| A
SHORT HISTORY OF LAGO OIL & TRANSPORT COMPANY, LTD. |
| ARUBA, N. W. I. |
| THE
BACKGROUND
|
| The is the story of how Lago
began; with a man in California, who moves to Mexico to develop the oil
industry in that country and then, because of salt water entering his
oil wells he moves to Lake Maracaibo, discovers a vast amount of oil but
was unable to send it to market because the channel into Lake Maracaibo
was to shallow to allow ocean going tankers to enter the lake, so, he
builds a transshipping port on the island of Aruba, runs out of money,
sells his holdings to Standard of Indiana, who builds a small refinery
next to the transshipping facility port, and then, because of a tax that
was anticipated to be imposed on imported crude by the U S Government,
Standard of Indiana sell their holdings
to Standard of New Jersey. Esso purchase Standard of Indiana's holding, not for the small refinery in Aruba, but for the
vast holding in crude oil Standard of Indiana own under Lake Maracaibo.
Then, because Aruba is under Dutch control, and because Standard
Oil of New Jersey has won a contract to supply Britain with 100 octane
Aviation Gasoline but because of the isolationist movement in the United
States the contract states that the Avgas must be produced outside the United States.
Thus
the Lago refinery becomes an important asset by providing the place outside
the United States where the Avgas will be produced.
The size of the Lago refinery is expanded to produce Avgas long
before the United States enters World War II and then, because of the demand for Avgas created by the war, further expansion is
done at Lago during World War II, making it the largest refinery in the world. |
| During World War II there was a
production agreement reached between the Venezuelan Government and
Standard Oil, which capped the amount of crude that could be export from
the country and the amount of crude that would be processed in
Venezuela. This agreement capped
the size of Lago Oil & Transport Co. Ltd.
at 500,000 barrels a day. This
agreement is the prime reason for the Lago refineries ultimate demise. One book says the Lago refinery is not upgraded and capital
expenditures are instead placed in a new refinery at Amuay Bay so the
agreement can be met for processing of crude in Venezuela. Thus, over time, Lago because of a lack of updating and new
construction, becomes an outdated and non-profitable facility, and in time was
closed. A later book says
the same thing and then goes on to say that Lago was completely upgraded and
$384 million were spent at Lago between 1948 and 1975 to keep the refinery
updated, although its capacity was never expanded. |
| After the closing of the refinery,
Lago began to dismantle the facility in order to be able to return the land
lease, in its original condition, to the Dutch Government.
After dismantling had begun, but before it was completed, a purchaser
was found, Costal Petroleum. It
should also be noted that the last two owners, Costal Petroleum and now El
Paso Natural Gas, both seems to have also found the old Lago refinery facility
not to be profitable, even with the updated facilities.
This statement is based on the fact that Costal sold the refinery to El
Paso and now the rumor is the possible closing of the facility by El Paso
Natural Gas. |
|
THE
STORY
|
|
The Beginning, Pan American Petroleum |
| The story of Lago Oil & Transport
Co. Ltd. begins with Mr. Edward L. Doheny, the founder and head of
Pan
American Petroleum.
In May of 1900, Mr. Doheny, along with C. A. Canfield and A. P.
Maginnis, made a trip to Mexico in hopes of finding oil.
Upon finding oil they formed the Mexican Petroleum Company of
California. This company
developed the first oil fields and refineries in Mexico. |
| On February 2, 1916, Pan American
Petroleum & Transport Company was incorporated and had as its holding the
following: 31 tankers, oil properties in California under the name, Pan
American Petroleum Company, Mexican Petroleum Co. Ltd., The Caloric Company
and British Mexican Petroleum Company. Mr.
Doheny was the President of this new holding company and ran it until his
retirement in 1925; soon after Lago Oil & Transport Co. Ltd. transshipment
facility was started at San Nicholas Bay, on the island of Aruba.
Mr. Doheny had been a wildcatter in California who is credited with the
development of the first oil fields and the oil industry in Mexico. |
| His fields in Tampico were close
to the Gulf of Mexico and as oil was pumped from the oil wells, salt
water was entering the well, over time the crude oil became contaminated
by the salt water. With
large contracts to supply crude to his and other refineries on the Gulf and
East Coast of the United States Mr. Doheny, went looking for a new source of
crude oil. |
| It is interesting to note that in
the book Mexican Petroleum that is printed
in 1922 that Mr. Doheny drilled for oil in Venezuela in 1914.
