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Gulf Oil



 
 
Gulf Oil was a major global oil
Petroleum

Petroleum or crude oil is a naturally occurring, flammable liquid found in rock formations in the Earth consisting of a complex mixture of hydrocarbons of various molecular weights, plus other organic compounds....
 company
Corporation

A corporation is a legal entity separate from the persons that form it. It is a legal entity owned by individual stockholders. In British tradition it is the term designating a body corporate, where it can be either a corporation sole or a corporation aggregate ....
 from the 1900s to the 1980s. The eighth-largest American manufacturing company in 1941 and the ninth-largest in 1979, Gulf Oil was one of the so-called Seven Sisters
Seven Sisters (oil companies)

The Seven Sisters of the petroleum industry is a term coined by an Italian entrepreneur, Enrico Mattei, that refers to seven oil companies that dominated mid 20th century oil production, refining, and distribution....
 oil companies. Gulf was one of the chief instruments of the legendary Mellon
Mellon Financial

Mellon Financial Corporation, was one of the world's largest money management firms. Based in Pittsburgh, Pennsylvania, it was in the business of institutional and high-net-worth-individual asset management, including the Dreyfus family of mutual funds; business banking; and shareholder and investor services....
 fortune. Both Gulf and Mellon Bank had their headquarters in Pittsburgh, Pennsylvania
Pittsburgh, Pennsylvania

Pittsburgh is the second largest city in the U.S. state of Pennsylvania with a population of 312,819. The population of the seven-county metropolitan area is 2,462,571....
.

Gulf's former headquarters, originally referred to as "the Gulf Building" (now the Gulf Tower
Gulf Tower

Gulf Tower is one of the major distinctive and recognizable features of Downtown Pittsburgh, Pennsylvania, United States. The tower is named for the Gulf Oil , which was one of the leading multinational oil companies of its time, consistently ranking among the largest 10 corporations in the country....
 office condos), is an art-deco skyscraper.






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Encyclopedia


Gulf Oil was a major global oil
Petroleum

Petroleum or crude oil is a naturally occurring, flammable liquid found in rock formations in the Earth consisting of a complex mixture of hydrocarbons of various molecular weights, plus other organic compounds....
 company
Corporation

A corporation is a legal entity separate from the persons that form it. It is a legal entity owned by individual stockholders. In British tradition it is the term designating a body corporate, where it can be either a corporation sole or a corporation aggregate ....
 from the 1900s to the 1980s. The eighth-largest American manufacturing company in 1941 and the ninth-largest in 1979, Gulf Oil was one of the so-called Seven Sisters
Seven Sisters (oil companies)

The Seven Sisters of the petroleum industry is a term coined by an Italian entrepreneur, Enrico Mattei, that refers to seven oil companies that dominated mid 20th century oil production, refining, and distribution....
 oil companies. Gulf was one of the chief instruments of the legendary Mellon
Mellon Financial

Mellon Financial Corporation, was one of the world's largest money management firms. Based in Pittsburgh, Pennsylvania, it was in the business of institutional and high-net-worth-individual asset management, including the Dreyfus family of mutual funds; business banking; and shareholder and investor services....
 fortune. Both Gulf and Mellon Bank had their headquarters in Pittsburgh, Pennsylvania
Pittsburgh, Pennsylvania

Pittsburgh is the second largest city in the U.S. state of Pennsylvania with a population of 312,819. The population of the seven-county metropolitan area is 2,462,571....
.

Gulf's former headquarters, originally referred to as "the Gulf Building" (now the Gulf Tower
Gulf Tower

Gulf Tower is one of the major distinctive and recognizable features of Downtown Pittsburgh, Pennsylvania, United States. The tower is named for the Gulf Oil , which was one of the leading multinational oil companies of its time, consistently ranking among the largest 10 corporations in the country....
 office condos), is an art-deco skyscraper. The tallest building in Pittsburgh until 1970, when it was eclipsed by the U.S. Steel building, it is capped by a structure several stories high. Until the late 1970s, the entire top was illuminated, changing color with changes in barometric pressure to provide a weather indicator that could be seen for many miles.

Gulf Oil Corporation (GOC) ceased to exist as an independent company in 1984, when it merged with Standard Oil of California (otherwise known as SOCAL or Chevron
Chevron Corporation

Chevron Corporation is the world's fourth largest non-government energy corporation. Headquartered in San Ramon, California, United States, and active in more than 180 countries, it is engaged in every aspect of the Petroleum and gas industry, including exploration and Petroleum#Extraction; refining, marketing and transport; chemicals m...
). However, the Gulf brand name and a number of the constituent business divisions of GOC survived. Gulf has experienced a significant revival since 1990, emerging as a flexible network of allied business interests based on partnerships, franchises and agencies. The network trades worldwide using the slogan "Your Local Global Brand."

