The Caribbean Export Refining Center
Kinley, David & Salkind, Michele
INTRODUCTION Since the beginning of the century, oil has played a major role in the economies and societies of the Caribbean. Major and minor oil companies alike have come to depend on...
...Immigrant workers in particular were the hardest hit...
...Similarly, Texaco's market shifted toward the United States...
...Venezuelan government...
...This period of success was short-lived, however, as the Middle East crisis sent the major oil companies scrambling to their defences and stretched the NEPCO-Socal partnership to untenable limits...
...The so-called energy crisis of the 1970's further dramatized the Caribbean's vulnerable position vis-a-vis the oil companies and the industrialized world...
...It is mainly used in electrical generation, heavy industrial processes and commercial space heating.7 for that product...
...Middle Eastern oil could be brought to Curacao by supertankers, stored in the terminals, and then placed on smaller tankers for shipment to the United States...
...Carey's * Like many surprise takeover attempts, the Tesoro 'tender offer' for control of CORCO was chock full of illegalities and double dealings...
...For aside from scattered low-technology industries and a rapidly growing service sector, there were few other sources of employment on most of the islands...
...Through the competitive drilling of these Big Three operators, Venezuela rose to second place among the oil-exporting countries of the world, accounting for approximately 10 per cent of the world oil production...
...At the beginning of the year, the major oil companies had already initiated seasonally adjusted shortages of heating oil in the winter and gasoline in the summer which served in some cases to starve the independent distributors (i.e...
...By importing cheaply produced gasoline into the premium-priced U.S...
...Residual fuel oil, also known as number 6 or bunker fuel, is the heaviest of the products of the primary distilation processes...
...Having seen the writing on the wall, Carey was off and running to his next venture-a Bahamas heavy fuel refinery to compete with the Hess refinery in the Virgin Islands...
...By means of transfer-pricing, Hess managed to transfer the profits made at other subsidiaries to his Virgin Islands Corporation where they were barely taxed under the Islands' generous industrial incentive program...
...scrutiny...
...The cancellation of numerous oil-related projects on many of the islands has created havoc in the offices of economic planners...
...This growth strategy based on extreme dependency was widely advertised as the only feasible alternative for small island economies...
...The effect of this measure was to rearrange world markets and induce the oil companies to use their Venezuelan oil for European markets...
...government in softening the hardships imposed on the company by the energy crisis...
...With the firm establishment of oil refining in the Carib- bean, the Netherlands Antilles developed economies that were entirely dependent upon a single export item-an item these islands did not themselves possess as a natural resource...
...As long as the Caribbean regimes maintain and intensify their unswerving allegiance to foreign capital, by 1985 there will be as many Caribbean people living outside the Caribbean as inside...
...Hutton & Co., Tesoro's investment advisor, and Charles Wohlstetter, a Tesoro board member, had successfully conspired to manipulate the price of CORCO stock downward in order to aid in the takeover...
...It adds up to being an income transfer from the refiners with a natural advantage to those currently hurt by the higher OPEC prices...
...And widespread corruption among government officials enabled the smaller oil companies to gain special favors in order to compete with the majors...
...In 1967 Hess Oil and Chemical merged with Amerada Petroleum Company, forming the Amerada Hess Corporation...
...These included exemption from all property and franchise taxes, from license fees, import duties, trade and excise taxes on materials used to build, expand and run the refinery and a host of other privileges...
...But when it comes to the refining stage, the investor has a great deal more flexibility in deciding where to invest...
...The independents were getting squeezed out of the U.S...
...East coast...
...Rather, the Caribbean area offered a myriad of preferable possibilities...
...The majors, through their control of the price structure, made their profits primarily at the producing end of the oil business, and did not feel particularly threatened by new entries at the refining end...
...Although the CORCO management attempted to fight off the takeover pending adequate compensation, effective control was achieved in mid-1975 and plans to merge the two companies are now in progress...
...They became complete export refineries, able to balance the needs of the companies' international network of refineries and markets * The four other world export refining centers serving the U.S...
...Their Caribbean refineries were expanded in size to meet the fuel oil needs of the European reconstruction market...
...In September, 1973 heated negotiations over increased participation broke down between the Libyan government on the one hand and Texaco and Socal on the other...
...Independent distributors, on the other hand, gained access to this crude through marketing arrangements with the majors...
...16 By 1966, the CORCO refinery had become the core facility of an integrated petro-chemical complex...
...Where those refineries would be located was a crucial question for both the oil companies and the country-candidates of the region, eager for a taste of the benefits accruing from "black gold...
...Rather than attempt an exhaustive study of Caribbean refining operations and their fate during the 1970's, three cases of refinery development will be used to illustrate particular aspects of the phenomenon...
...Croix refinery, a 35-foot deep and 1 mile long channel had to be dredged, cutting through the coral reefs that surround the Caribbean islands and destroying the beaches' only protection from erosion...
...British and American investors alike were not enthused with the idea of plowing money into costly refining facilities in Venezuela...
...with annual sales of I billion dollars...
...The assertion of this principle was particularly blunt in the confrontation between the two BORCO partners...
...Refining remained no more than a sophisticated enclave, bringing neither wealth nor health to the economy as a whole...
...With extensive foreign marketing outlets in Europe and South America, Standard of New Jersey undertook a major expansion of its Caribbean refining facilities...
...Why this accelerated expansion...
...Moreover, Curacao was relatively close to Trinidad-Tobago, where Shell had been expecting to develop oil production ever since the publication of an encouraging Royal Commission Report in 1904...
...Since 1974, Hess has become one of the largest recipients of "entitlements," one of the strained efforts of the Federal Energy Administration to alleviate some of the disparities between large and small refiners in the United States...
...In Trinidad-Tobago, Texaco's refinery was processing crude from Texaco's joint operations in the Middle East with SOCAL (Standard Oil of California...
...1" These highly automated processing plants were run by small teams of technical personnel and made not even a dent in the island's massive unemployment problem...
...In both cases, the initial development of refining facilities was seen as a stepping-stone toward dramatic industrial expansion into other areas...
...Primary among these factors is what is politely termed "the political climate...
...market had become saturated with the influx of oil from the new wells of the major companies and in order to protect the weakening price of domestic crude, the U.S...
...CONCLUSION The developments of the last several years in the inter, national oil business have had a devastating effect upon the Caribbean islands dependent on export refining...
...Having the highest boiling point it is the last product to be processed out, following the extraction of gasoline, kerosene, heating oils etc...
