The market for oil remained confined to lighting and lubricants until, in 1886, the internal combustion engine and demand for gasoline arrived with Karl Benz and the first Mercedes. By now the Samuel business had passed to Marcus Samuel junior and his brother Sam. They exported British machinery, textiles and tools to newly industrialising Japan and the Far East and on return imported rice, silk, china and copperware to the Middle East and Europe. In London, they traded in commodities such as sugar, flour and wheat worldwide.
It was during a trip to Japan that Marcus became interested in the oil exporting business then based in Baku, Russia. The Rothschilds had invested heavily in the ...view middle of the document...
This was the origins of what was to become the Royal Dutch Petroleum Company.
Under the management of J.B. August Kessler, they built a pipeline and refinery at Pankalan Brandan. Kessler was joined in 1896 by a dynamic young marketing director, Henry Deterding, who was to become a dominant figure in the company until the outbreak of the Second World War. Faced with the competition from the Samuels’ low bulk transport costs, Royal Dutch began the construction of tankers and bulk storage installations and set up its own sales organisation.
Seeking new oil sources
By the turn of the century, Marcus Samuel had become the model of an Edwardian plutocrat with a grand house in London and a country mansion, which had been bought lock, stock and barrel with furniture, pictures and parkland from Lord Romney. He kept horses and carriage and was active in public life in the City of London. He was knighted in 1898, became Lord Mayor of London and was a leading figure in the London business community. But Marcus Samuel’s dependence on Russian producers left him vulnerable and he decided to seek other sources of oil.
The Far East was the obvious place to look – and his first venture into Borneo brought him up against Royal Dutch Petroleum, one of the region’s biggest competitors. The two companies joined forces to protect themselves against the might of Standard Oil, forming a sales organisation in 1903, the Asiatic Petroleum Company. The discovery of oil in Texas offset a...