At that time he drilled wells in four locations and each site produced
oil. It seems he also built a
pipeline to a small refinery he had built in San Lorenzo, which is about sixty
miles south of Lake Maracaibo.
See footnote 1 at end. |
| The book notes that Shell had also built a refinery on the Dutch Island
of Curacao and Pan American Petroleum shipped 300,000 barrels of crude to this
Curacao refinery in 1918. In 1919
Mr. Doheny received geologist reports that there were petroleum over a large
area of Lake Maracaibo but because of World War I, drilling was curtailed.
See footnote 2 at end. |
| Early on, The
Shell Company and Mr. Doheny had been successful in discovering oil in Lake
Maracaibo and it was there that Mr. Doheny returned in search of a new source
of Crude when his wells in Mexico were being contaminated by salt water.
His second explorations were successful and soon he was transporting
crude by barge from Lake Maracaibo to the port of Oranjestad, on the island of
Aruba, for transshipment to the Gulf and East Coast of the United States.
Mr. Doheny's Pan American Petroleum owned refineries in Louisiana and
Savannah, Georgia. |
| The Dutch government imposed no
tax on the importing or exporting of crude, so it was an ideal location
for the transshipment, but a more permanent site was needed because
production was increasing.
Mr. Doheny contracted with Andrew Weir and Company, Ltd., a shipping
company from Britain to provide the ships to transport of the crude from Lake
Maracaibo to a new facility he was planning to build.
The site was to be selected by a representative from Andrew Weir, the
shipping company, Captain Rogers and representatives from Pan American
Petroleum. After much searching a
site was selected. The site
selected was San Nicholas Harbor. At
the time San Nicholas harbor had a small pier, in much disrepair, that had
been use for the shipment of phosphate, that had once been mined on the east
end of Aruba. San Nicholas bay
was a natural harbor, protected from the sea by a natural reef and there was a
small narrow entrance at the West end of the reef allowing small ships to
enter the bay. For this bay to be
used for the transshipment of oil the entrance would have to be widened and
the bay would need to be dredged. Additionally,
piers for the new lake tankers need to be built and storage tanks and pumping
stations for the crude would have to be constructed.
The group looking at the site, felt if was perfect, so after signing a
99-year lease with the Dutch Government work was begun at the end of 1925.
The job was completed and the San Nicholas harbor officially opened in
November of 1927. |
| It was at this time that the
houses on the lower road, from the powerhouse to Rogers Beach were
constructed to house the families of the officers on the lake tanker and
the supervisory personnel operating the transshipping facility. |
| At this point
in the story we now have a crude oil transshipment facility with storage tanks
and about 90 houses for personnel. Pan
American Petroleum owns the facility and the personnel living in the houses
are English families, of officers on the lake tankers, (which are owned and
operated by Andrew Weir) and personnel from Pan American Petroleum, who are
operating the pumping and storage at San Nicholas Harbor. |
|
Standard Oil of Indiana, The beginning of a Refinery |
|
|
|
Soon after building the
transshipment facility in San Nicholas, Standard of Indiana purchased a
stock interest in Pan American Petroleum, however they did not have a
controlling interest in Pan American Petroleum but they continued to
purchase stock in the company. |
|
Because of the large amount of crude being pumped from beneath Lake
Maracaibo it was Pan American Petroleum who decided to build a refinery
in Aruba, but it was Standard Oil of Indiana, because of their now large
stock interest in Pan American Petroleum, who provided all the technical
and supervisory personnel for the construction and operation of the
refinery. Again the decision to build a refinery on Aruba was
done for many reasons: Pan American Petroleum and Standard of Indiana both an
eye to the foreign markets and Aruba was well situated because of its location
in the world, Aruba is closer to Europe than the East Coast of the United
States, thus shipping to Europe is cheaper than shipping from the U. S. Aruba
also had a population of between seven and eight thousand and the men of the
island were forced to migrate to Cuba to cut sugar so Standard of Indiana
assumed there would be a willing and able work force on the island, and
finely, and most important, was the stability of the Dutch government as
compared to that of the Venezuelan Government.
In Standard Oil Company (Indiana) Oil Pioneers of the Middle West
Aruba
is described as not an attractive tropical island and because of it being
barren, it was necessary to import all the materials to construct a refinery,
as well as provide everything for the care and comfort of its employees.