Gulf, in its present incarnation, is a "New Economy
New Economy

The New Economy was an evolution of developed countries from an industrial/manufacturing-based wealth producing economy into a service sector asset based economy from globalization and currency manipulation by governments and their central banks....
" business. It employs very few people directly and its assets are mainly in the form of intellectual property
Intellectual property

Intellectual property are law property over creations of the mind, both artistic and commercial, and the corresponding fields of law. Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; ideas, discoveries and inventions; and words, phra...
: brand
Brand

A brand is a collection of symbols, experiences and associations connected with a product, a service, a person or any other artifact or entity....
s, product specifications and scientific expertise. The corporate vehicle at the center of the Gulf network outside North America is Gulf Oil International Ltd (GOI), a company registered in the Cayman Islands
Cayman Islands

The Cayman Islands are a British overseas territory located in the western Caribbean Sea, comprising the islands of Grand Cayman, Cayman Brac, and Little Cayman....
 since 1985. The ultimate holding company of GOI is Amas Holding SA (Luxembourg
Luxembourg

Luxembourg , officially the Grand Duchy of Luxembourg , is a small landlocked country in western Europe, bordered by Belgium, France, and Germany....
), an investment trust
Investment trust

Investment trusts are companies that invest in the share of other companies for the purpose of acting as a collective investment.Investors' money is pooled together from the sale of a fixed number of shares a trust issues when it launches....
. Gulf's research and product development base is in Mumbai
Mumbai

Mumbai— formerly Bombay, is the capital of the Indian state of Maharashtra. The city proper has approximately 14 million people and, along with the neighbouring suburbs of Navi Mumbai and Thane, Mumbai forms the World's largest urban agglomerations according to the United Nations World Urbanization Prospects report with around 19...
, India. Its business development function is run from London
London

London is the capital of both England and the United Kingdom, and the most populous municipality in the European Union. An important settlement for two millennia, History of London goes back to its founding by the Roman Empire....
, United Kingdom. The company's focus is primarily in the provision of downstream products and services to a mass market through joint ventures, strategic alliances, licensing agreements, and distribution arrangements.

History


1901 to 1982


The business that became Gulf Oil started in 1901 with the discovery of oil at Spindletop
Spindletop

Spindletop is a salt dome oil field located in south Beaumont, Texas, Texas in the United States. On January 10, 1901, a well at Spindletop struck oil ....
, Texas
Texas

Texas is a U.S. state located in the South Central United States, nicknamed the Lone Star State. Texas is the second largest U.S. state in both area and population, spanning , and with a growing population of 24.3 million residents....
. In case analysis, a lot can be learned from this company. Often time, Ingram can make accuasation about a paper that are incorrect and obscure. GulF OIl CaN 418.A group of investors came together to promote the development of a modern refinery at nearby Port Arthur
Port Arthur, Texas

Port Arthur is a city in Jefferson County, Texas within the Beaumont, Texas–Port Arthur Beaumont?Port Arthur metropolitan area of the U.S....
 to process the oil. The largest investor was William Larimer Mellon
William Larimer Mellon

William Larimer Mellon, Sr. , sometimes referred to as W. L., was a founder of Gulf Oil....
 of the Pittsburgh Mellon banking family, other investors included many of Mellon's Pennsylvania clients as well as some Texas wildcatters. Mellon Bank and Gulf Oil remained closely associated thereafter. The Gulf Oil Corporation itself was formed in 1907 through the amalgamation of a number of oil businesses, principally the J.M. Guffey Petroleum and Gulf Refining companies of Texas.

Output from Spindletop peaked at around just after it was discovered and then started to decline. Later discoveries made 1927 the peak year of Spindletop production, but Spindletop's early decline forced Gulf to seek alternative sources of supply to sustain its substantial investment in refining capacity. This was achieved by constructing the 400-mile (640-km) Glenn Pool pipeline connecting oilfields in Oklahoma with Gulf's refinery at Port Arthur. The pipeline opened in September 1907. Gulf later built a network of pipelines and refineries in the eastern and southern United States, requiring heavy capital investment. Thus, Gulf Oil provided Mellon Bank with a secure vehicle for investing in the oil sector.

Gulf promoted the concept of branded product sales by selling gasoline in containers and from pumps marked with a distinctive orange disc logo. A customer buying Gulf-branded gasoline could be assured of its quality and consistent standard. (In the early 20th century, nonbranded gasoline in the U.S. was often contaminated or of unreliable quality).

Gulflogo1920
Gulf Oil grew steadily in the inter-war years, with its activities mainly confined to the U.S. The company was characterised by its vertically integrated business activities, and was active across the whole spectrum of the oil industry: exploration, production, transport, refining and marketing. It also involved itself in associated industries such as petrochemicals and automobile component manufacturing. It introduced significant commercial and technical innovations, including the first drive-in service station (1911), complimentary road maps, drilling over water at Ferry Lake
Caddo Lake

Caddo Lake is a 25,400 acre lake and wetland located on the border between Texas and Louisiana, in northern Harrison County, Texas and southern Marion County, Texas in Texas and western Caddo Parish, Louisiana in Louisiana....
, and the catalytic cracking refining process (Gulf installed the world's first commercial catalytic cracking unit at its Port Arthur, Texas
Port Arthur, Texas

Port Arthur is a city in Jefferson County, Texas within the Beaumont, Texas–Port Arthur Beaumont?Port Arthur metropolitan area of the U.S....
, refinery complex in 1951). Gulf also established the model for the integrated, international "oil major," which refers to one of a group of very large companies that assumed influential and sensitive positions in the countries in which they operated.

