Political and commercial geology and the world's mineral resources

by Unknown

All recent concessions for the exploitation of oil properties contain a provision stating that the concession will be declared null if any of the rights are transferred to any foreign government. The provisions and the intent of a series of presidential decrees issued on February 19, 1918, July 8, 1918, July 31, 1918, and August 1, 1918, are to nationalize all petroleum lands and to permit them to be worked only by Mexican citizens or by companies that agree to consider themselves Mexican and further agree not to invoke the protection of their governments. A bill was presented in December, 1918, to carry out Article 27 of the new constitution, but thus far no action has been taken in the matter. The decrees and legislation growing out of Article 27 have been protested by the chief petroleum companies operating in Mexico and by their respective governments.

Commercial control of the petroleum resources of the Dutch East Indies is in the hands of the Royal Dutch-Shell Syndicate and is essentially absolute by reason of the restrictions contained in the Netherlands East India Mining Act and subsequent supplements on foreign acquisition of mining rights in the East Indian Archipelago. Actual control is in the hands of the Bataafsche Petroleum Maatschappij, which has a capital of $56,000,000 divided into five shares, three of which are owned by the Royal Dutch Petroleum Co., and two by the Shell Transport Trading Co. (British). Purely British interests control an inconsequential production of petroleum in British North Borneo and in Sarawak.

Prospecting licenses and concessions are granted only to Dutch subjects and to Dutch companies. It is officially stated that the object of these restrictions is not to exclude foreign capital; this is precisely their effect, and on account of the economic monopoly which the Royal Dutch-Shell now has of the petroleum industry of the Dutch East Indies, it would be very difficult for any new enterprise to gain a foothold.

Commercial control of the petroleum resources of India is exercised by the Burma Oil Co. through its dominance of production, refineries, and pipe-line facilities, and by reason of agreements as to marketing with its principal competitor, the British Burma Petroleum Co., both controlled by British capital. The Burma Oil Co. is allied with, if not directly controlled by, a group of British financiers, one or more of whom is interested in companies in Trinidad and in Persia.

During the war the petroleum industry of Roumania was temporarily wholly in control of German and Austrian interests. The advanced stage of development of the oil fields prior to the war and the intentional damage, much of which is irreparable, wrought in the fields by British detachments in 1916, when capture of the fields by Austro-German forces became inevitable, are believed, however, to have deprived Germany of a large part of the fruits of her conquest, as it is considered doubtful if the Roumanian fields can ever again be made to yield petroleum at the pre-war rate of 12,000,000 barrels per annum.

The American Petroleum Institute states that “Roumania is considering the erection of a state monopoly of both production and distribution on the ruins of the monopoly which Germany sought to establish there but was compelled by the armistice to renounce.”

Prior to the war Dutch or rather British-Dutch (Dutch-Shell) interests controlled about 30 per cent. of the annual production of petroleum in Roumania, German interests about 26 per cent., United States interests (Standard Oil Co. of New Jersey) about 18 per cent., French interests about 16 per cent., purely British interests about 6 per cent., and Belgian and Roumanian interests the remainder.

Through the Austrian “Society Gaz” and the German “Deutsche Erdoel Aktien-gesellschaft,” German interests have dominated the petroleum industry of Galicia for years through the direct control of the larger producing and refining interests and by reason of the fact that the smaller scattered interests were dependent almost entirely on the two leading companies, the Galizische Karpathen Petroleum A. G. (controlled by Society Gaz), and the Premier Oil & Pipe Line Co. (controlled by the Deutsche Erdoel A. G., which is in turn controlled by the Diskonto und Bleichroeder, a branch of the Deutche Bank) for their transportation and refining facilities. British and Dutch capital were involved in the Galician fields prior to the war, but not, it is believed, to a controlling extent in either of the dominant companies.

The petroleum industry of Japan is controlled wholly by Japanese interests and to a preponderant extent by a single company, the Nippon Oil Co. So far as the author is aware, no foreign interests share in any way in the development or control of the Japanese petroleum industry.

Commercial control of the petroleum industry of Peru is exercised by the Standard Oil Co. of New Jersey through its subsidiary, the Imperial Oil Co. of Canada. This control involves about 70 per cent. of the annual production, the remaining 30 per cent. being divided in the ratio of 27 to 3 between British and Italian interests respectively. So far as is known no other interests are involved.