Royal Dutch Shell is the Anglo-Dutch multinational oil company formed in 1907 by the amalgamation of the Royal Dutch Petroleum Company (the Dutch parent of the East Indian oil interests that began with the 1890 founding of the Koninklijke Maatschappij tot ontginning van Petroleum terreinen in Nederlandsch Indië) and the Shell Transport and Trading Company (the British oil-transport concern). The amalgamation created the B.P.M. (Bataafsche Petroleum Maatschappij) as the Royal Dutch operating subsidiary for the Netherlands East Indies, and the B.P.M. subsequently became the dominant oil company in the Indies — producing 4,544,255 tons of crude oil in 1940 (57.3 % of the East Indian total) and operating the great majority of the Atjeh and northern-Sumatran oil fields, including the East Atjeh block, the Tamiang block, the Aru Bay field, the Telaga Said field and the Bulu Telang field.
Founding and the 1890 Royal Dutch predecessor
Van Bemmelen’s account of the Royal Dutch predecessor’s founding reads:
“1890 the concession became the first oil property of the newly founded ‘Koninklijke Maatschappij tot ontginning van Petroleum terreinen in Nederlandsch Indië’ (Royal Company for the exploitation of oil fields in the Netherlands East Indies). This concern is now known all over the world by the name of Royal Dutch.”
The 1890 founding of the Koninklijke Maatschappij — the future Royal Dutch — took place in the immediate aftermath of the 1885 Fennema-led drilling success at Telaga Said on the 1883 Zulkler concession. The first oil property of the new company was accordingly the Telaga Said concession itself, which the company acquired in 1890 and which became the founding asset of the Royal Dutch. The northern-Sumatran oil industry is, in this sense, the originating locus of the entire Royal Dutch (and subsequently Royal Dutch Shell) oil empire.
The 1907 amalgamation with Shell
Van Bemmelen’s account of the 1907 amalgamation reads:
“Of great importance was the amalgamation of the Royal Dutch and the Shell Oil Company in 1907. A new company was to develop the oil concessions in the Netherlands East Indies and to build and operate refineries for crude oil. This subsidiary company, the ‘Bataafsche Petroleum Maatschappij’ (Batavian Oil Company, B.P.M.), has since taken over all interests of the Royal Dutch in the Indian Archipelago.”
The 1907 amalgamation created the B.P.M. as the operating subsidiary for the East Indian oil interests, and the B.P.M. subsequently took over “all interests of the Royal Dutch in the Indian Archipelago”. The Royal Dutch Shell group, with its 60 % Dutch (Royal Dutch) and 40 % British (Shell) ownership structure, became the dominant oil company in the East Indies and one of the most successful and influential oil concerns in the world. The B.P.M., as the group’s East Indian operating subsidiary, accordingly became the principal vehicle through which Royal Dutch Shell conducted its East Indian oil business — including the Atjeh and northern-Sumatran operations that are the subject of this wiki.
Royal Dutch Shell operations on Atjeh territory
Through its B.P.M. subsidiary, Royal Dutch Shell operated:
- The East Atjeh block (4,626 tons in 1941).
- The Tamiang block (709,625 tons in 1940, 527,590 tons in 1941) — by a wide margin the largest producing field of the North Sumatra oil province.
- The Aru Bay field (55,924 tons in 1940, 55,070 tons in 1941).
- The Telaga Said field (1,076 tons in 1940, 960 tons in 1941) — the founding property of Royal Dutch itself.
- The Bulu Telang field (919 tons in 1940, 900 tons in 1941).
- The S. Aru Bay (block) (2,100 tons in 1940, 5,030 tons in 1941).
Royal Dutch Shell also, through the B.P.M., operated the Pangkalan Brandan refinery in North Sumatra — one of the five large refineries of the pre-war East Indian oil industry, and the only large refinery in North Sumatra.
Significance
Royal Dutch Shell is significant for the encyclopedia of Acheh history because its 1907 amalgamation and the subsequent creation of the B.P.M. as the East Indian operating subsidiary established the corporate structure within which the great majority of the colonial Atjeh and northern-Sumatran oil industry was conducted. The B.P.M.’s dominance of the East Indian oil industry (57.3 % of crude production in 1940) made Royal Dutch Shell the most important single corporate actor in the colonial mineral economy of which Atjeh was a part, and the company’s operations — anchored by the Pangkalan Brandan refinery — were the principal industrial presence of the colonial oil economy in the Atjeh region. The fact that the originating asset of the entire Royal Dutch (and subsequently Royal Dutch Shell) oil empire was the 1885 Telaga Said drilling on the 1883 Zulkler concession also makes the northern-Sumatran oil industry the founding locus of the company’s global presence.
See Also
- Aru Bay
- B.P.M.
- Bulu Telang
- East Atjeh oil block
- J. Zulkler
- N.I.A.M.
- N.K.P.M.
- N.L.A.M.
- N.N.G.P.M.
- N.P.P.M.
- Netherlands Indies Mining Law of 1899
- Oil exploration in North Sumatra
- Ph. C. Fennema
- Tamiang oil block
- Telaga Said
- Van Bemmelen’s The Geology of Indonesia (1949)
- 1885
- 1890
- 1907
- 1940
- 1941
Source
The Geology of Indonesia, by R. W. van Bemmelen, Vol. II: Economic Geology (The Hague: Government Printing Office; Martinus Nijhoff, 1949), pp. 7–10 (petroleum history, refining, production tables).