the remaining 30% shareholding in Shell Oil in 1985 to consolidate its American operations. This was a period of consolidation across the industry through mergers and acquisitions, a necessary move in the face of difficult trading conditions. Shell also sold down its stockpile, anticipating, to some extent, the coming weakness in the oil price.

Plummeting oil prices

In 1986 the oil price collapsed. OPEC lost power in the market place as other non-OPEC sources came on-stream, including output from the North Sea. It had initially tried to ignore price pressures through cutting production but it abandoned this strategy in late 1985 and decided to increase production. The price fell over the winter from $31 per barrel to $10.

After years of living with a high oil price the Shell group had to adjust to low prices, requiring a change in the way it judged investment projects. The budget was halved within two years: the company had to work much harder to develop new projects more cheaply. Intensive research led to huge improvements in drilling techniques such as slim-hole drilling and directional drilling. The use of 3D seismic technology in the search for new oil resources became widespread.

Offshore exploration projects were located in more challenging locations, including the Troll field in the Norwegian sector of the North Sea
Towing the Troll production platform to its site location 80 kilometres north-west of Bergen, Norway, in May 1995

Global markets and new technologies

In the 1980s Shell began to develop offshore exploration projects  in much more challenging conditions than had previously been attempted. The Troll field in Norway was one example; another was in the Gulf of Mexico where a new well was drilled at a depth of 2.3 kilometres.

In 1989, the Communist regimes of Eastern Europe collapsed, reopening these markets for Shell for the first time since World War 2. The group began to accumulate assets steadily: the first was a joint venture in auto retailing in Hungary, which rapidly grew to 50 outlets. But the more strategic ventures were in Russia. They offered opportunities for joint production agreements as well as marketing.

Biomass fuels and gas-to-liquids (GTL) products made giant leaps forward in the 1990s. The basic technology of the gas-to-liquids process had been established for several decades but the cheap, plentiful supplies of crude oil meant there had been little interest in developing GTL commercially. The opening of Shell’s Bintulu GTL plant in Malaysia in 1993 was a pioneering step, a precursor to the importance that gas-to-liquids was to play in the group in the following decade.

Public scrutiny

The Brent Spar episode in 1995 centred on Shell’s plans to dispose of a North Sea storage platform. Public opinion had become much more sensitive to environmental issues. In the following decade, the group worked much harder to open a dialogue with interested parties regarding its environmental impact and to develop good relations with the communities affected by its work.

Another problem to hit Shell the Group arose from its presence in the Nigerian region of Ogoniland. The tribal minority in the Ogoni were aggrieved with the Nigerian government because they felt they were denied a proper share of federal revenues from the oil, and what they saw as other fundamental human rights. Their champion was the writer Ken Saro-Wiwa. The oil companies were targeted as collaborators with a corrupt government and Shell was accused of environmental despoliation. The story achieved international notoriety when Saro-Wiwa and eight of his colleagues were sentenced to death for their activities.

Shell has since strived to work as closely as possible with both local governments and communities. The Shell commitment and policy on Health, Security, Safety, Environment and Social Performance (HSSE & SP) applies across the company and is designed to help protect people, their communities and the environment wherever Shell operates.

Shell headquarters, The Hague
Shell headquarters in The Hague, the Netherlands

Meeting increasing energy demand

At the turn of the century Shell began to move into new growth areas of the world, notably in China and Russia. Shell had several oil and gas projects in development in Russia, including Sakhalin, and built a massive petrochemical plant in China to supply the country’s rapidly-growing consumer market.

Oil exploration projects have become more complex as Shell has found itself working in increasingly hostile environments. Shell’s record of technological innovation has been critical to its ability to partner national governments keen to exploit natural resources.

The birth of Royal Dutch Shell plc

In 2005, the RDS group underwent a major structural reorganisation as the nearly century-old partnership between Royal Dutch Petroleum and Shell Transport and Trading was dissolved and Shell unified its corporate structure under a single new holding company, Royal Dutch Shell plc. The headquarters of the new company are in The Hague. July 5, 2007 marked the first centenary of the original partnership.

Record-breaking innovations and new partnerships

In 2012, Shell completed a major gas-to-liquids project, Pearl GTL, in Qatar. As the world’s largest source of GTL products, Pearl was Shell’s biggest engineering project, taking five years to build. But Shell’s innovations didn’t stop there. In 2016, production started at Shell’s Stones field, the world’s deepest oil and gas project. In 2017, Prelude, the world’s biggest floating liquefied natural gas facility, sailed 5,800 kilometres from a shipyard in South Korea to its new home in Western Australia.

In 2015 Shell announced that it would be buying BG Group, a UK oil and gas production company. The acquisition was completed in February 2016, expanding the company’s oil and gas portfolio. In 2016 Shell created its New Energies business to focus on exploring and developing commercial opportunities in renewable energy, such as wind and solar.

The century ahead

Looking back over 185 years of Shell history, it has been an amazing journey. Mankind has managed to adapt, time and time again, through a century of rapid change and periodic upheaval; and so has Shell. There are big challenges in the century ahead.

Society today faces a challenge on an unprecedented scale: how to meet increasing energy needs while reducing carbon emissions.

Shell is an active player in and has embraced the transformation of the energy system. The company sees commercial opportunity in participating in the global drive to provide more and cleaner energy solutions. Thriving as the world transitions to a lower-carbon energy system is a key focus and Shell’s strategy, portfolio and strong financial framework will give the company a source of resilience in the years to come.

Understanding what climate change means for Shell is one of the biggest strategic questions facing company leaders. In answering that question, Shell is determined to continue to work closely with society and its customers as it has done for nearly 200 years.

The first consignment of liquefied natural gas was shipped in 1964 from Algeria in the SS Methane Princess.

1960s to the 1980s

Shell continues to extend exploration overseas and adopts a policy of diversification. North sea gas fields are discovered.

Innovation and diversification

Our beginnings

How we grew from the Samuel family shop selling sea shells in 1833 into one of the world’s leading energy companies.

The early 20th century

Shell becomes the world's leading oil company and founds Shell Chemicals to advance its refining business.

Post-war expansion

Oil demand soars and Shell expands dynamically. The super-tanker is born, Shell extends its exploration overseas and forms a partnership with Ferrari.

1960s to the 1980s

Shell Chemicals enters a golden period of research; Shell produces its General Business Principles and diversifies its operations.

More in about us

The Shell brand

The Shell brand promotes our values and the quality of our products and services all over the world.