...The main promoter was the Grand Bahamas Port Authority, a profit-making outfit set up by several British and American businessmen, which essentially usurped the government's power over nearly half the island...
...With higher wages the oil com- panies drew a great number of workers from the farms and plantations and came to employ virtually one-half of the islands' available work-force...
...East Coast market by under-selling competitors who lacked these extraordinary cost-saving advantages...
...At a cost of $2.5 million and no wages to pay thereafter, it was a real bargain...
...Due to new environmental protection codes in the United States, their low-sulphur Libyan crude was in growing demand on the East Coast...
...By 1974, there were eight connected facilities feeding off the core as total company assets grew to an estimated value of $750 million...
...It is estimated that at present there are half a million Caribbean immigrants living in France and Holland, over 34 million in Britain, close to 200,000 in Canada and millions more in the United States...
...Unlike the existing refineries in the region, the CORCO plant was not intended to be an export refinery alone, but divided its markets between Puerto Rico's growing internal market for a variety of oil products and the export market in the United States...
...Modernization in the refining business meant the introduction of "labor-saving" techniques, the replacement of workers by machines...
...By wheeling and dealing and using an important array of political contacts, Hess became the retailer for Shell Oil and serviced the large New Jersey utility, Public Service Electric and Gas Co., while Carey wedged himself in between a string of utilities in the New York/New England area and two major residual producers, Exxon and Socal...
...Venezuela showed serious symptoms of this as early as the 1920's, as the attempts of successive military regimes to increase state revenues from oil-for personal enrichment or to keep their extravagant bureaucracies afloat-kept dictator and oil company in continual confrontation...
...the Eastern Canada (Quebec and Maritime provinces) refining center having a relatively small capacity of 217 thousand barrels per day due to its recent development...
...By the end of the sixties, the Caribbean labor movements erupted into militant confrontation with foreign capital and the colonial authorities...
...Begining in the 1950's, generous "industrialization by invitation" schemes offered exhorbitant incentives to potential investors...
...the Italian refining center, with a net exportable capacity of 1,909 thousand barrels per day...
...Ill...
...These adjacent trans-shipment facilities were fast becoming an essential element in the oil supply situation on the East Coast of the United States, as imports were allowed to increase beyond formal quota levels during the early 1970's...
...Alongside the massive operations of the international majors, several new complexes were established by small, "independent" oil companies such as Amerada Hess, the Bahamas Oil Refining Company and the Commonwealth Oil Refining Company...
...Signs Of Rebellion In the Netherlands Antilles, oil refineries were responsible for about 80 per cent of all imports, 95 per cent of all exports, 66 per cent of industrial production, 23 per cent of the net national product, and only 8 per cent of total employment...
...By 1974, Shell Curacao was exporting 50 per cent of its refined products to the United States and only 12 per cent to Europe...
...ports could handle only small and medium-sized tankers and environmental resistance in the United States had forced postponement or cancellation of several floating terminal projects to berth the huge super-tankers...
...Standard Oil of Indiana followed its British rival's path to the Netherlands Antilles by building a giant refinery in Aruba, a sister island to Curacao under the same colonial administration...
...oil market booming, but conditions in the U.S...
...Ed Carey resides in Puerto Rico where he is exempt from U.S...
...Texaco, for example, joined Shell and Exxon * in the Caribbean refining business specifically with an eve towards the European market...
...Individual governments outdid each other in offering enticing investment schemes to foreign capitalists, including long-term subsidies and tax breaks...
...Moreover, Venezuelan crude was increasingly being refined locally at the insistence of the * In 1959 the Eisenhower administration imposed mandatory import quotas on oil in order to protect the premiumpriced U.S...
...From June 1, 1970 to June 30, 1971 the package deal saved Hess over 10 million dollars, a figure equal to 65 per cent of total income taxes collected in the Virgin Islands that year...
...The situation of growing unemployment, impoverishment and forced emigration to the United States was exacerbated during the energy "crisis" when many of the petroleum facilities in Puerto Rico temporarily shut their doors...
...And thirdly, due to the close relationship between CORCO's operations and those of large oil and chemical firms, the company was forced to accept much of the additional costs of foreign crude in order to remain competitive and to meet its contractual agreements...
...In particular, on May 30, 1969, violent rioting around Shell's plants in Curacao erupted as oil workers protested the company's use of sub-contractors who paid much lower wages and required longer working hours...
...Due to artificial shortages of fuel, the majors could justify widespread cancellation of supply agreements with independent refiners and distributors dependent on imports of Middle Eastern oil...
...refineries processed only 7 per cent...
...Tesoro, with its significant oil-producing assets in Trinidad-Tobago and elsewhere, represents the entry of a new kind of integrated operation in the Caribbean islands (see article 2 on Trinidad-Tobago...
...Standard's appetite for foreign oil was further whetted by developments on the home front...
...support of Israel and their dissatisfaction with low returns on oil...
...Thus, by the 1970's, the refineries in the Netherlands Antilles were processing 60 per cent of their products from Venezuelan crude (as compared to 80 per cent in the 1920's) and 40 per cent from the Middle East and North Africa...
...When the ship NEPCO "Courageous" docked in Libya, high officials from both Texaco and Socal were on the phone to NEPCO, threatening to take every legal action necessary to insure that the tanker being filled with their oil would never reach the Bahamas...
...The "energy crisis" of the seventies was the primary mechanism used by the majors to consolidate their hegemony and curb the ambitions of the small independents...
...refining capacity, 83 per cent of which was monopolized by the majors, 4 did not expand to meet the need for residual fuel...
...6 With such enticing advantages, the oil majors were eager to channel more and more Middle Eastern oil into their Caribbean refineries...
...In 1964, the colonial government and the Dutch masters devised a plan for "killing two birds with one stone...
...Shell eliminated two-thirds of its work-force, and Exxon three-fourths...
...NEPCO next received a strikingly similar condemnation from the U.S...
...The Caribbean was ideal for intermediate refining-located en route between the world's richest oil regions in the Middle East, North Africa and Venezuela, and the prinicpal consumer markets of Europe and the United States...
...A year later, backed by contacts in the New Jersey Democratic Party and the Department of the Interior, Hess won a gasoline import quota of 15,000 barrels per day...
...By the second decade of the twentieth century, the corporate giants of the oil industry were engaged in the frantic race for access to the world's known petroleum reserves...