Gulf had extensive exploration and production operations in the Gulf of Mexico
Gulf of Mexico

The Gulf of Mexico is the ninth largest body of water in the world. Considered a smaller part of the Atlantic Ocean, it is an oceanic basin largely surrounded by the North American continent and the island of Cuba....
 area and in Kuwait
Kuwait

The State of Kuwait is a sovereign Arab emirate on the coast of the Persian Gulf, enclosed by Saudi Arabia to the south and Iraq to the north and west....
. The company played a major role in the early development of oil production in Kuwait, and through the 1950s and '60s apparently enjoyed a "special relationship" with the Kuwaiti government. This special relationship attracted unfavourable attention since it was associated with "political contributions" (see below) and support for anti-democratic politics, as evidenced by papers taken from the body of a Gulf executive killed in the crash of a TWA aircraft at Cairo in 1950.

In 1934, the Kuwait Oil Company was formed as a joint venture by British Petroleum (BP) 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. 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 subcontinent. These last operations were coordinated by Gulf Oil Corporation, Eastern Hemisphere (EH) from an office at Portman Street, London.

Gulf expanded on a worldwide basis from the end of the war until the mid-1970s. Much of the expansion was through the acquisition of privately-owned chains of filling stations in various countries, allowing 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 1970s 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.

Gulf Oil reached the peak of its development in around 1970. In that year, the company processed of crude daily, held assets worth $6.5 billion, employed 58,000 employees worldwide, and was owned by 163,000 shareholders. In addition to its petroleum marketing interests, Gulf was a major producer of petrochemicals, plastics, and agricultural chemicals. Through its subsidiary, Gulf General Atomic Inc., it was also active in the nuclear energy sector. Gulf abandoned its involvement in the nuclear sector after a failed deal to build atomic power plants in Romania in the mid-1970s.

In 1974, the Kuwait National Assembly took a 60 percent stake in the equity of KOC with the remaining 40 percent 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 Gulf (EH) 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 late 1960s intended to adjust the world oil industry to developments of the time including closure of the Suez canal after the 1967 war. In particular, Gulf undertook the construction of deep water terminals at Bantry Bay
Bantry Bay

Bantry Bay is a bay located in County Cork, southwest Ireland. The bay runs approximately 35 km from northeast to southwest into the Atlantic Ocean....
 in Ireland and Okinawa in Japan capable of handling Ultra Large Crude Carrier (ULCC) vessels serving the European and Asian markets respectively. In 1968, the Universe Ireland was added to Gulf's tanker fleet. At , this was the largest vessel in the world and incapable of berthing at most normal ports.

Gulf also participated in a partnership with other majors, including Texaco
Texaco

Texaco is the name of an United States petroleum retail brand. Its flagship product is its fuel,"Texaco with Techron". It also owns the Havoline motor oil brand....
, 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 (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 Total tanker, the Betelgeuse, in January 1979 (the Betelgeuse incident) and it was never fully reopened. The Irish government took over ownership of the terminal in 1986 and held its strategic oil reserve there.

In the 1970s, Gulf participated in the development of new oilfields in the UK North Sea and in Cabinda
Cabinda (province)

Cabinda is an exclave and province of Angola, a status that has been disputed by many political organizations in the territory. The capital city is also called 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. The Angolan connection was another "special relationship" that attracted comment. In the late 1970s, Gulf was effectively funding a Soviet bloc regime in Africa while the US government was attempting to overthrow that regime by supporting the UNITA
UNITA

The National Union for the Total Independence of Angola is the second-largest political party in Angola. Founded in 1966, UNITA fought with the Popular Movement for the Liberation of Angola in the Angolan War for Independence and then against the MPLA in the ensuing Angolan Civil War ....
 rebels led by Jonas Savimbi
Jonas Savimbi

Jonas Malheiro Savimbi led UNITA, an Anti-communism rebel group that fought against the Popular Movement for the Liberation of Angola in the Angolan Civil War until his death in a clash with Government troops in 2002....
.

In 1975, several senior Gulf executives, including Chairman Bob Dorsey, were implicated in the making of illegal "political contributions" and were forced to step down from their positions. This loss of senior personnel at a critical time in Gulf's fortunes may have had a bearing on the events that followed.

Gulf's operations worldwide were struggling financially in the recession of the early 1980s, so Gulf's management devised the "Big Jobber
Jobber (fuel)

A jobber is a person or company that purchases quantities of refined fuel from refining companies , either for sale to retailers , or to sell directly to the users of those products ....
" strategic realignment in 1981 (along with a program of selective divestments) to maintain viability. The Big Jobber strategy recognized that the day of the integrated, multi-national oil major might be over, since it involved concentrating on those parts of the supply chain where Gulf had a competitive advantage.

Marketing and promotions


Gulf Oil was the primary sponsor for NBC News
NBC News

NBC News is the news division of United States television network NBC, a part of NBC Universal, which is majority-owned by General Electric. Its current president is Steve Capus....
 special events coverage in the 1960s, notably for coverage of the U.S. space program. The company used the connection to its advantage by offering giveaway or promotional items at its stations, including sticker sheets of space mission logos, a paper punch-out lunar module model kit, and a book titled "We Came In Peace," containing pictures of the Apollo 11
Apollo 11

The Apollo 11 mission was the first manned mission to land on the Moon. It was the fifth human spaceflight of Apollo program and the third human voyage to the Moon....
 moon landing.

