, 1921-08-23


Discounting the report, in its en-
tirety. o. W. White, state oil and gas
Inspector who is now stopping at The
HenninE. and who was mentioned as
one Of the principals in charge OF the
deal flatiy denied the report. stating
that the plant at Thernopolis had re-
sumed operations but that as far as
he knew the Standard had nothing to
do with the refining OF the heavy oil.
Mr. White was acquainted with the
situation. who as n state official
agreed 10 secure the services OF a
man who could operate the refinery
In order to Increase tho states rev
enucs by providing a market for the
heavy oil that is produced in Warm
Springs and Hamilton dome fields.
Royalty Taken in Oil.
With plans Of the government to
take its royalties from lands in the
Salt Creek field in oil. Important de-
velopments regarding the disposal OF
this p~roductiCn are thought to be
Forthcoming. Reviewing the matter
the following story in the wyoming
oil news is OF interest:
Some time ago the interior depart
mont notified all lessccs that all roy
alties must be paid in oil. Tho pur-
pose OF this was to enable the inter
Tor department to contract this royal
~ TO the United States shipping board
which in turn contracted to exchange
this oil for fuel oil for delivery at the
seaboard.
The shipping board. under this ar
rangcmept. contracted with the Mid
west Refining company to turn over
TO h cor.oagy 2~,1sI,24o barrels Of
Wyoming crude for which tho board
would receive in payment 3,43l, sT5
barrels OF fuel oil deliverable at San
Francisco. San Pedro and Port San
Luis on the Pacific coast. The exc
cution OF this contract was followed
by another between the Midwest and
the Standard Oil company of CALI
foTnia whereby Standard of California
would receive refined products from
tho Midwest for fuel oil in California.
The purpose OF this deal wa to elm.
mate long freight hauls on the two
classes OF products<
The contract between the interior
department n the shipping board ex-
pired on May p, since which time a
new contract has been under consid-
Grafton. II is understood that a diff
ferslce arose over the wording OF the
contract which provided for IN pay
ment OF posted prices at the first OF
the month for government royalty
oil delivered during the month. The
interior department desired that the
new contract should provide for the
posted price OF this day of delivery.
A new contract has been drawn and
is now awaiting approval.
1t is understood that no contract
VIII be made between the shipping
board and any refiner or producer for
the exchange of royalty oil for fuel
oil until the agreement between the
interior department and the shipping
board is approved. 1t is this contract
which is attracting especial attention
locally as 1t does not appear certain
that 1t will 20 TO the Midwest. Under
normal conditions the
would be entitled to approximately TO-
600 barrels a day from Salt Creek
though at present 1t is considerably
under that mount. This amount of
Salt Creek crude open for contract is
sufficient to attract the attention of
more than one large interest. There
are several large interests which are
in a position to exchange fuel oil at
the seaboard for the Wyoming crude.
Among these are the Union on COM
pany of California, which is steadily
increasing its activity in his district;
the Doheny companies which specialize
in Mexican fuel oil: and the Shell com
pany of California which is a mem
Der Of the Royal Dutch group.
1t is unlikely that any of these
companies would disclose their hand
at this time IL such plans are under
consideration but it is rather signifi-
cant hat the Western Pipeline com.
pany was recently organized to build
a pipeline from Salt Creek to Cas-
per and that its plans have progressed
to such a point that actual construc-
ton could commence within a short
time. This company was formed Just
about the time the various royalty
contracts expired. The laying OF the
pipeline has been temporarily delayed
and perhaps the delay in signing OF
the new contracts on royalty oil has
more to do with this than appears on
the surface. Anyway, there has beer
considerable mystery surrounding this
pipeline project and the identity OF its
hackers.