...With excess balancing capacities of 10 to 20 per cent, the Caribbean refineries could compensate for reduced production at other facilities due to technical breakdowns, strikes, transport problems, political obstacles or sudden shifts in demand for oil products...
...The consequent plunge in CORCO profits in 1974 and the sharp drop in the market price of its stock made the company an easy target for interests who were willing to speculate on the future prospects of the huge integrated complex...
...import quotas, which allowed the island to expand its quota with the growth of internal demand, Puerto Rico was becoming a favored location for U.S...
...5 Dutch Treat for the Oil Companies From the point of view of any major corporation, making an investment decision implies considering a wide variety of factors...
...It was therefore exempted from both the U.S...
...Although the colonial government of the Netherlands Antilles prospered from the original establishment of refiner- ies, thereafter the oil industry's contribution to public revenues decreased...
...Firstly, the availability of different grades of crude, of varying compositions, enabled the majors to make a range of different products and thereby enhance the versatility of their balancing operations in the Caribbean...
...Since European economic recovery was financed by the United States through the Marshall Plan, American oil companies were able to win most of the oil supply contracts and secure large marketing positions...
...Company profits were virtually untouched by taxes as the bill stipulated that Hess would have to pay only 25% of his income taxes...
...8 When OPEC raised the posted prices of crude, however, the renegotiation of CORCO's supply contract with Algeria wiped out the advantage of having a direct contract with a producing country...
...When these audacious newcomers to the Caribbean tried to go still further, however, by venturing into petrochemicals and large-scale trans-shipment, the majors ques- tioned their "laissez-faire" attitudes...
...With the energy crisis, however, Carey was forced to scrap the grandiose plans for his Caribbean operations...
...import quotas of 1959...
...For the major oil companies with refining operations in the Caribbean, Middle Eastern and North African countries, oil became increasingly important...
...Libya soon sent a message to NEPCO and Socal, informing them that the government had assumed 51 per cent control of the Socal and Texaco operating companies in Libya and that until these new terms were accepted the companies' supplies13 of crude would be cut off...
...Secondly, the fall-off in demand for imports of petroleum and petrochemical products in the United States and other industrial countries had a particularly strong impact on the Puerto Rican economy, causing CORCO's plants and transport facilities to operate at severely reduced levels...
...As a result of 1959 U.S...
...As a Dutch colony relatively untouched by modern industry and suffering from a declining trade economy, the islands' colonial government was only too delighted to welcome the oil giants to its shores...
...New competitive pressures on the major oil companies by new comers to the region had led to a tendency to over-produce the9 Middle Eastern and North African concessions...
...One of the principles that the majors sought to forcibly drive home during the energy "crisis" was that the small independent refiners had no basis for trying to deal directly with the oil-producing countries...
...In short, the Caribbean afforded the oil companies a degree of flexibility that was essential to the perpetuation of their power in an era of changing conditions in oil...
...I _ _ 44 by producing a full range of petroleum products for any market in the world...
...By the early thirties, the U.S...
...from Federal Energy Administration's "Trends in Refinery Capacity and Utiliza- tion" June, 1975) M1E...
...and S.E.C...
...A third major oil company, Texaco, entered the scene as well, buying out a British-controlled refinery in Trinidad-Tobago and expanding it to rank in size with its Caribbean "sisters...
...market are the following: the Middle Eastern refining center, comprising Saudi Arabia, Iraq, Iran, and the small Arab states encompassed by that group, with a 1975 net exportable capacity of 1,786 thousand barrels per day...
...CONSOLIDATION AND EXPANSION In the post World War II period, the Caribbean refineries underwent a rapid process of expansion...
...But with the steady decline in Venezuelan crude production during the 1960's and the relaxing of quotas in 1971-73, Middle Eastern oil became important for the American market as well...
...The British company's control over sources close to the various world markets allowed it to maintain a competitive edge over Standard and to push Standard out into the world in search of new crude supplies...
...The majors were obliged to swallow the bitter pill of participation agreements and signed the Teheran and Tripoli agreements of 1971 and 1972, respectively...
...The first project began in February of * In 1950 Shell and Exxon built huge export refineries at Punta Cardon and Amuay, Venezula, complying with the 1943 Hydrocarbon Law, now being insisted upon, that stated that at least 10-15% of Venezuelan oil must be refined locally.8 United States Crude Oil and Refined Products Imports from the Caribbean Area 1974* (000) barrels Total Crude Total Refined Motor Distillate Residual Imports Oil Products Gas Fuel Oil Fuel Oil Other Total U.S...
...Venezuela) 2,372 382 1,990 133 199 1,369 289 Percentage of Total 39% 11% 76% 65% 71% 87% 52% *Figures for 1974 represented a decline in total U.S...
...As a complement to the refineries, BORCO pioneered the first super-port to serve the U.S...
...9 The story behind the rise of Hess and Carey to the big leagues of the oil business highlights the changing relationship of "accomodation" between majors and minors from the late forties to the seventies...
...refining business made the Caribbean Export Refining Center especially suited to the particular product needs of the American market...
...What made the pill so hard to swallow was the realization that the biggest profits were no longer to be made at the producing end, since they now had to be shared with producing countries, but rather at the refining and marketing ends...
...For in the words of Shell's private historian, C. Gerretson, "the political climate was-let us say-Latin American...
...A major market for Venezuela was rapidly developing in Europe, where American oil had previously held sway...
...Shifting Sources A second major change in the post-war period concerned the preferred sources of crude oil...
...The construction financing came entirely from outside the United States with Socal serving as guarantor for almost all of these loans...
...When it was all over, Premier de Kroon of the Netherlands Antilles was forced to resign and 70 per cent of the islands' resorts and businesses lay in ruins...
...The oil companies did not have far to look for greener pastures to blacken with the smoke of refineries...
...Hess was able to set up shop in the Virgin Islands, while Carey created CORCO in Puerto Rico and BORCO in the Bahamas...
...Shell Oil quickly set its sights on Curacao...
...In 1966, Hess set up a 70,000 barrel-per-day refinery...
...In the 1950's, the rise in electricity production in the United States, powered by residual fuel oil,* generated a tremendous growth in demand * Exxon is the currently used name of Standard Oil Company of New Jersey (Esso...
...Toward the mid-1960's, European refining capacity, predominantly controlled by American companies, began catching up with demand and exports from the Caribbean declined drastically...