One particularly memorable Gulf advertisement carried by NBC during their coverage of the Apollo missions showed aerial and onboard views of the Universe Ireland with Tommy Makem
Tommy Makem

Thomas 'Tommy' Makem was an internationally celebrated Ireland folk music musician, artist, poet and storyteller, best known as a member of The Clancy Brothers and Tommy Makem....
 and the Clancy Brothers singing "Bringin' Home the Oil"
Bringin' Home the Oil

Bringin' Home the Oil is an Folk music of Ireland-themed sea shanty written in 1969 by Tommy Makem and the Clancy Brothers as the theme for a two-minute long television commercial for Gulf Oil as part of their sponsorship of NBC News coverage of the US space program and the national political conventions in celebration of Gulf Oil's then-new...
 - a tribute to the opening of Gulf's operations in Bantry Bay
Betelgeuse incident

The Betelgeuse incident, also known as the Betelgeuse or Whiddy Island disaster, occurred on 8 January 1979, at around 1:00 a.m., when the oil tanker Betelgeuse exploded in West Cork, Republic of Ireland, at the offshore jetty of the Whiddy Island Oil Terminal, due to the failure of the ship's structure during an operation...
.

Gulf Oil was most synonymous for its association with auto racing
Auto racing

Auto racing is a motorsport involving racing cars. It is one of the world's most watched television sports....
, as it famously sponsored the John Wyer Automotive team in the 1960s and early '70s. The signature light blue and orange color scheme associated with its Ford GT40
Ford GT40

The Ford GT40 was a high performance sports car and winner of the 24 hours of Le Mans four times in a row, from 1966 to 1969 . It was built to win long-distance sports car racing against Scuderia Ferrari ....
 and Porsche 917
Porsche 917

The Porsche 917 is a racecar that gave Porsche its first overall wins at the 24 Hours of Le Mans in 1970 24 Hours of Le Mans and 1971 24 Hours of Le Mans....
 is one of the most famous corporate racing colors
List of international auto racing colors

From the beginning of the 20th century until the late 1960s, before Formula One sponsorship liveries came in use, vehicles competing in Formula One, sports car racing, touring car racing and other international auto racing competitions customarily painted their cars in racing colours reflecting the nation of origin of the car or driver....
 and has been replicated by other racing teams sponsored by Gulf. Much of its popularity is attributed to the fact that in the 1971 film Le Mans
Le Mans (film)

Le Mans is a 1971 action film directed by Lee H. Katzin. Starring Steve McQueen, it features footage from the actual 1970 24 Hours of Le Mans auto racing....
, Steve McQueen's character, Michael Delaney, drives for the Gulf team. As a result of McQueen's increasing popularity following his death and the increasing popularity of the Heuer Monaco which he wore at the film, TAG Heuer
TAG Heuer

TAG Heuer is a Swiss watchmaker known for its luxury sports watches and chronographs. It is a division of luxury goods company LVMH. The company motto is "Swiss Avant-Garde Since 1860"....
 released a limited edition of the watch with the Gulf logo and trademark color scheme. In the same era, Gulf Oil also sponsored Team McLaren during the Bruce McLaren
Bruce McLaren

Bruce Leslie McLaren , born in Auckland, New Zealand, New Zealand, was a race-car designer, driver, engineer and inventor.His name lives on in McLaren which has been one of the most successful in Formula One championship history, with McLaren cars and drivers winning a total of 20 world championships....
 days, which used a papaya orange color scheme with Gulf blue for lettering.

From 1963 to 1980, Gulf Oil had a formal agreement with Holiday Inn
Holiday Inn

Holiday Inn is a brand name applied to hotels within the InterContinental Hotels Group ....
, the world's largest lodging chain, for which Holiday Inns in the U.S. and Canada would accept Gulf credit cards for food and lodging. In return, Gulf placed service stations on the premises of many Holiday Inn properties along major U.S. highways to provide one-stop availability for gasoline, auto service, food and lodging. Many older Holiday Inns still have those original Gulf stations on their properties, some in operation and some closed, but few operate today as Gulf stations.

Gulf No-Nox gasoline was promoted with a bucking horse leaving an imprint of two horseshoes. Several promotions centered around the two horseshoes. In 1966 bright orange 3-D plastic self-adhesive horseshoes for your bumper were given away. Another popular giveaway was during the 1968 election season, gold horseshoe lapel pins featuring either a democrat donkey or a republican elephant.

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 the interest of corporate raid
Corporate raid

A corporate raid is a business term for buying a large interest in a corporation and then using voting rights to enact measures directed at increasing the share value....
ers.

