A new order for the international oil industry
The immediate post-war years were some of the toughest Shell had yet faced. Reconstruction was hugely expensive, but the market for oil was changing rapidly and it needed a programme of ambitious expansion. Shell launched new exploration programmes in Africa and South America and built new refineries in the UK. Shipping became larger and better-powered so that more bulk could be carried.
In 1947, the first commercially viable offshore oil well was drilled in the Gulf of Mexico. Two years later Shell drew its own first offshore oil there and by 1955 Shell had 300 offshore wells, mostly in the Gulf. But there were also new discoveries in the Niger Delta and in Borneo. Commercial production of oil in Nigeria began in 1958.
The return of peace brought an explosion in civilian demand for oil products – in particular petrol (gasoline) in the USA, where the number of cars rose by 60% between 1945 and 1950. To end supply bottlenecks Shell formed an alliance with Middle East Gulf Oil, giving it a substantial stake in this increasingly important region.
Scientific advances increase oil demand
A number of scientific advances also boosted demand for oil. Shell contributed to the invention of the jet engine: its architect Sir Frank Whittle worked for the group for a number of years. The 1940s also saw the development of the catalytic cracker, which was cheaper and more effective than its predecessor, thermal cracking. Shell’s lubricants were also much improved. In 1950 Shell formed a partnership with Enzo Ferrari to help develop lubricants for his Formula One racing cars. The Shell-Ferrari partnership endures to this day.
In 1953, as rationing finally ended, Shell in the UK was allowed for the first time since the war to sell petrol under its own brand name. It prompted a huge advertising campaign and Shell used visiting artists to expand its famous road guides collection, all of which contributed to building the Shell brand.