...Both these entrepreneurial "wizards" entered the business through the back door of residual fuel oil, a risky, low-profit market shunned by the majors in the post-war period...
...Socal and Texaco had tried unsuccessfully to capture some of Carey's big customers...
...When Hess constructed a port with berthing facilities for its tankers alongside its St...
...For the major oil companies, the embargo produced just the sort of shortage they needed to justify their assault on the small independents and recoup their monopoly at the refining and marketing end of oil production...
...Because of the overwhelming power of the oil cartel, the newcomers ultimately secured positions only by accomodating themselves to the needs of the oil giants...
...This has led the island governments to offer ever-more generous incentives to foreign investors and, at the same time, to make more concerted efforts toward forcing the enormous costs of these economic setbacks on to the working people of the islands...
...20 NEPCO's contracts with the major public utilities were especially coveted by Socal and Texaco...
...Ed Carey had been dreaming of building an export refining complex in the Bahamas since the mid-sixties, but problems in raising the necessary capital and conflicts over whether CORCO would have part ownership in it delayed the project until 1970...
...There is evidence that both E.F...
...colonies of the Virgin Islands and Puerto Rico, where puppet governments greeted foreign investors with open arms and on any terms...
...Furthermore, it would add up to one dollar per share to the company's 1967 earnings...
...Amerada Hess was one of the few independents to weather the storm of the seventies and come out smelling like a rose...
...Firstly, crude oil domestically produced in the United States was, for the first time, cheaper than foreign imports...
...East Coast as customers...
...Clearly the "energy crisis" of 1973 brought other benefits to the majors as well...
...In the Nether- lands Antilles, that decision led to the severe curtailment of refining operations...
...The oil companies' need for flexibility in dealing with the political and economic challenges of the petroleum world dictated a distinct form of industrial organization, one which geographically separates the different phases of oil production...
...In the post-war period, the major oil companies moved to consolidate their already hegemonic position in the oil industry by rationalizing the structure of their world-wide operations...
...With an over-abundance of oil on their hands, the majors turned to these smaller companies who had aggressively developed new markets...
...And when the oil business got really sticky in the 1970's, with the rising nationalism of producer countries and the strengthening of OPEC, the scene was set for a major clash between majors and minors...
...With the refinery virtually inactive, Carey's debts began to catch up to him and he turned to the F.E.A...
...crude...
...In 1965, the Island Congress passed a special bill which granted Hess an enticing set of incentives for a period of 16 years...
...The strongest rivalry to develop in this period was between the British oil giant, Royal Dutch/Shell, and the U.S.-giant, Standard Oil...
...The implications of the changes in the petroleum industry world-wide caught up with CORCO in the second half of 1974, when a combination of factors drastically turned the company's bold plans for expansion into a battle for corporate survival...
...With good contacts in the mainland party, Hess gained the favor of Democratic Governor Ralph Paeiwonsky of the Virgin Islands and the wheels of fortune began to turn...
...Several independents were so threatened by losses that they were forced to accept loss of control over their investments or even takeover by other firms...
...In 196.1, Shell and Exxon were gratified by a new treaty between the Netherlands Antilles and the European Economic Community (EEC), whereby the refined oil products of Curacao and Aruba could be imported duty free into the member nations of the Common Market...
...The program was stepped up thereafter, and between April and September of 1965, the government boasted of having placed 800 Antilleans with jobs in Holland...
...In October, 1973 the Arab oil-producing countries proclaimed an oil embargo linking their discontent with U.S...
...The result was BORCO-Bahamas Oil Refining Company-with 65 per cent ownership by NEPCO and 35 per cent ownership by Socal...
...1 In addition to providing the company with the bulk of its residual fuel oil supplies, the Hess refinery in the Virgin Islands was particularly useful as a mechanism to raise total company profits world-wide through complicated accounting procedures...
...market from cheap imports...
...The colonial relationship also provided the islands with a liberal trade status vis-a-vis their "mother" countries, and gave the oil companies greater access to European and American markets...
...The Shell and Standard facilities in the Netherlands Antilles were expanded to become the world's largest refineries and modernized to become the world's most efficient...
...Thus, while Caribbean refineries dedicated up to 60 per cent of a barrel to residual fuel, the U.S...
...Even then, Carey was able to pull it off only by literally mortgaging his future to the giant Standard Oil Company of California (Socal...
...CASE STUDIES THE VIRGIN ISLANDS REFINING CENTER After World War II, the promotion of foreign investment became a full-time activity for the colonial and newly independent nations of the Caribbean...
...Carey Energy Corporation, a holding company for an aglomeration of more than 50 separate corporations, has diversified activities in recent years into oil production in Abu Dhabi, exploration in the North Sea and Wyoming and tanker transportation...
...refiners with access to large quantities of domestic crude had a distinct competitive advantage over Caribbean refiners dependent on Middle Eastern and other imports...
...The sagas of CORCO in Puerto Rico and BORCO in Freeport, both with Edward Carey as a major protagonist, illustrate two directions of post-war expansion of oil activities in the Caribbean...
...Major and minor oil companies alike have come to depend on this string of small islands to process petroleum from all over the world and ship it out to widespread markets...
...The European boom, however, proved to be only temporary for the Caribbean refiners...
...CORCO was programmed to become a large petrochemical complex and BORCO a massive trans-shipment and export refining center...
...The explanation is simple: Residual fuel oil had traditionally been maintained as a low-priced, low-profit item in order to make it competitive with cheap fuels such as natural gas and coal...
...Curacao, in particular, had a natural deepwater port...
...income taxes...
...All told it was enough to convince the oil companies not to locate their refining and production facilities side-by-side...
...the Singapore refining center with a capacity of 879 thousand barrels per day...
...CORCO had grandiose plans for the 1970's, carefully coordinated with those of the Puerto Rican Economic Development Administration, including the construction of a massive super-port with trans-shipment facilities, new refineries and a whole new wave of heavy industrial projects such as steel, smelting and ship-building...
...Having captured the largest petrochemical complex in Puerto Rico and with sufficient financial backing to ride out the current recession, Tesoro promises to be a significant force in the future expansion of the Caribbean Export Refining Center...
...NEPCO and SOCAL reacted in opposite manners to this new situation, not befitting their relationship as business partners...
...A relatively new face on the Caribbean sceneTesoro Petroleum Company-saw great opportunities in the12 misfortunes of CORCO and moved in to take working control of the company in the early part of 1975...