All the technical and supervisory personnel sent to Aruba by Standard
of Indiana were sent from their state side facilities, mostly from the Whiting
refinery in Indiana and the Standard of Indiana refinery in Casper Wyoming.
They were all housed in what had become Lago Colony, an expansion of
the housing that was provided by Pan American Petroleum for its foreign staff
employees and ship officer's families.
See
photo 1 for a view of the refinery and the small colony at the time of the
sale of the facility to Standard of New Jersey. (Note: From the photo in New
Horizons, which did not reproduce that well, it looks like the last road in
the Colony in 1932 was the road that left the refinery gate, went up past the
area later used to build the American Legion, Dr. Reeves dental office, the
back of the elementary school and must have stopped at the five-way
intersection by Colony Service. The
houses on the lower road seem to stop at Rogers Beach. Even in the book the
photo is not too clear. Dan). |
|
Construction
was begun in May of 1928 on the refinery and by January 1, 1929 the first
refinery units were in operation. The
last unit was completed in December of 1929.
This was, at the time, one of the most modern refineries in the world,
with an initial capacity to process 111,000 barrels of crude a day.
Because it only processed the heavy crude from Venezuela the refinery
was designed to handle only the one type of crude and thus the refinery was
very efficient, even though the product it was processing had a high asphaltic
base, a high sulphur content and was heavier in gravity and more viscous that
most crude found in the United States.
The
new refinery was both a topping and cracking plant and greatly increased the
amount of gasoline Standard of Indiana produced. In the end this proved costly to Standard of Indiana because
they did not have the marketing facilities in the United States or abroad from
which to sell the new volume of gasoline they were now producing in Aruba. |
|
During this period there was a
proxy fight between Colonel Robert W. Stewart, Chairman of the Board of
Standard of Indiana and Mr. John D. Rockefeller that began over Mr.
Rockefeller wanting Colonel Stewart to resign as Chairman of Standard of
Indiana. Unable to obtain a
resignation, Mr. Rockefeller issued a statement that he had lost confidence in
Stewart. The court battle
that followed dragged on for a long time and in the end Mr. Stewart lost. |
|
After Stewart, Edward G. Seubert was made President of Standard of Indiana. Because of
information that came out in the court fight between Stewart and Rockefeller
over Stewart's mismanagement of Standard Oil of Indiana (the teapot dome
scandal), Pan American Petroleum and its holding, Seubert called for a full
investigation of all these allegations. |
|
It was Seubert
who, during this period, acquired full control of Pan American Petroleum, the
stock swaps began in August of 1929 and by the end of 1932 Standard Oil of
Indiana had 97.37 % of Pan American Petroleum's Class A stock and 95.96 % of
its Class B stock. |
|
This brings us
to 1932 and in Aruba we have a crude oil transshipment facility, a refinery
that processes 110,000 barrels of crude a day and a colony that extend back
from Rogers Beach with three rows of houses.
Standard of Indiana now owns it, but because Standard of Indiana has no
place to sell the gasoline it is now producing, the refinery is not
profitable. |
|
Standard of
Indiana soon realized that the cost of opening foreign markets would be very
expensive and at this same time the US Government was talking about imposed an
import tax on foreign crude imported into the United States.
This tax would have made the petroleum products from Aruba more
expensive in the United States and thus unprofitable to sell there.
This left Standard of Indian with little, to no, foreign marketing
facilities, and if the U. S. Import Tax were enacted, no market in which to
sell the production from Aruba. |
|
Standard of Indiana did not go
looking for a buyer, they learned from one of their Board of Directors
that Standard of New Jersey was interest in their foreign holding. Standard of Indiana
understood that it would take a company with large resources to purchase their
entire former Pan American Petroleum holding and so they offer them to Shell
Oil, The Texas Company and Standard Oil of New Jersey. |
|
Standard Oil of New Jersey, the Expansion of the Refinery |
|
The buyer was Standard Oil of New
Jersey. The purchase price was $140,542,292.11. This sum was paid by $50,000.00 in Cash and $90,452,293.11 in
Standard Oil of New Jersey stock. Walter
C. Teagle, the President of Standard Oil of New Jersey made the purchase, not
so much for the refinery in Aruba, it was of little use to Standard Oil of New
Jersey at the time, but for the known and producing crude oil reserves in
Venezuela. Remember that Standard
Oil of New Jersey=s was present in Venezuela as the Standard Oil Company of
Venezuela. It had also purchased
Creole Petroleum. However, it had
not been very successful in discovering crude on its own.
