Omaha daily bee., 1922-04-19
Teapot Dome in
Wyoming Field
Will Be Opened
New Oil Company Will Build
Pipe Line to Missouri and
Construct at Least
20 Wells.

Washington, April lS.-Contracts
for the opening Of the naval oil re-
serves in Wyoming TO private enter
prise, and the operation OF those al
ready opened in California in a man
ner designed to assure the navy
permanent storage OF fuel oil above
ground, were announced today by
Acting Secretary Of the Interior Fin
rey, with the Mammouth Oil COM
pany of Delaware and the Pan
American Petroleum company OF
California.
The contract with the Mammouth
Oil company, new concern, OF
which H. F. Sinclair OF the Sinclair
Oil company is president, provides
for the tapping OF the so-called Tea
pot Dome in naval reserve No. 5 in
Wyoming, the government to receive
graduated royalties ranging from
1912 per cent to 50 per cent tor
the entire area of the reserve. un-
der the Pan American petroleum
contract, handling and exchange OF
crude oils from naval reserves Nos:
and 2, in California, is provided
for, involving the exchange OF the
navy's royalty in oil from the re-
serves for fuel oil in storage at points
designated by the navy on the "a
cific coast.
The contracts are in line with the
recently announced policy Of the
government with reference to the dis
position of the naval oil lands
worked-out by Secretaries Fall and
DENLY and instituting departure
from the former policy OF storing
naval oil i'll the ground
I Drill 20 Wells.
The Mammouth company will
drill at least 20 wells within limit
ed time, Judge Finney said, and will
construct pipe fine from the Wyo-
ming fields to existing pipe lines in
Missouri for the exchange Of crude
for fuel oils for naval use. through
which navy specified bunker A oil
will be delivered at any point named
from Guantanamo, Cuba, to the
northeast corner of the United
States.
A line Of credit is provided for the
exchange and storage Of oil with
out cash outlay by the government"
at any point fixed by the Navy de-
partment along the Atlantic coast.
The Mammouth company as lessee
of the field, shall, at its own expense
and without obligation on the navy's
part provide gasoline. kerosene.
lubricating and cylinder oil at market
prices.
The pipe line when built--will be
common carrier for all govern
ment oils which will be given prior
ity of transportation both from the
Teapot Dome and the adjoining Salt
creek fields over the use of the pipe
line by the lessee. The pipe lines al
ready constructed with which the
new pipe line will connect, Judge
Finnev said. represent an investment
of $ll5,000,000 and the contract calls
for an investment of not less than
S26,000,000 in addition.
Open Competition.
A feature of the new scheme,
mot the least in importance" Off
cials said, is the opening up to COM
petition of the Salt Creek field. and
the probahiijtv M incre, sino the
price of oil from this field which
adjoins the teapot to tine midconti-
nent price.
Through lack OF competition be-
cause of lack of pipeline and refining
facilities. i. was pointed out. many
OF the small independents were un-
able to find market for more than
40 per cent of their capacity which
was sold through an operating COM
pany at price usually much lower
thar the midcontinent price.