...The 1925 strike in Venezuela's coastal oil fields, the unionization of petroleum workers in the 1930's and the general strike of 1936 reassured the oil executives that their decision to separate refining and production had been a wise one...
...Shell was also confident that it would attract Panama Canal shipping to its bunkering facilities at Curacao, even though it was not on the international shipping route to the Canal...
...The independents, who had managed to secure positions at the refining and retail end of the oil business, were the first casualties of changing conditions in the seventies...
...Not surprisingly, he resigned from the Tesoro board just one day prior to the tender offer to purchase Corco shares to avoid the obvious conflict of interest charges...
...Amerada Hess has received subsidies to the tune of $185 million " annually which has allowed it to substantially undercut the sales of other independents in the U.S...
...In 1974, Shell completed construction of the Curacao Oil Terminal, with a capacity of 800,000 barrels per day...
...Secondly, the over-all impact ,of the 1974-1975 recession was to depress still further the market for imported oil and oil-products...
...The establishment of highly capital-intensive refining facilities on these small islands brought only increased unemployment in the post-war period and a heightened exodus of workers to urban centers in Europe and the United States...
...for relief...
...With the transition from colonial rule to formal political independence, a series of unstable and corrupt governments took power in the islands and treated foreign capital with equally kind hands...
...Two examples of independent companies who started out as distributors and ended up as fully integrated oil companies will illustrate the process under consideration...
...Middle Eastern oil offered two major advantages to oil companies in the Caribbean...
...Through a close personal relationship with one of the master-minds of Bootstrap, Teodoro Moscoso, Carey was able to guide the expansion of CORCO in close coordination with the broader industrial plans of the colonial government...
...Secondly, greater profits could be made on the sale of Middle Eastern oil, primarily due to the arbitrary relationship between its price and cost of production...
...Shifting Markets The aftermath of the Second World War brought rapid economic reconstruction to Europe and unrivaled economic prosperity to the United States...
...The refinery was expanded in 1973 to a capactiy of 500,000 barrels per day and again, in 1974, to include oil desulpherization facilities...
...By the end of 1931, more than two- thirds of the 9,000 employees at Shell's Curacao refinery had been laid off...
...oil companies in the Caribbean, the "package deal" worked out by Leon Hess in the Virgin Islands was an investor's dream...
...Sky-rocketing fuel prices, for example, enabled them to amass the necessary capital for huge investments in developing new sources of energy...
...The Authority used its power to promote the growth of legalized gambling run by organized crime in the United States and to attract various financial and industrial operations to the free zone at Freeport...
...And why had these small independents chosen Caribbean island locations to process oil for their U.S...
...Hoping to generate more jobs and revenue by inviting the multinationalis to industrialize their islands, the Caribbean governments nurtured an extreme dependency on foreign capital that solved iieither employment nor financial problems of the region...
...Between 1952 and 1967, personnel at both the Curacao and Aruba refineries was reduced drastically...
...As a U.S...
...The after-effects left NEPCO begging for federal subsidies to stay alive...
...By 1929, the refinery could process 140,000 barrels per day, a very large capacity at the time...
...The East Coast of the United States, on the other hand, remained a steady customer throughout the decades following the war...
...Socal produced and transported the crude to the Bahamas where it was purchased and processed by Borco for distribution by NEPCO in the United States...
...It was now conceivable to the oil giants that other sources of energy would take oil's predominant place in the profit making schemes of the corporations...
...BORCO The Bahamas was yet another ideal field for investment...
...Department of State which added that NEPCO's actions would have negative repercussions throughout the Middle East...
...party politics and Democratic Party politics conveniently prevailed at the time of Hess' entry...
...This last statistic tells much of the story...
...Amerada Hess * had 3.8 billion dollars in sales in 1974...
...Moreover, competition between the island nations for foreign investment was fostered by the shrewd multinationals and left the Caribbean fragmented before the mighty power of foreign capital...
...It limited crude oil imports to 12.2% of domestic demand for oil...
...Upstarts in the Industry In the boom years of the 1950's, small independent companies successfully established themselves in one phase or another of the oil industry by gaining direct or indirect access to Middle Eastern and North African oil...
...By means of the "Persian Gulf pricing principle," Middle Eastern oil prices were equated with the price of U.S...
...British-American rivalry was in large part responsible for the rapid development of Venezuela as a major oil-producing nation...
...In 1956, the American company bought out I rnida Oil m a deal that included both a refinery and the ex-owner's extensive marketing network in Europe...
...The refinery was completed in 1970 with a capacity of 250,000 barrels per day, and specializing in the production of heavy fuel oil and lesser quantities of jet fuels, diesel and petrochemical feedstocks...
...Despite this impressive technology, the modernization of the oil industry in the Caribbean islands did not carry over into the societies at large...
...environmental regulations, etc...
...Consequently, many of Carey's faithful customers have cut back on their contracts or switched to other suppliers...
...s By the early 1970's, Exxon had built the world's first electronic refinery command center in Aruba...
...From Curacao, Shell could then ship its refined products to its European markets...
...oil companies to use U.S...
...The major effect of dissolution was to deprive some of these newly created companies of crude oil which had formerly been supplied by their "siblings...
...In the first half of the century, the oil companies became the chief employers of Curacao and Aruba and were responsi- ble for the general rise in the standard of living of large portions of the population...
...Within a year, the refinery runs had advanced by 39 per cent and approximately two-thirds of its products were destined for the European market...
...Unlike the crude-rich United States, the British had no oil of their own and had always been obliged to secure supplies from foreign sources: the Middle East, Asia and Latin America...
...The giant oil companies were particularly attracted to the "smallness" of the Caribbean islands...
...Soon after, Exxon followed suit with similar facilities in Aruba...
...With the hegemony of a predominantly American oil cartel established by the end of World War II, inter- mediate refineries developed additional duties...
...The major U.S...
...The development of the Caribbean Export Refining Center is linked to the historical development of the oil industry on a world scale...
...Workers from other Caribbean islands, Surinam and even Portugal flowed into the islands in search of employment, eventually outnumbering domestic laborers...
...market by the more effective competition of the majors and were increasingly plagued by a lack of sufficient financing...
...The islands' own lack of substantial oil reserves could only be a plus in their favor, since it lessened the possibility of their reproducing the nationalist demands of the oil-possessing nations...
...CORCO was lost altogether, to a new independent operator, Tesoro Petroleum Co...
...A major turning point came in 1948, when for the first time the United States became a net importer of petroleum...
