Political and commercial geology and the world's mineral resources

by Unknown

POLITICAL AND COMMERCIAL CONTROL OF RESOURCES

The accompanying diagram ([Figure 2]) shows graphically the approximate commercial control of the world’s production of petroleum in 1917.

Fig. 2.—Approximate commercial control of the world’s production of petroleum in 1917.

Commercial control of the petroleum industry in the United States is in the hands of the so-called “Standard Oil Group” of companies, through their control of most of the great pipe-line systems of the country, of probably 75 per cent. of the refining facilities and of a substantial part of the actual production. Other domestic interests having important shares in the control of the petroleum industry in the United States include the Southern Pacific Railroad Co., Cities Service Co. (Doherty interests), General Petroleum Corporation, Gulf Oil Corporation, Ohio Cities Gas Co., Cosden & Co., Sinclair Oil & Refining Corporation, The Sun Co., the Texas Co., the Tide Water Oil Co., and the Union Oil Co. Foreign interests in the United States include purely British companies, which control a production of about 2,000,000 barrels a year; British-Dutch companies represented by the Royal Dutch-Shell Syndicate, which control a production of about 9,000,000 barrels a year, together with refining and marketing facilities; and Franco-Belgian companies controlling a yearly production of about 1,000,000 barrels. Aside from the very probable holdings by individual Germans of shares in companies engaged in one or more phases of the petroleum industry of the United States, the author is aware of no organized German interest in any phase of the domestic industry.

Commercial control of the petroleum industry of Russia is, under the political conditions now existing in central Europe, largely a matter of speculation. As nearly as can be ascertained, the dominant control is in the hands of purely British, Franco-British, and British-Dutch (Royal Dutch-Shell Syndicate) interests. Certain of the second-named interests are allied closely with an additional group of capitalists represented by the firm Nobel Bros., of much importance, the present control of which is by no means clear, from the literature available on the subject. Though originally Swedish, the financial interests now involved in Nobel Bros. are believed to include representatives of financial groups in England, France, and Germany as well, with control probably lying with the Anglo-Swedish interests. Before the war, direct German interest in Russian petroleum included control by the Deutsche Bank through a Belgian company (the Petrole de Grosny) of the important producing and refining company, A. I. Akverdoff & Co., control of which is now in British or British-Dutch hands. As in the United States, a considerable part of the actual production of petroleum in Russia is distributed among a large number of individually weak companies, dominated, through the control of pipe-line or refining facilities, by one or another of the principal groups.

Of considerable importance in Russian petroleum affairs at one time was the European Petroleum Union, organized for combat in the world markets with the Standard Oil trust. This union included among others such important petroleum operators as Nobel Bros., the Rothschild interests (now Dutch-Shell), Mantaschoff (now Russian General Oil Corporation) (British), and the Deutsche Bank, the latter controlling Akverdoff and Spies in Russia, together with important companies in Roumania and Galicia. How far this union controlled the affairs of its constituent companies is not evident from available data, and its present influence on companies now operating in Russia is uncertain.

Conditions in Russia make impossible any definite statement on the petroleum situation. A decree of the Bolsheviki government, dated June 20, 1918, on the nationalization of the petroleum industry, declared as the property of the state all movable and immovable property employed in and belonging to that industry. Trading in oil was declared a state monopoly and was delegated to the chief petroleum committee of the fuel department of the supreme Council of National Economy. As the chief producing areas are now under British military control, this decree is ineffective.

Commercial control of petroleum in Mexico is divided among United States, British, and British-Dutch interests, which controlled about 65, 30 and 2 per cent., respectively, of the production in 1917. The interests of the United States include the Doheny group, operating principally as the Huasteca and Mexican Petroleum companies; the Standard Oil Co. of New Jersey, operating as the Penn-Mex Fuel Co.; the Sinclair interests, operating as the Freeport and Mexican Fuel Oil Co.; the Texas Co.; Gulf Co.; Southern Pacific Railroad; and others. The British interests are represented by the Pearsons, operating as the Mexican Eagle Oil Co.; and the British-Dutch interests by La Corona Petroleum Co., and Chijoles Oil, Ltd., controlled by the Royal Dutch-Shell Syndicate. No exclusively German interests are known to hold a substantial portion of any important company operating in Mexico.

Formerly concessions were freely granted to foreign individuals and companies for the exploitation of mineral deposits, and oil lands were sold by the native owners to foreigners. Article 27 of the constitution of 1917 expressly forbids any but Mexican companies acquiring directly or operating directly petroleum lands in Mexico.