Political and commercial geology and the world's mineral resources

by Unknown

POSITION OF THE LEADING POWERS

United States.

—As regards probable developments in the petroleum industry within the next decade, the United States, thanks to the enterprise and foresightedness of financial interests of domestic origin, seems to have a strong position. United States interests are practically supreme in the commercial control of the petroleum resources of the Western Hemisphere, dominating the petroleum industry in the United States, Canada, Mexico, and Peru, holding substantial interests in Trinidad and Venezuela and in the prospective petroliferous areas in Central America and Colombia. Its only competitors are British and British-Dutch interests, which control the petroleum situation in Trinidad and are not only strongly intrenched in the United States, Mexico, and Venezuela, but are aggressively seeking to enlarge their holdings in those countries and to gain footholds elsewhere. Unless the United States adopts measures, such as Federal operation of the trunk pipe-lines, to limit the aggressions of foreign capital in this country, and erects a firm forward-looking governmental policy toward the protection of investments of its citizens in petroleum properties in other countries, particularly Latin-American countries, it may witness its commercial supremacy in petroleum affairs wane and disappear, while it is yet the largest political contributor to the world’s supply of petroleum.

As contrasted with the strongly nationalistic and deliberately aggressive governmental policy adopted by Great Britain, France, Holland and some other nations, the United States has never adopted any policy founded on recognition of the importance of political and commercial control of petroleum. American companies may not own and operate oil lands in the British Empire, in the French possessions, or the Dutch colonies, but the only American restrictions on foreign activity in the petroleum industry are those which cover all minerals contained in public lands. Only American citizens, or those who have declared their intention of becoming American citizens, can apply for patents to such land. However, after the application is made, there is no restriction on transfer of the mineral rights thus secured.

Great Britain.

—British and British-Dutch interests easily dominate the petroleum situation in the Eastern Hemisphere by supremacy in the petroleum industries of Russia, Persia, India, and the Netherlands East Indies. Domination of the petroleum situation in Russia alone is believed tantamount to dominion of the petroleum situation in the entire Eastern Hemisphere for the greater part of the next century. The strength of Great Britain’s present position in the world’s petroleum affairs lies in a strong governmental policy and in the wide scope of British petroleum investments, embracing practically every country where petroleum is an important product and nearly every country where it is a product of potential importance. The general policy of the British Empire seems to be to control all oil development and restrict operations by foreign capital. In Australia licenses are required for the exploitation of oil lands, and only companies incorporated in the United Kingdom or a British possession may receive such licenses. The Governor General has the right of pre-emption of all oil produced and in case of war may take control of all oil properties. In Canada, in those western provinces where minerals are the property of the Crown, petroleum and natural gas lands may be leased only to British companies. A similar restriction exists in Burma. In Burma a monopoly of the petroleum industry for 99 years was granted to the Burma Oil Co. in 1865. This grant seems to have been inspired by fear of the Standard Oil Co. of the United States, for the agreement between the company and the government stipulates that the former shall not amalgamate with other oil companies. Regulations of like effect exist in other British colonies where oil exists; in Barbados the British government has the right of pre-emption of all oil residues; in British Guiana, non-British companies can only hold lands by special license of the Governor; in British Honduras all mineral oil is reserved to the Crown; in southern Nigeria, the Gold Coast, Trinidad, and Tobago the British government has the right of pre-emption over all petroleum.

The recent granting of a concession amounting to a monopoly in the most promising oil district of Persia (a region that many oil experts believe likely to become one of the most important in the world) to a British company controlled directly (by stock ownership) by the British government, signifies an aggressive policy of England, outside of her own dominions, to secure and hold, under government control, oil lands in all parts of the globe.

It is understood that the best-known oil territories in Venezuela are already covered by concessions that are practically all controlled either directly or indirectly by British interests, chiefly the Dutch-Shell Syndicate.

So far as observed, German interests actually dominate the petroleum industry in Galicia and at home. Whether forced back on its own petroleum resources or on these reinforced by those of Galicia, Germany will obviously have an inadequate supply, and in consequence German interests are likely to be particularly aggressive in seeking petroleum in Mesopotamia, Africa and South America.

France.

—Since control of the petroleum interests of the Rothschilds passed into the hands of the Royal Dutch-Shell Syndicate (British-Dutch), the influence of French finances in petroleum affairs has been negligible, outside Galicia and Italy, where its potency was not great. French capital will undoubtedly participate in efforts to determine the petroleum reserve of the Barbary States, French dependencies, but it will hardly be much involved in organized efforts to control the world situation with respect to petroleum.

The French mining law holds that oil and gas belong to the state, and may be exploited under concessions, the area and time limit of which are matters of negotiations between the applicant and the authorities. It is understood that the French government is unwilling to grant oil concessions except to companies the majority of whose stock is held by French citizens. A company incorporated recently to work the Algerian oil fields contains in its articles of incorporation the provision that 60 per cent. of its stock must be held by French citizens.

Japan.

—Japanese investments in the world’s petroleum industry have not yet attained significant proportions outside Japan itself, though the Japanese government is officially alive to the importance of Japanese investments in petroleum properties in Mexico, particularly Lower California and Sonora; China; and undoubtedly Russia. Hence large investments of Japanese capital in the petroleum industry in one or all of those countries may be expected in the near future.