TRICKY FORTUNES of the Esso Fleet

Sea Classics, Sep 2007 by McLaren, Robert

Flying the flag of the world's largest oil cartel was no guarantee of security, longevity or smooth sailing / BY ROBERT McLAREN

The year 1911 was not a good year for Standard oil Company. The Supreme Court ordered the giant company to dissolve. One of the separate companies that emerged was the Standard oil Company of New Jersey (incorporated in Delaware). For a time it was known as Jersey Standard, the Delaware Company and after 1923, ESSO from the word ESS meaning the letter S and O for oil.

The company started its new life with a shortage of tankers. It mainly relied on chartered vessels and those of the DeutshchAmerikaniache PetroleumGesellschafi (DAPG), a German affiliate to transport the company's crude and refined products. During 1913, the company's first tankers were built, named the SS William Rockefeller and SS John D. Archbold, and joined the fleet in 1914.

At the outbreak of WWI, the company's Foreign Shipping Department, which managed all marine operations, gained control of DAP6 vessels interned in neutral American ports. In a very short time, the company tanker fleet expanded from two to 28 tankers. Additional tanker tonnage was constructed to meet subsequent war time needs and by 1917 Jersey Standard owned 41 tankers. That was more than a quarter of all American registered tankers afloat.

By 1919, half of the company's tankers sailing under the Jersey flag were lees than three-years old. The combined fleet of 71 ships was the second largest privately owned fleet only surpassed by the Royal Dutch- Shell fleet. During the war, the two original tankers were lost to enemy action.

At the end of WWI, a shipping boom was under way and many companies were placing shipyard orders for new ships, including Jersey Standard. In early 1920, the boom went into a depression and by the fall of the same year the company was forced to lay-up twelve tankers. The ships were used as floating storage to offset losses.

In 1923, the dire situation reversed; the idle tankers were emptied and sailed to California to participate in the oil rush. By October 1927, the Jersey fleet and its affiliates consisted of 92 tankers of the following registry:

Jersey Standard Shipping flying the American flag - 38

Imperial, British registry - 15

Battisch-Amerikanische (BAPICO) based inthe free city of Danzig, Germany - 13

Eight European Continent affiliates - 22

Peruvian, Argentine and Dutch registry- 4

The Jersey Company provided policy guidance and the affiliates were left to manage their own shipping affairs. Jersey Standard had good years from 1920 to 1928 lifting crude oil and products for its affiliates between ports on the Gulf of Mexico and Atlantic Coast of the United States. It also carried crude oil to Jersey refineries from Humble and Baytown, Texas, terminals to Baton Rouge, Louisiana, to sell to its markets. However in 1930, Jersey Standard had to tie-up 22 US-flag and five foreign-flag ships in response to market fluctuations. During 1931, about a quarter of the world's tankers were idle.

In May 1932, Jersey Standard purchased the Pan American Foreign Corporation's capital stock which added reserves of crude oil in Venezuela and Mexico. This large purchase also included 27 ocean going tankers and 25 smaller tankers that were used to lift crude oil from Lake Maracaibo wells in Venezuela to the Aruba refinery, all this when 25 tankers were tied-up. Again more ships were added to the growing fleet with the purchase of Hnastera Petroleum Company, Anglo-American Oil Company, Ltd. and Largo Shipping Company, Ltd. In 1933, seven new tankers were added to the fleet and the idle tankers were reduced to 17.

Demand for petroleum products remained high during 1934. Standard's tankers in reasonable condition were kept busy as shipments of fuel oil from California to North Atlantic ports continued. In 1935, the concern of an aging tanker fleet and the need for a construction program was being considered. Under existing National Maritime Policy, the coast wide shipping fleet was restricted to vessels constructed in American shipyards and flying the American flag. American built and registered ships did, in fact, have a greater expense than the foreign built and flag tankers used by Jersey's affiliates.

On 31 May 1935, with growing concern over Nazi intentions in Europe, the entire BAPICO fleet was transferred from Danzig, Germany, to Panamanian registry, creating the Panama Transportation Company (PTC) as affiliate. In December of the same year Standard Shipping Company and the Marine Properties of Pan American Foreign Corporation merged with Jersey Standard Marine Department. By the end of 1936, the Jersey fleet consisted of 191 tankers. All serviceable vessels were in operation by the middle of 1937, as freight rates reached the highest level since 1930.

As the world tensions increased, the company agreed to participate in a "National Defense Tanker Program" sponsored by the US Maritime Commission. Jersey agreed to construct twelve new tankers with special features to speed conversion into Naval Auxiliaries, with the Maritime Commission funding the special features. The oil industry suffered again in 1938, due to decreased production and increased costs. Lower freight rates also came into effect. While ESSO added six ocean-going tankers to its fleet, it agreed to a Maritime request to sell four of the new "National Defense Tankers" to other operators.