Its undoing as an independent company began in 1982 when T. Boone Pickens, an Amarillo, Texas
Amarillo, Texas

Amarillo is the 14th-largest city in the U.S. state of Texas, the largest in the Texas Panhandle, and the county seat of Potter County, Texas. A portion of the city extends into Randall County, Texas....
 oilman and corporate raid
Corporate raid

A corporate raid is a business term for buying a large interest in a corporation and then using voting rights to enact measures directed at increasing the share value....
er (or greenmail
Greenmail

Greenmail is money paid by a company to acquire its own shares of stock from a shareholder who is threatening to take control of, or unwanted influence over, the company....
er), and owner of Mesa Petroleum made an offer for the much larger Cities Service Company
Citgo

Citgo Petroleum Corporation is a United States-incorporated, Venezuela-owned refiner and marketer of gasoline, lubricants, petrochemicals, and other petroleum products....
 (more generally known by the name Citgo
Citgo

Citgo Petroleum Corporation is a United States-incorporated, Venezuela-owned refiner and marketer of gasoline, lubricants, petrochemicals, and other petroleum products....
) from Tulsa, Oklahoma
Tulsa, Oklahoma

Tulsa is the second-largest city in the state of Oklahoma and List of United States cities by population in the United States. With an estimated population of 384,037 in 2007, it is the principal municipality of the Tulsa Metropolitan Statistical Area, a region of 905,755 residents projected to reach one million between 2010 and 2012....
 which was then trading in the low 20s. Pickens first privately offered $45 a share for a friendly takeover and then later made a $50 a share public offer when Cities' CEO rejected the friendly offer. Gulf forestalled Mesa's takeover attempt by offering $63 a share in a friendly offer which Cities (by then trading at $37) accepted. Cities then bought out Pickens for $55 a share. Once Pickens was gone Gulf reneged on its buyout offer supposedly over a dispute regarding accuracy of Cities Services' reserves and the stock price of Cities plunged triggering stockholder lawsuits. Cities Services was ultimately sold to Occidental Petroleum
Occidental Petroleum

Occidental Petroleum Corporation is an international oil and gas exploration and production company with operations in the United States, the Middle East, North Africa, and South America....
, and the retail operations were resold to Southland Corporation
7-Eleven

7-Eleven is a worldwide chain of convenience stores. It is, since March 2007, the largest chain store in any category, beating McDonald's by 1,000 stores....
, the operators of 7-Eleven
7-Eleven

7-Eleven is a worldwide chain of convenience stores. It is, since March 2007, the largest chain store in any category, beating McDonald's by 1,000 stores....
 stores. Gulf's termination of the Cities Service acquisition resulted in more than 15 years of shareholder litigation against Gulf (and later Chevron).

Mesa and a group of associated investors then turned on Gulf. They quickly acquired 11 percent 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 through a drastic slimming down of the Gulf operation. Pickens had acquired the reputation of being a corporate raider whose skill lay in making profits out of bidding for companies but without actually acquiring them. During the early 1980s alone, he made failed bids for Cities Services, General American Oil, Gulf, Phillips Petroleum
Phillips Petroleum

Phillips Petroleum Company was founded in 1917 by L.E. Phillips and Frank Phillips, of Bartlesville, Oklahoma, Oklahoma. Their younger brother, Waite Phillips was the benefactor of Philmont Scout Ranch....
 and Unocal. The process of making such bids would promote a frenzy of asset divestiture and debt reduction in the target companies. This is a standard defensive tactic calculated to boost the current share price, although possibly at the expense of long term strategic advantage. The target shares would rise sharply in price, at which point Pickens would dispose of his interest at a substantial profit.

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 Chevron to act as its white knight in 1984. Gulf divested many of its worldwide operating subsidiaries and then merged with Chevron. The Mesa group of investors was reported to have made a profit of $760 million when it assigned its Gulf shares to Chevron.

The forced merger of Gulf and Chevron was a controversy that was widely discussed and was referred to the Federal Trade Commission
Federal Trade Commission

The Federal Trade Commission is an Independent agencies of the United States government, established in 1914 by the Federal Trade Commission Act....
 (FTC). The FTC only approved the deal subject to strict conditions. Never before had a "small operator" successfully taken apart a Fortune 500
Fortune 500

The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 United States public corporations as measured by their gross revenue, although Fortune makes adjustments to the revenue for a number of companies, particularly to exclude the impact of excise taxes companies collect....
 company. The $13-billion merger with Chevron would become the largest corporate merger in world history to that time, and as of 2006 it still remained the second largest. Chevron, to settle with the government antitrust requirements, sold some Gulf stations and a refinery in the eastern United States to British Petroleum
BP

BP plc , is the third largest global energy corporation, a multinational corporation oil company with headquarters in London. The company is among the largest private sector energy corporations in the world, and one of the six "supermajors" ....
 (BP) and Cumberland Farms
Cumberland Farms

Cumberland Farms is a regional chain of convenience stores based in Canton, Massachusetts, and operating primarily in the eastern United States....
 in 1985 as well as some of the international operations.