In fact it has been very unsuccessful.
This failure was a great frustration to Mr. Teagle and this prompted
him to decide to purchase producing fields rather than try and develop fields.
The lack of success in discovering oil prompted Walter C. Teagle to
first purchase Creole Petroleum, a syndicate that had producing fields in Lake
Maracaibo. Jersey Standard
purchased Creole Petroleum Corporation on June 30, 1928 but the papers were
retroactive to April 1, 1928. At
that time Creole Petroleum had been dealing with Lago, it had made
arrangements with Lago Oil and Transport Co. Ltd., to use their facilities on
Aruba to transship their crude, so at the time of the purchase of Standard of
Indiana, there was a working relationship between Standard of New Jersey, the
new owner of Creole, and Standard of Indiana, the owners of Lago on Aruba. |
|
The
Lake Tankers, The Supply Line to the Lago Refinery |
|
The entire operation in Aruba
depended on a fleet of little tankers that carried the crude from Lake
Maracaibo, through the shallow cannel to Aruba. Now is a good time to go into a little about the lake tanker
fleet that served the Aruba refinery. |
|
The operation of the
lake tankers
(a lake tanker was a small vessel of about 6,000 tons) was critical to
the operation of the Aruba refinery and although ownership of the
tankers changed during the period they always operated to supply the
Aruba refinery until after World War II. |
|
These lake tankers must have been
well built, two of them, the Inverrosa and the
Inverruba
were reassigned to act as fuel oilers off the coast of West Africa, they
served for four years without going to dry-dock or undergoing major repairs.
Three of the lake tankers, because of their shallow draft and flat
bottoms, were converted into tank landing ships (LST’s); they were the Bachaquero,
Misoa and the Tusajera. |
|
The German High Command, realizing
the importance of the refineries in Aruba and Curaçao, sent a task force
of U-boats to disrupt the shipments of crude to these refineries. In this attack on the
night of February 16, 1942 four lake tankers, the Pedernalas, Oranjestad,
Tia Juana, and the San Nicholas, were torpedoed and three sank and
the forth, the
Pedernalas, was beached with her mid-section, (the
bridge and ships steering), destroyed.
She
was taken to the dry dock at Lago, the mid section was removed and the fore
and aft section welded together, a temporary wheel house was added at the
dry-dock in Aruba and she made it to Baltimore under her own power, where a
new amidships section was added. These
four lake tankers had a total crew of 102 and of those, 47 lost their lives. This attack put a great strain on the remainder lake tankers
to supply crude to the Aruba refinery. |
|
Before the attack the lake tankers
were not protected, after the attack operations were restricted to
daylight hours and naval destroyers escorted the tankers.
This practice lengthened the turnaround time from 2.58 days to 4 days.
The loss of the four-torpedoed tankers cut the amount of crude carried
to Aruba by 115,700 barrels per day.
This
was another contributing factor to the loss of
production at the Aruba
refinery in 1941. |
|
This loss of production prompted
the Maritime Commission to approve the construction of seven new lake
tankers under wartime conditions, using materials that were in short
supply. |
|
The contract for these seven lake
tankers was signed on April 30, 1942.
The contract was for a shallow-draft, twin-screw, steam-powered tanker
of the Boscan class. These
tankers were designed to have a capacity of 5,650 tons and a speed of about 10
knots. The contract to build these new ships was signed with the Barnes-Duluth
Shipbuilding Company of Duluth, Minnesota.
The first tanker was delivered on July 1, 1943 and the seventh tanker
was delivered on in October 1943. The
San Joaquin was delivered on August 27, 1943, the Caripito on
September 10, 1942, Temblador on September 20, 1943, San Cristobal
on September 28, 1943, Guiria on October 21, 1943, Guarico on
October 28, 1943 and Valera on November 8, 1943. The Valera was torpedoed on March 7, 1944 off the
coast of Barranquilla, Columbia while carrying a cargo of fuel oil from Aruba
to the Panama Canal. All of the
crew and officers, except for the Captain, escaped the burning, sinking ship
and were rescued. |
|
To get these new lake tankers to
Aruba they were sailed from Duluth, Minnesota, through Lake Superior,
the St. Mary's River, Soo Locks, the northern section of Lake
Huron, Mackinac Straits, the entire length of Lake Michigan to Chicago,
through the Chicago Sanitary and Ship Cannel, the Des Plaines River, the
Illinois River and into the Mississippi and down to New Orleans.