...In particular, intermediate refining centers, linking the oil producing regions to major markets, 3 became a permanent industrial unit of the modem oil industry...
...But due to a ruling that the BORCO operation had only limited eligibility for entitlement subsidies and given the ability of Amerada Hess and the majors to undersell NEPCO by as much as three dollars a barrel, the refinery has been operating at only about one half capacity for quite some time...
...The 1920 Jones Act, which required all U.S...
...colony, Puerto Rico offered many incentives for companies interested in developing the production of petroleum by-products...
...Prior to 1932, the United States had supplied 27 per cent of Europe's petroleum needs while Venezuela supplied only 14 per cent...
...import tariffs of 1932 and the 1959 import quotas...
...wholly-owned New England Petroleum Company (NEPCO) was by then the largest independent distributor of residual fuels to industries and utilities on the East Coast of the United States...
...According to these new arrangements, the price of oil was raised and the majors agreed to pay a uniform 55 per cent tax rate and transfer an initial 25 per cent ownership interest in the concession to all participating countries...
...With the further integration of oil companies into petrochemical complexes and trans-shipment centers, the intermediate export refining facilities provided a logical base for such operations...
...Moreover, the much awaited spin-off industries that would employ more labor in production were not being attracted to Puerto Rico...
...The Puerto Rican case has already reached this point...
...Initially, the small companies' move into refining went unheeded by the major oil companies...
...True to Carey's form, one of CORCO's first big customers was the island's largest electric utility...
...BORCO entered a period of dissonance with its business partners, challenging Carey's extensive plans for the Bahamas...
...market (primarily BORCO...
...colony, the Virgin Islands is a playground for U.S...
...BORCO's operations went very smoothly for the first three years...
...Similarly, Edward Carey, brother of the present Governor of New York, expanded his family's industrial oil and chemical distributing company into an integrated group of operations involved in almost every phase of oil activity...
...The Netherlands Antilles assumed a primary role in distributing that oil...
...While special privileges were the norm for U.S...
...By frequently reminding the colonial authorities "where Curacao and Aruba would be" if the oil industry were suddenly to pack up and leave, the oil companies benefitted from innumerable and far-reaching tax incentives...
...When they proceeded to expand their markets and vertically integrate their operations, however, the newcomers were headed for serious trouble with the majors...
...imports over 1973 levels due to the Arab oil embargo and higher oil prices...
...What was the precise nature of the relationship between newcomers and old-timers in the refining business...
...The Caribbean Export Refining Center, the collective term for the islands' refining facilities, is today one of five such centers in the world...
...that year when a small group of workers from Curacao were selected to migrate to Holland, at the government's expense...
...9 During the latter half of the 1960's, the Bahamas attracted more than $750 million in new direct investment while promoting itself as a taxhaven for corporations and individuals who were too rich to pay taxes...
...As unemployment continued to rise and the colonial government continued to insist on "growth" based on foreign investment, an escape valve was urgently sought...
...In addition, the oil companies were attracted to the political situation in the Caribbean islands, namely their colonial status...
...We hope to give a picture of the developments that led a recent visitor to St...
...How were these newcomers able to set up their own intermediate refining facilities...
...In order to transport this oil to Europe, Socal pulled its tankers from their Bahamas route-leaving NEPCO high and dry without any oil to feed the BORCO refinery...
...Interior Department officials that the economic welfare of Puerto Rico would be enhanced by allowing additional oil imports from Venezuela and additional product exports to the United States, thus facilitating the growth of refining and "downstream" petroleum plants...
...income taxes, free from the bother of pollution control and free to ship products duty-free into the United States...
...During the boom years of the 1950's, the independents started out as either small producers or distributors of oil, dependent on the majors for sources of crude, refining, storage or transport facilities...
...As an extra bonus, Curacao and Aruba were endowed with excellent harbors, not only for the trans-shipment of Venezuelan oil but for international and naval shipping as well...
...Potential conflict was evident in another arena as well, as Venezuelan oil workers became increasingly radicalized in their economic and political demands...
...Middle Eastern oil had previously been reserved for the European market, due to the U.S...
...Socal eventually recognized the need to work with Carey and saw the refining venture in the Bahamas as a way to deepen their relationship...
...In 1971, CORCO attempted to overcome this problem by signing an unprecedented 25-year contract (worth $8 billion) with the Algerian National Oil Company, SONATRACH...
...In 1911, the Standard Oil Company, with its 38 subsidiaries, was broken up as the result of trust-busting agitation...
...Hess fared exceptionally well throughout the 1970's, in contrast to the other independents during the energy "crisis...
...The expanded employment opportunities along with the hopes and illusions created by the arrival of the oil giants, were quickly dissipated by the events of the 1930's-the first warning of things to come...
...Nick & Co., the New York Stock Exchange specialist on CORCO stock...
...His customers included Con Edison of New York, Public Service of New Jersey, New England Gas and Electric, Long Island Lighting Company (LILCO), Philadelphia Electric Company and others...
...Suddenly the world's attention became focused on the tiny islands of Curacao and TrinidadTobago as oil workers and masses of the unemployed took to the streets in 1969 and 1970 respectively...
...The Tariff of 1932 would soon make it highly unprofitable to use the company's Venezuelan oil to supply domestic markets, and Standard of Indiana looked longingly toward the European market...
...In the case of Venezuelan oil, there was nothing to dictate that the oil companies had to build their refineries alongside their oil wells...
...By encouraging emigration from the islands to the "mother country," they could both ameliorate the unemployment problem at home and also provide the Netherlands with a cheap supply of labor...
...They established export refineries in the Dutch colony of the Netherlands Antilles and the U.S...
...Moreover, in 1965, Carey was instrumental in convincing U.S...
...Moreover, the newcomers were more willing than the majors to enter the less profitable and high-risk markets...
...From 1966 to 1971, the subsidy amounted to $30 million...
...THE RISE OF THE INDEPENDENTS The expansion of refining activities in the Caribbean, during the 1950's and '60's, was accompanied by a new pattern of investment in the area as well...
...Under the Crude Oil Entitlements Program, an amendment to the 1973 Emergency Petroleum Allocation Act, " the government has tried to close the differential between high-cost foreign crudes and lower price-fixed do- mestic crudes by awarding entitlements to the high-cost refiners and forcing the others to purchase these entitlement certificates in order to process their own crude...
...As a U.S...