Aftermath


BP, Chevron, Cumberland Farms and other companies that acquired former Gulf operations continued to use the Gulf name through the early 1990s. This caused consumer confusion in the US retail market as the parent companies would not accept each others' credit cards. All former Gulf stations franchised by BP and Chevron in the United States have since been converted to those names. Gulf Oil Limited Partnership ('GOLP'), based in Chelsea, Massachusetts
Chelsea, Massachusetts

Chelsea is a city in Suffolk County, Massachusetts, Massachusetts, United States directly across the Mystic River from the city of Boston, Massachusetts....
 (but has since moved to Newton, Massachusetts in 2007), has bought a license for North American rights to the Gulf brand from Chevron. Chevron still owns the Gulf brand, but as of 2006 was making almost no direct use of it. GOLP operates a distribution network reaching from Maine to Ohio. Most Gulf-branded filling stations in North America are owned by Cumberland Farms
Cumberland Farms

Cumberland Farms is a regional chain of convenience stores based in Canton, Massachusetts, and operating primarily in the eastern United States....
 of Canton, Massachusetts
Canton, Massachusetts

Canton is a town in Norfolk County, Massachusetts, Massachusetts, United States. The population was 20,775 at the 2000 census. Canton is part of Greater Boston, about 15 miles southwest of downtown Boston....
, which owns a two-thirds interest in GOLP. In addition there are some independently-owned franchise
Franchising

Franchising refers to the methods of practicing and using another person's philosophy of business. The franchisor grants the independent operator the right to distribute its products, techniques, and trademarks for a percentage of gross monthly sales and a royalty fee....
s still operating under the Gulf brand within North America, such as the American Refining Group, which is licensed by Chevron to blend and distribute Gulf-branded lubricants.

Gulf Oil International (GOI) owns the rights to the Gulf brand outside North America and is based in London. It is owned by an anonymous Luxembourg investment trust, and functions as an independent business. GOI's own literature claims that it is a part of the Hinduja group. GOI trades mainly in lubricants, oils, and greases and has exclusive rights to the Gulf brand outside North America. GOI is also involved in franchising the Gulf brand to operators in the petroleum and automotive sectors; Gulf-branded filling stations can be found in several countries including the UK, Belgium, the Netherlands, Sweden, and Madagascar. GOI has direct and indirect interests in a number of businesses that use the Gulf brand under license.

The Canadian exploration and production arm of Gulf Oil continued as an independent oil company (Gulf Canada Resources) until its acquisition by Conoco
Conoco Inc.

Conoco Inc. was an United States oil company founded in 1875 as the Continental Oil and Transportation Company. Based in Ogden, Utah, the company was a coal, oil, kerosene, grease and candles distributor in the West....
 in 2002.

Most Gulf downstream operations in Europe were sold to the Kuwait Petroleum Corporation
Kuwait Petroleum Corporation

Kuwait Petroleum Corporation is Kuwait national crude oil company, headquartered in Kuwait City. It was founded on January 27th, 1980 as an umbrella company, integrating Kuwait Oil Company, Kuwait National Petroleum Company, KOTC and PIC and effectively placing them under government control....
 in early 1983. The associated Gulf filling stations were converted to trade under the Q8 brand by 1988. However, attempts to sell Gulf Oil (Great Britain) to KPC failed because of irrevocable GOC guarantees given earlier in regard to bonds issued to finance the construction of refinery facilities in the UK. GO(GB) was taken over by Chevron and its stations continued to use the Gulf brand name and insignia until 1997 when the network was sold to Shell
Shell Oil

Shell Oil can refer to one of the following:*Royal Dutch Shell, one of the world's leading energy companies, based in the Netherlands and the UK...
, although by this stage a fairly large proportion of Gulf stations were supplied by jobbers rather than Gulf Oil (GB). Gulf completely withdrew from the UK in 1997. This represented the end of the last major "downstream" use of the Gulf brand by Chevron.

Revival


GOI continues to sell Gulf-branded lubricants worldwide through a network of country subsidiary companies. Some of these subsidiaries franchise use of the Gulf brand to local independent petroleum retailers ("affiliates"). Hence, Gulf-branded products and filling stations can still be found in many countries.

Several former GOC subsidiaries were sold to local owners (e.g. Gulf Oil India to a partnership including GOI, Ashok Leyland and the Hinduja group) who continue to use the Gulf name and insignia. Gulf Oil India (GOIn) has raised the market profile of the Gulf brand in recent years. It has introduced the whole range of Gulf international products into South Asia through toll blending arrangements. In 1995, GOIn set up its first blending plant at Silvassa (with technical assistance from GOI) to produce Gulf-branded lubricants locally. These local lubricants are produced to Gulf specifications and sell at a premium to the products of wholly-local competitors. In 2002, GOIn merged with the explosives manufacturer IDL to form Gulf Oil Corporation Ltd, an Indian Company described as a member of the Hinduja Group. The direct GOI interest in this company is limited to 20 percent of GOCL's equity held by Gulf Oil International (Mauritius) Inc. GOCL claims to have gained a six-percent share of the Indian automotive lubricant market and a three-percent share of the industrial market. GOCL exports to South Asian countries including Bangladesh, Nepal, Indonesia, the Philippines, and Taiwan. It also provides Gulf product licensing and technical support to local affiliates in the region including a major manufacturing operation in China.