The trip had to be made in daylight hours, as there were no night
navigational aids on the rivers at the time.
It was a distance of 2,247 miles and one tanker took 28 days and the
shortest time to make the trip was 15 days. |
|
In New Orleans the tankers were
again dry-docked, defense equipment was installed, (presumably deck
guns) the wheelhouse and mast were added and the bottom was again
painted before going on to Aruba.
Because
of low bridges encountered on the trip the ships could not have a height in
excess of 53' 6". Therefore,
they left the Duluth shipyard without a wheelhouse cover, superstructure or
masts. See footnote 3 at end. |
|
Post
World War II, the Phasing Out of Lago |
|
During World War II, the channel
to Lake Maracaibo was constantly being dredged. After World War II the channel dredging was completed thus
allowing large ocean going tankers to enter the lake and receive crude.
Further crude could also be picked up at the new refinery that was
built at Amuay Bay. According to
Auke Visser, the last of the lake tankers were sold 1954.
Many were put to other uses and some were scrapped. |
|
The Amuay
refinery was opened on January 3, 1950.
This
refinery received its crude by the Ule-Amuay pipeline, which in effect
eliminated the need for small lake tankers to carry crude to Amuay.
Also, the channel to Lake Maracaibo had been dredged to allow the
passage of deeper draft tankers. The
channel between Lake Maracaibo and the Gulf of Venezuela and the Caribbean Sea
was through the Tablazo Strait. This
cannel was originally twelve feet deep and in the dry season it was ten feet
deep and full of moving sand bars.
When the Amuay refinery was completed, the channel had been dredged to
allow the passage of much larger tankers.
With the channel dredged, the small obsolete lake tankers were replaced
by four larger (32,000 dead weight tons (DWT), tankers.
These new tankers were a little more than five times as large as the
small lake tankers they replaced. These
were the Esso Amuay, Esso Caripito, Esso Maracaibo and the Esso
Caracas.
Here there seems to be a conflict between what
Auke Visser writes in the paper & what Bennett H. Wall writes in Grown
in a Changing Environment. Auke
Visser stated that the last small lake tanker was sold in 1954, while Wall
states the last small lake tanker; the Esso Mara was retired in 1960.
Whatever the case, the new larger tankers, sailing under the Venezuelan
flag with Venezuelan crews replaced the smaller lake tanker and began to bring
crude to Aruba. They would take
on a partial load in La Salina, leave the lake through the deeper channel, top
off crude at Amuay, which had been delivered by the new pipeline, and then
sail to Aruba with a full load. |
|
Lago
Oil & Transport Co. Ltd., Aruba, N.W.I.
The
Importance of 100 Octane Gasoline in Lago’s Development
|
|
&
|
|
Management & Employee Relationship & Local Education |
|
Now
back to the development of the Aruba refinery. |
|
On April 30, 1932, a contract was entered into between Standard of
Jersey and Standard of Indiana for the purchase of all foreign
properties and American tankers that had once been owned by Pan American
Petroleum As soon as Standard Oil of New Jersey purchased the refinery
from Standard of Indiana they began to expand the refinery in Aruba. The
reasoning behind expanding the refinery was primarily because Aruba was
under control of the Dutch Government and considered a much more stable
place for investment than was Venezuela. Another reason was the
location of Aruba in relationship to world markets. As
Europe was the primary market for Aruba product it is interesting to
note that Aruba is closer to Europe than is the East Coast of the United
States, thus it was cheaper to ship the product from Aruba to Europe
than from the East Coast of the United States. What is most
important, Standard of New Jersey had marketing outlets in Europe,
unlike Standard of Indiana, which had not marketing outlets in Europe. |
|
It
is also interesting to note that in Chapter 5 of New Horizons, A History of
the Standard Oil Co. (New Jersey) mention is made that the Standard Oil of
New Jersey had a commitment to develop each new oil field in Venezuela with
its own community and to provide housing and community facilities.
It goes on to say that as costly as this commitment proved to be, it
was felt that it was necessary to keep people in underdeveloped countries.