...Only 50 miles from the Florida coastline, it offered a generous industrial incentives program and was governed by a totally corrupt white minority regime...
...2 The Caribbean islands were a convenient solution to fears of oil spills spoiling the mainland's shores...
...government imposed a tariff on imported crude in 1932...
...The energy "crisis," manufactured in the interests of the big oil companies, brought the whole house of cards tumbling down...
...In the 1930's, the oil companies constructed ethnic migrant camps physically separating the nationalities and hindering the development of worker organizations...
...The value of Hess' savings on the Virgin Islands deal was astounding...
...The company's expansion included the production of aromatics and other feedstocks, and a series of joint venture satellite plants with Hercules Chemical, Pittsburgh Plateglass and Shell Oil...
...Like other large oil corporations, they changed their name once they expanded into other industries and particularly into other energy sources...
...service stations) out of existence and in others, to drastically reduce their share of the market...
...The following article will recount the story of oil in the Caribbean, from the early years of refinery-building to the more recent past of petrochemicals and super-ports...
...Caribbean refiners were particularly hard hit by the events of the seventies...
...In 1966, the remaining quota restrictions on residual fuel oil were lifted and the two entrepreneurs separately sought Caribbean locations for refineries...
...2 As Venezuela's star continued to rise over the oil-hungry countries of the world, facilities for refining all that oil had to be built and expanded...
...Two10 factors explain the particular vulnerability of the Caribbean independents...
...Through an overwhelming advance in efficiency and versatility, the Caribbean gained the capacity to balance the particular needs of the corporations' network of refineries on a world scale...
...In short, these privileges were worth millions of dollars to Hess' operations and enabled the company to capture a major chunk of the U.S...
...Amerada was a successful independent producing com- pany with 101,000 barrels per day of oil in North America and 197,000 barrels per day in Libya...
...The rioting spread throughout the city of Williamsted where masses of people quickly correlated the particular problems of the oilworkers with the general problems of their colonial society dominated by foreign capital...
...oil (Gulf of Mexico price), while the actual costs of production for Middle Eastern oil were far lower...
...A major point of vulnerability was CORCO's lack of direct access to crude and its dependence on the majors for basic raw materials...
...Meanwhile, as the success of the company's operations continues, Hess proceeds in its destruction of the Caribbean environment and of the islands' main source of income: tourism...
...While these corporations were relatively obscure in international oil circles, they developed refining facilities in the Bahamas, Virgin Islands and Puerto Rico that rivalled the Big Three refineries in both size and economic impact...
...As the role of the Caribbean refineries expanded beyond the regional framework, they were transformed into the world's first "complete" refineries, with every possible facility for processing every possible product...
...By the 1970's, the Netherlands Antilles and Trinidadian refineries had installed catalytic cracking units to produce high quality petroleum, distillation units to produce the full range of fuel oils, desulferization facilities to produce low sulphur fuel oil to meet U.S...
...One dramatic measure of the overall costs of such misdirected strategies for development is the draining of the islands' most valuable natural resource, the native people...
...The Caribbean refineries, ideally located between the richest oil-producing regions and the main consuming areas of the world, took on added importance as the major sources and markets for oil shifted in accordance with a new world order...
...After the tariff went into effect, the United States and Venezuela supplied 18 and 21 per cent respectively...
...market by building three jetty-terminals and massive storage facilities capable of handling the supertankers transporting oil from the Middle East and North Africa...
...Beginning with a small coal and oil distributing business in the 1920's, Leon Hess built the Hess Oil and Chemical Company into a vertically integrated oil company by the late 1960's...
...Standard was faced with an acute need to diversify its markets, which were predominantly concentrated in the United States...
...Similarly, many of his subsidiaries have foreign registry and thus evade I.R.S...
...market, the Wall Street Journal estimated that the Hess quota was worth one dollar of additional profit per barrel of residual fuel...
...Moreover, the government ended up spending considerable sums on infrastructural projects, such as port facilities, for the use of the oil companies...
...With control of enormous amounts of capital, often larger than the islands' total revenues, the international oil companies enjoyed an uninhibited range of action to organize production according to their own profit-maximizing goals and not to local development needs...
...Moreover, Shell, Exxon and Texaco had vast Middle Eastern and North African reserves of low sulphur content which could be mixed with the heavier, more sulphurous Venezuelan oil in order to meet the environmental regulations of the U.S...
...Excellent prospects were offered by the Netherlands Antilles, only a stone's throw (90 miles) from the oilfields around Venezuela's Lake Maracaibo...
...Experience had taught them that "black gold" has a curious way of encouraging various forms of nationalism, as oil-producing countries hunger for a greater cut of the pie...
...CORCO in Puerto Rico Ed Carey was the first "independent" oil operator to take advantage of the economic incentives in the Caribbean when he launched CORCO (Commonwealth Oil Refining Company) in 1953, during the heydey of Operation Bootstrap...
...Croix, Virgin Islands to exclaim, "My god, it looks just like Jersey!'" I. THE RACE IS ON In the early history of the oil industry, competition among the major oil companies centered on the capture of overseas markets...
...In 1960, for example, it cost 16 cents per barrel to produce Middle Eastern crude, as compared to 51 cents per barrel for Venezuelan oil and $1.73 for a barrel of U.S...
...The Caribbean islands themselves possess insignificant amounts of crude oil reserves, yet they processed over 2.7 million barrels a day in 1975...
...The growth of oil-powered electrical utilities and the shift of many industries from coal to residual fuel, created the space for efficient operators to act as middlemen between the big oil companies and the industrial clientele...
...During the 1950's and '60's, Grand Bahamas Island, and particularly Freeport, was transformed into a haven for tourists, racketeers and multinational corporations...
...Small producing companies were able to obtain exploration and production rights by offering better deals than the majors to the governments of the region...
...chemical companies, whose facilities would be totally exempt from U.S...
...Oil prices were plummeting and the Big Three oil producers in Venezuela entered into formal agreements to restrict output by 15 per cent...
...Rather than simply taking full control of the BORCO refinery, Socal has chosen to prop up Carey by extending him further loans thus avoiding the bad publicity which would result...
...However, U.S...
...Between 1924 and 1938 Curacao's imports of Venezuela crude increased from I million per year to over 11 million barrels...
...Our main concern here, how- ever, is to illustrate how the "crisis" forced the majors to more aggressively consolidate their position in the refining and marketing phases of the oil industry at the expense of the small independents...
