Shell, Texaco, and the Bonds of Oily Wedlock

You'd think that a merger of two oil giants giving the new partners a 15 percent armlock on the domestic fuel market would arouse some public comment, if not outrage and obloquy. In the old days members of Congress--particularly those from the Northeast and Midwest--would be turning out furious press releases and invoking the Sherman Anti-Trust Act, but thus far... nothing. Back in 1973, the year the U.S. Senate almost voted to break up the oil industry, Rep. John Dingell from Michigan held a hearing on the topic of "White Collar Crime in the Oil Industry." Those were more turbulent days. No politician uses that kind of language now.

Shell Oil and Texaco, among the largest oil companies on the planet, are now well along in an engagement that is to be finalized with marriage vows sometime next year. Scheduled for merger are the U.S. refining and marketing operations of the two companies. When it comes to selling gasoline, the new entity will be the largest company in the U.S.

Thus far no one in any position of regulatory oversight has seen fit to raise a bleat, which is all the more surprising given the fact that earlier this year gas prices suddenly shot up amid much head-scratching on the TV new shows and in newsrooms across the country. The real reason, of course, was never even hinted at: The big oil companies were simply doing what came natural to them--fixing prices. The merger of Shell and Texaco will only increase the frequency of similar "inexplicable" increases in the future.

The only cautionary note sounded by the Clinton administration came from Deputy Energy Secretary Charles Curtis. Last week he addressed oil company executives at the annual confab of the American Petroleum Institute. Curtis wagged the most deferential of fingers. "Domestic energy prices have grown brittle, with troubling results," Curtis said politely. "Investors and consumers don't like surprises, but that's what they're getting. Public confidence in the free market erodes when prices suddenly increase. Too much volatility will create demand for political solutions that are short-sighted and ill-conceived."

Far more agitated than Curtis are employees of Shell. They have told company executives that they fear the merger may well bring unwelcome Texaco policies, in the form of discriminatory hiring and promotion practices, such as those that recently cost the company $176 million in a settlement of a class action suit. During the suit, lawyers for the plaintiffs released a secret tape recording made by a vice president of Texaco in which executives of the company referred to black employees as "porch monkeys," "orangutans," and "Aunt Jemimas."

Shell's vice president, Jim Morgan, responded to these fears with a letter to Shell employees sent on November 21. "I want to assure you that we have no intention of entering into any relationship that is not based on high ethical standards and the utmost respect for individuals," Morgan wrote. "Compatibility in values and standards of integrity between two parties considering entering into a relationship are critically important."

Noble sentiments indeed, albeit somewhat undercut by some unwholesome chapters in Shell's treatment of its own black employees. Shell is now facing two class action suits alleging that the company discriminates against African Americans. No black employee in the company's retail marketing division has ever made it into Shell's senior or executive ranks. In the entire history of Shell Oil USA, only two African Americans have ever been promoted to senior management in any part of the company.

As at Texaco, black employees who have confronted management about the apparent impossibility of rising up Shell's corporate ladder have been met with contemptuous rebuffs. One of the most honored Shell employees is a black engineer named Jimmy Hunter, a Shell man since 1979. He's twice been given Shell's top company honor, the Laurel Society Award. But the expected promotions never followed. When Hunter questioned his supervisor, he says he was told, "I don't know why you still have shackles around your ankles."

Another plaintiff in the class action suit against Shell is Sharon Ambeaux. She developed a sales and marketing program called "Crazy Days." The program was a huge success. But Ambeaux remained mired at a near entry level pay grade after 17 years of service.

Vociferous in denunciations of Texaco has been Jesse Jackson. When the infamous Texaco Company tapes first surfaced, with racist remarks by Texaco executives played on Ted Koppel's Nightline, Jackson called for a boycott of the company and asked drivers to cut up their Texaco credit cards. Then he warned of a nationwide stock divestiture campaign if Texaco did not change its ways.

No such fulminations have come from Jackson in the case of Shell. The reason may have to do with one of the foulest chapters in Shell's history: its role in the destruction of Ogoni tribal lands in Nigeria, and in the execution of the premier Ogoni political activist, Ken Saro-Wiwa, and eight of his colleagues. Exactly a year ago Saro-Wiwa and his friends went to the gallows, not long after Royal Dutch Shell (parent to the American subsidiary) warned the Nigerian government that Ogoni protests over its environmentally destructive drilling practices and tribal demands for a share of the billions in past oil revenues must be quelled; otherwise Shell would pull out of Nigeria altogether.

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