Although nothing is said about the Colony in Aruba, this theory seems
to have spilled over to Lago in Aruba because, as Standard Oil of New Jersey
expanded and development the refinery it, also expanded Lago Colony and Lago
Heights, as well as the housing that was built with loans guaranteed by Lago
for the purchased by hourly employees in Essoville. |
|
Another very
important reason for the expansion of the Aruba refinery was the development
of the high compression aircraft engine.
During the middle 30's the US Army Air Corp. as well as the British Air
Ministries were experimenting with high compression aircraft engines that
required a 100-octane gasoline to make the engines efficient.
In 1936 it was the decision of the Army Air Corp. to adopt 100 octane
gasoline for all combat planes. It
seems this decision was made before there was a means of making iso-octane in
large quantity. |
|
To produce this high (100) octane
gasoline a process had been developed by Shell Oil, used hot sulfuric
acid in a catalysis process.
This hot acid process produced a product, which was known as a
copolymer. The copolymer was then
hydrogenated and this process doubled the ios-octane yield from the refinery. |
|
At this same time the British Air
Ministries were negotiating with Standard of New Jersey to supply them
with the new 100 octane gasoline.
The negotiations for this purchase hinged on the 100 octane gasoline
being produced and supplied from a facility that was not within the
continental United States. This
was because of neutrality legislation in the US that would restrict the export
of war materials in the event of war.
The
Aruba refinery was under Dutch control and the British Air Ministry signed a
contact with Standard Oil of New Jersey with the understanding that the Avgas
facility would be built in Aruba and thus be exempt should the U. S.
impose an embargo on the export of war material, which Avgas would be
considered to be. As soon as the
contract was signed, construction was begun on the copolymer and hydrogenation
plants in Aruba. The Aruba
refinery now had the units with which to produce the 100 octane gasoline for
the British. This prewar
construction set the stage for Lago’s role as a major supplier of high
octane gasoline as well as other petroleum products to U. S. and Allied forces
during World War II. |
|
The British Air
Ministry had contracts for 100 octane gasoline from Esso and Shell, both
supplying the gasoline from their refineries in the Dutch Caribbean as well as
Standard-Vacuum Oil Company in Sumatra in the Dutch East Indies.
With Italy entering into the War on the side of Germany the
Mediterranean became closed to traffic through the Suez Cannel, so the 100
octane from Sumatra had to be shipped around the horn of Africa.
Thus, the British became even more dependent on Aruba to supply them
with 100 octane gasoline. The
Neutrality Act of 1937 also limited the sale of 100 octane gasoline on credit
to the British. Britain was in short supply of cash so this Act cut off their
supply of 100 octane gasoline from the United States.
This Neutrality act also restricted the use of tankers flying the U. S.
Flag to carry war material. For
this reason Esso Shipping transfer many of theirs tankers to Panama Transport
so it was able to transport petroleum products across the Atlanta to Britain.
Most of the ships that were transferred in 1939 had American crew.
Again American neutrality regulations forbade the employment of
American Crew on the ships of a foreign registry so when the ships were
transferred to the Panamanian flag the crews were replaced with Canadians,
Norwegian and Danes. |
|
Beginning with the Battle of
Britain in the summer of 1940, 100 octane aviation gasoline became one
of the most important factors in the defense of the island. (Britain)
That gasoline gave the British Spitfires and Hurricanes an advantage in
combat over the German Luftwaffe, with its far larger number of planes
but fuel of lower quality. Geoffrey
Lloyd, British Minister of Fuel and Power, later said;
“I think that without 100 octane we should not have won the Battle of
Britain. But we had 100
octane.” 100 Octane gasoline
was described as the super fuel that meant more speed, more power, quicker
takeoffs, longer range, & greater maneuverability that allowed the British
planes to defeat the superior German Luftwaffe. |
|
During the Battle of Britain,
between August 8 and September 3, 1940, the Luftwaffe lost 1197
aircraft. The British lost planes.
From
September 4 to the 30 the Germans lost 955 planes while the British only lost
267 planes. No longer able to
sustain the high loss of aircraft, the Germans switched to nighttime raids.
This reduced their losses but not the ration of German to British
aircraft lost and they were not as successful in causing damage to the
targets. In November of 1940 the
Germans sharply reduced their night raids on Britain. |
|
With the development of the
catalectic cracking process, which is done by a massive unite, referred
to as, The Cat Cracker,@
Lago in Aruba was selected as one of the three refineries to be fitted
with this new unit. Work on the
Cat Cracker began in 1942 and the unit went on line December 1943, with a
daily capacity of 14,000 barrels of 100/130 octane Avgas per day. |
|
In the early 40's, with the
advance of Germany into the countries of Europe, the markets of Lago’s
production shipped to Europe dried up.
Notice the large drop in production for Lago in 1940.
As the battle of Britain raged, production increased and then fell in
1942. This was due to two
factors: 1) as the U. S. entered the war, but was still not completely tooled
up for war, petroleum consumption dropped.
2) The drop in production at Lago in 1942 can also be attributed to the
loss of the four lake tankers and the shortage of crude being delivered to the
refinery. |
|
As stated
before, Standard of New Jersey and the Venezuelan Government had entered an
agreement during World War II that would require Esso to build and refine
crude in Venezuela and this agreement capped the export of crude to Aruba at
500,000 barrels per day. Both New
Horizons & Growth in a Changing Environment and Growth in a
Changing Environment, state that this agreement stopped investment in
improvements in the Aruba refinery after World War II. |
|
However Growth
in a Changing Environment contradicts itself and states that after World
War II the Aruba refinery continued to be improved,
with investments amounting to more than $60 million between 1949 &
1959 and another $64 million between 1959 & 1967.
Then between 1968 and the early 70's Standard Oil of New Jersey spent
$260 million to install fuel oil desulfurization facilities to meet U.S.
Environmental standards. It
further states that by 1975 Lago operated a complete and flexible fuel
products refinery with a capacity of 500,000 barrels a day. It consisted of crude and vacuum distillation, visbraking,
allylation, naphtha fractionation, hydrogen plants and hydrofining/go-fining
for desulphurization of naphthas, kerosene, gas oils, sulphur recovery, and a
sulphuric acid manufacturing plant. This sounds like the refinery was kept up
to date but not expanded beyond the 500,000 barrels per day production. |
|
A look at
production figures,
SEE PRODUCTION, shows the rapid grown of the Aruba refinery
and the magnitude of it size compared to other Standard Oil of New Jersey
holding in the United States, Europe or the Eastern Hemisphere.
Aruba’s Lago Oil & Transport Co. Ltd. refinery was the largest
the Jersey family from 1933 until 1950, (I have as yet not been able to find
figures on actual production by the Aruba refinery after 1950, probably
because they were fixed at 500,000 barrels per day). |
|
A little needs to be said about
Management and Labor at Lago.
It is noted in History of Standard Oil (New Jersey) New Horizons, 1927-1950
that in the late 1920's, the management of Standard Oil refineries began to
change. Before 1929 the leadership
of Jersey’s refining were men who had learned the petroleum business in the
School of Experience. In the late
1920 that began to change and in 1934 Lloyd
G. Smith, a 1913 graduate of chemical engineering from the University of
Illinois was appointed manager of the Aruba Refinery.
This was to usher in the beginning of the new college educated
management. Lloyd G. Smith was
succeeded by John J. Horigan, and then Odis
Mingus, Walter A. "Bud"
Murray, J.
M.
Ballenger,
Lee Raymond,
G. E. Golden
and R. L.
Trusty.
These were the managers up to 1975. |
|
In 1936 out of a total work force
at the Lago refinery of 2,810, about 790 were from outside the Caribbean
area. These outsiders held nine executive positions and all but two of
the 138 supervisory posts. They
also filled most of the skilled positions.
Arubans and other islanders held the remaining 2,020 unskilled positions.
This meant a veritable babble of tongues and diverse backgrounds and the
imbalance was not conductive to good morale. |
|
Opposition to the employment of so
many outsiders was first manifested in the Arubans
resentment toward workers from nearby islands. These Caribbean off islanders
held the better jobs because of language and experience.
It was because of this opposition that Lago began a program to educate
the Arubans in a company trade school. See footnote 1 at end. |
| 1. Auke Visser=s
Other Esso related Companies. |
| 2.
Mexican Petroleum, by Pan American Oil, 1922
|
| 3.Standard Oil Company (New Jersey) in
World War II by Standard Oil of New Jersey. |
| 4.History of Standard Oil, New
Horizons, 1927-1950, Chapter 13, Advancing Employee Relations |