GOI has now licensed the Gulf brand and logo in the UK to the Bayford group, one of the largest independent fuel distributors. Starting in 2001, a new Gulf network of independent stations is slowly reappearing across the UK. At present, many of these stations are notable for offering genuine leaded four-star petrol, for which Bayford has a special dispensation to sell. At the same time, Gulf Lubricants (UK) Ltd was set up to market Gulf products (mostly manufactured by the Gulf Netherlands operation) in the UK. This return by Gulf to the UK after a four-year absence used driven by the slogan "The Return of the Legend." The post-2001 Gulf presence in the UK is a wholly-network-based operation. It involves almost no direct Gulf investment in fixed assets, corporate infrastructure, or manufacturing capability. This is a complete contrast to the pre-1997 presence.

GOLP has been expanding use of the Gulf brand in the Northeast USA, and it has become conspicuous at major sporting events in the area with ads for Gulf in New York City
New York City

The City of New York is the List of United States cities by population in the United States, while the New York metropolitan area ranks among the List of urban areas by population....
, Boston, Philadelphia, and Pittsburgh
Pittsburgh, Pennsylvania

Pittsburgh is the second largest city in the U.S. state of Pennsylvania with a population of 312,819. The population of the seven-county metropolitan area is 2,462,571....
. To take one case as an illustrative example of the Gulf revival—after Texaco
Texaco

Texaco is the name of an United States petroleum retail brand. Its flagship product is its fuel,"Texaco with Techron". It also owns the Havoline motor oil brand....
's 2001 merger with Chevron, many former Texaco stations in Pittsburgh switched to Gulf since Chevron does not service the Greater Pittsburgh area. (Although Chevron does service the nearby Morgantown, West Virginia
Morgantown, West Virginia

Morgantown is a city in and the county seat of Monongalia County, West Virginia, West Virginia, United States, on the banks of the Monongahela River....
 and the Wheeling, West Virginia
Wheeling, West Virginia

Wheeling is a city in Marshall County, West Virginia and Ohio County, West Virginia counties in the U.S. state of West Virginia. Most of the city lies in Ohio County, for which it is the county seat....
/Steubenville, Ohio
Steubenville, Ohio

Steubenville is a city located along the Ohio River in Jefferson County, Ohio, Ohio, in the United States. It is the county seat of Jefferson County, Ohio and is largely considered part of the Pittsburgh Tri-State area, unofficially as a suburb despite its own individual identity....
 areas.) As a result, the Texaco brand name disappeared from the area in June 2006 when the nonexclusive rights agreement with Shell
Shell Oil

Shell Oil can refer to one of the following:*Royal Dutch Shell, one of the world's leading energy companies, based in the Netherlands and the UK...
 expired, with Shell itself expanding in the area by means other than Texaco.

The Gulf logo (shown at the head of this page) is still used around the world by a large number of business interests. It is a widely recognized brand and many independent operators are willing to pay for the franchise rights to use it. Although Chevron, GOLP, GOCL 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.

Between 1980 and 2000, Gulf moved from being a monolithic, vertically-integrated multinational corporation to being more of a network of allied business interests. This has given the entire Gulf enterprise a high degree of strategic and operational flexibility. It is a move that reflects fundamental change in the economics of international business.

Alliances represent yet another shift in the organization of economic transactions from organizational hierarchies to networks; from mass to flexible production; from large, vertically-integrated organizations to disintegration and horizontal networks of economic units; from "Fordist" to "post-Fordist" companies.


Case studies in current use of the Gulf brand


Independent filling stations in the UK

Gulfservice
In 1970, there were nearly 25,000 filling stations in the UK, of which 10,000 were 'independents' (typically, privately-owned and supplied by a major or jobber while using a brand under license). By the end of 1999, the number of filling stations had dropped to 13,700 and to 9,700 at the end of 2005. In recent years, filling stations have been closing at a rate of 50 per month. Many of the smaller and independent stations have succumbed to competition from out-of-town supermarkets that undercut local enterprises through sheer volume of sales and shared overheads.

The Gulf brand in the UK is franchised by GOI to the Bayford group which specializes in operating service stations on minor trunk roads in rural areas. Bayford supplies about 185 Gulf-branded filling stations in the UK, all of which are independently owned. The Gulf filling stations provide outlets for Gulf-branded oils and lubricants.

The illustration shows a typical Bayford/Gulf filling station in the UK, still associated with a service garage, restaurant and retailing facilities. It is in an isolated location, five miles (8 km) south of Wooler in the Cheviot Hills, catering to both local residents and passing tourist traffic. It is not vulnerable to competition from supermarkets and provides something of a local community center.

Pennsylvania Turnpike


For decades, Gulf operated filling stations on the Pennsylvania Turnpike
Pennsylvania Turnpike

The Pennsylvania Turnpike is a toll highway system operated by the Pennsylvania Turnpike Commission in the state of Pennsylvania, United States....
 toll highway system alongside the Howard Johnson's
Howard Johnson's

Howard Johnson's is a restaurant chain of restaurants and hotels, located primarily throughout the United States and Canada. The name is derived from the founder of the original company, Howard Deering Johnson, who started the initial chain of restaurants and motels....
 restaurants at the Turnpike's travel plazas (which correspond to European motorway service areas). This began in 1950 with the opening of the Philadelphia Extension, and Gulf added more filling stations as the system was extended. The Standard Oil Company of Pennsylvania (now part of Exxon
Exxon

Exxon is a brand of fuel sold by ExxonMobil....
) had exclusive rights to provide filling station services on the sections of the system that opened prior to 1950, principally the Irwin
Irwin, Pennsylvania

Irwin is a borough in Westmoreland County, Pennsylvania, Pennsylvania, 22 miles southeast of Pittsburgh. Some of the most extensive bituminous coal deposits in the State are located here....
-to-Carlisle
Carlisle, Pennsylvania

Carlisle is a borough in Cumberland County, Pennsylvania, Pennsylvania, 18 miles west by southwest of Harrisburg, Pennsylvania, the State capital....
 section.

