Edward L. Doheny located Los Angeles’s first well in 1892, and five years later there were twenty-five hundred wells and two hundred oil companies in the area. When Standard entered California in 1900, seven integrated oil companies already flourished there. The Union Oil Company was the most important of these.
Operating difficulties plus the threat of taxation on its out-of-state properties led to the creation of the Standard Oil Trust in 1882. In 1899 the trust created Standard Oil Company (New Jersey), which became the parent company. The trust controlled member corporations principally through stock ownership, an arrangement not unlike that of the modern-day holding company.