...Between 1950 and 1970, energy consumption in Western Europe more than doubled, while Europe's refining capacity lagged far behind demand for most of that period...
...By moving directly into crude oil production, refining and transportation, the independents began to challenge the majors' ability to control the flow of crude into the market-place, control prices, and dominate the biggest markets...
...These were not small fries-they supplied some 20 million people with electricity...
...The expansion of petroleum consumption worldwide, as well as the diversification of uses for petroleum by-products in the United States, enabled these small distributors to gain a foothold in new markets without entering into direct competition with the majors...
...As export economies based on imported crude, the islands were particularly vulnerable to domination by the inter- national oil companies and highly sensitive to the ups and downs of the world oil industry...
...The Virgin Islands offered an additional advantage worth several more millions...
...flag tankers in domestic trade, exempted the Virgin Islands from its provisions...
...markets...
...In both situations, the demand for energy sources soared...
...The first decade of CORCO's growth was gradual as its refining capacity expanded from 23,000 barrels per day to 115,000...
...So, in 1917, after only five years of operation in Venezuela, Shell decided to build an export refinery in Curacao, with a capacity to accomodate 80 per cent of the company's Venezuelan crude...
...By the 1970's, the major oil producing countries had established state-owned oil companies and were demanding greater participation in and control over their domestic oil industries...
...Not only was the U.S...
...By 1919, all of the known oilfields outside the United States were controlled by British capital and a good portion of that was in the hands of Royal Dutch/Shell...
...NEPCO, in turn, contracted to buy crude directly from the Libyan National Oil Company and sent one of its own tankers to retrieve it...
...By 1938, it began an ambitious program of capital investment in its Aruba refining operation to the tune of 22 million dollars...
...The major oil companies began to rely on their international facilities and reserves rather than domestic supplies to feed the thriving American market...
...In addition, these dredging operations produced a silting of the water within an I -mile radius of Hess' operations, cutting off light from plant-life on which coral feeds and eliminating11 future anti-eroding forces...
...Socal, on the one hand, began countering the loss of its Libyan output by stepping up production in its Saudi Arabian fields...
...When his efforts failed, he found a way of using his power in one area of the oil business to bargain for financial support in another...
...In fact, Hess and Carey virtually forced the majors to use them as middlemen by capturing the biggest utilities on the U.S...
...Automation, however, was the straw that broke the camel's back in the Caribbean, marking a critical turning point in the history of the islands' labor movements...
...With the added "blessing" of natural deepwater ports, the Caribbean offered the oil tankers a natural stepping stone from oilwell to market...
...In particular, Standard Oil of New Jersey, New York and Indiana inherited massive market networks in the United States, but found themselves in critically short supply of crude...
...As early as the turn of the century, British capital had begun to purchase concessions there, while the Americans, Standard Oil of Indiana and Gulf Oil arrived only after World War 1. But by 1929, Standard and Gulf together accounted for 54.8 per cent of total oil production in Venezuela, while Shell retained a 45 per cent share...
...When it comes to oil drilling, companies are obliged to go where the oil is, and do their best to "overcome" any unpleasant political circumstances...
...These operations were held under common control by Carey's personal holding company, the Carey Energy Co...
...Participation was scheduled to increase to 51 per cent by 1983...
...Without going into an in-depth analysis of the structural changes affecting the international oil industry at this time, a subject which is beyond the scope of this Report, we hope to allude to the most important and obvious developments which contributed to the newcomers' big move into Caribbean refining...
...s Caribbean exports, particularly to the East Coast of the United States, increased steadily...
...Of course, Hess has also poured tons of pollutants into the air that not even the trade winds could blow away, turning the blue Caribbean skies into shades of chemical gray...
...From serving as intermediate refineries serving the regional goals of the oil companies, the Caribbean refineries were transformed into more sophisticated "balancing" operations serving the global needs of the industry...
...Imports 6,088 3,477 2,611 204 281 1,572 554 Total from Island Refineries 1,392 63 1,329 122 155 872 180 Percentage of Total 23% 2% 51% 60% 55% 55% 33% Total Caribbean (Incl...
...The example of Hess' Virgin Islands corporation is a success story of wheeling and dealing, exemptions galore and, finally, the helpful hand of the U.S...
...Unlike Amerada Hess and CORCO, which had brought in new investment funds by becoming public corporations, Carey sought to raise the 100 million dollars in loan capital for the Bahamas project on his own...
...The second wave of unemployment in the islands would come in the 1950's-and that time it would be permanent.6 II...
...The price for the Caribbean Export Refining Center continues to be paid by the Caribbean people, forced to endlessly migrate from island to island in search of employment, or to flee the area entirely...
...Intermediate refineries enabled the oil companies to pivot between global sources of crude and expanding markets...
...Hess could therefore save anywhere from 5-40 cents per barrel of oil by using foreign flag ships for transport...
...It proved to be an unbalanced battle which raged throughout the sixties and settled down in the seventies to a reassertion of the majors' monopoly on oil...
...Eventually, however, competition for rapidly growing markets generated the need to secure greater sources of crude...
...Wohlstetter was in a particularly strategic position being a partner of the J.F...
...It was unsuccessful in establishing a strong foothold, however, and by May of 1932, Standard was forced to sell its Venezuelan and Netherlands Antillean operations to Standard Oil of New Jersey...
...The company was accustomed to dealing with the friendly Dutch colonizers, since Shell had had ample experience in the Dutch Indies (the colonial name for Indonesia...
...As their marketing operations expanded, Hess and Carey took the next step toward integrating their respective operations by investing in their own refining facilities...
...Rather, the oil enclaves within the national economies, oriented to the needs of the giant oil companies and the economies of the advanced industrialized nations, perpetuated the problems of underdevelopment...
...The Caribbean was particularly appealing to investors in the refining field, since it lacked any environmental legislation...
...Curiously, Ed Carey was selling out his large personal stake in CORCO just when Tesoro began accumulating stock to make its bid for control...
...Rather, they should buy their oil only indirectly through the majors...
...While initially there was economic growth from the refining industry, contradictions soon developed that were to leave a permanent mark on these islands...
...The majors clearly preferred to leave the production of residual to their Caribbean refineries, import it duty-free to the United States and reserve their higher cost domestic refineries for the production of highprofit items such as motor gasoline...
...The cut-off of crude oil to the BORCO refinery caused heavy losses for Carey who was forced to buy supplies on the open market to resell to his many customers...
Vol. 10 • October 1976 • No. 8