In the 1980s, Sunoco
Sunoco

Sunoco is an United States petroleum and petrochemical manufacturer headquartered in Philadelphia, Pennsylvania, Pennsylvania, United States, formerly known as Sun Company Inc. and Sun Oil Co. ....
 was awarded the franchise to operate the filling stations at the Sideling Hill and now-closed Hempfield travel plazas. This led to a bidding war among three of Pennsylvania
Pennsylvania

The Commonwealth of Pennsylvania , often colloquially referred to as PA by natives and Northeasterners, is a U.S. state located in the Northeastern United States and Mid-Atlantic States regions of the United States....
's most recognizable gasoline brands each time a travel plaza franchise came up for renewal.

Gulf had the opportunity to become the exclusive provider of filling stations at travel plazas along the Pennsylvania Turnpike after Exxon withdrew from the Turnpike in 1990. GOLP submitted a bid to the Pennsylvania Turnpike Commission
Pennsylvania Turnpike Commission

The Pennsylvania Turnpike Commission was created in 1937 to construct, finance, operate and maintain the Pennsylvania Turnpike. The commission consists of five members....
, but the Commission preferred a bid submitted by Sunoco. The Commission’s decision in this regard may have been influenced by the recent instability of the Gulf brand. By 1993, the Gulf filling stations on the Turnpike (as with the Exxon ones before it) had converted to Sunoco. All of the travel plazas continue to sell Sunoco fuel to this day.

Gulf products

The current industry norm is not to give distinctive branding to fuels. Most filling stations in Europe sell three types of fuel: unleaded, LRP, and Diesel. Although these products lack any real brand differentiation, this has not always been the case. Until well into the 1970s, Gulf (in common with other oil companies) sold distinctive brands of petrol/gasoline including subregular Gulftane, Good Gulf regular, Gulf No-Nox premium, and Gulf Super Unleaded. Gulf petrol was sold using the slogans "Good Gulf Gasoline," and "Gulf — the Gas with Guts." Gulf service stations often supplied customers with pens and key rings bearing these slogans. For a few years, beginning in 1966, Gulf stations in the U.S. gave away orange plastic "Extra Kick Horseshoes" to customers who filled their tanks with Gulf's No-Nox premium gasoline (the novelty items were commonly mounted on bumpers).

This current loss of brand differentiation reflects the modern reality of petroleum distribution and marketing. For example, none of the Gulf-branded petrol sold in the UK actually comes from a Gulf refinery. Petrol/gas retailers compete mainly on price and outlet convenience. Petrol sold through supermarkets is generally unbranded.

GOI still produces and sells a wide range of branded oil based products including lubricants and greases of all kinds. These include products for a variety of applications ranging from metal working oils to refrigeration oils. Car engine oils include the Gulf Formula, Gulf MAX, and Gulf TEC ranges. Heavy duty diesel engine lubricants include the Gulf Supreme and Gulf Superfleet ranges. The sale of lubricants is one area where product specification and quality assurance are vital elements. Therefore, brand differentiation remains a feature of the marketplace. Gulf's product catalog includes a well-developed portfolio of 400 distinctive products.

Other information


  • On June 17, 1974, Gulf Oil's Pittsburgh headquarters was bombed by the Weathermen
    Weatherman (organization)

    Weatherman, known colloquially as the Weathermen and later the Weather Underground Organization , was an United States radical left organization founded in 1969 by leaders and members who split from the Students for a Democratic Society ....
     to protest against Gulf's operations in Angola
    Angola

    Angola, officially the Republic of Angola , is a country in south-central Africa bordering Namibia to the south, Democratic Republic of the Congo to the north, and Zambia to the east, and with a west coast along the Atlantic Ocean....
    , Vietnam
    Vietnam

    Vietnam , officially the Socialist Republic of Vietnam , is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by People's Republic of China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea to the east....
    , and elsewhere. Nobody was hurt and damage was minimal.


External links

  • Gulf Oil Limited Partnership (largely Cumberland Farms owned) website:
  • Gulf Oil International website:
  • GOI UK subsidiary:
  • GOI Netherlands subsidiary:
  • Gulf Oil Corporation Ltd (was Gulf Oil India) website:
  • Gulf Oil Historical Society:
  • Oil UK (provides sales, marketing, technical services and logistics support to Gulf Lubricants (UK) Ltd):
  • Gulf Oil in Puerto Rico (Caribbean Petroleum Corporation) website:
  • History of the Mellons and Mellon Financial (from which Gulf Oil was managed from 1901 to 1981 as well as having financed the 1984 buyout:
  • Series on Gulf and Mellon's involvement in the oil industry and mid-east oil:
  • Graphic on Gulf Oil's discoveries and involvement in the middle east: