Evening star., 1922-03-12
LOOK TO SOUTH AMERICAN
FOR FUTURE OIL SUPPLY
American Pioneers Already in the Field,
Working Under Great Difficulties to
Cain a FOOthOld.

| hnanclal status might make il prac-
| tical
| Most OF the South American coun-
! tries, DR.. White states, "arc about
10 witness the building of a great
BUSINESS of production, transporta-
tion. refining and marketing of oil.
! IN some OF the countries the new in
| dustry is likely to exceed all other
| mineral industries combined and to
mark great changes in the social as
well as the economic life"
= !: < !:
Dr. White emphasizes the impor-
lance of concerted effort on the part
| OF the republics of South America to
| AID in the systematic development of
| their oil resources by the formulation
| or policies which Will be helpful!
rather than obstructive.
While it is important that oil COM
panles in the United States should
| make haste to enter the South Amer
| ican Held while it is open for compe-
tition, it is not surprising that they
rave shown hesitancy in doing SO be
fore. And those who are now obtain
ing a foothold in this territory de-
| IN undertaking a difficult task.
Oil prospecting and drilling and
| marketing the product in South
| America differ from the methods fol-
lowed in the United States. No COM
| pany, according to experts, should
| enter the field without plenty of cari-
tai behind it. In the first place, some
| of the South American governments,
| lacking the capital and the knowledge
] to develop their resources themselves.
have very naturally surrounded their
| concessions with SO many conditions
| that the government stands TO win in
| any case at the expense of the con-
| cessionnaire. In this respect. taxi.
Colombia. which leases oil territory
| on condition that should the lessor
fail to fulfill all specifications OF It's
contract il defaults it's lease and all
| its drilling. storing and other equip
ment to the government. This means
| that after company has gone to the
expense of locating, drilling and
storing oil it may have to forfeit its
| contract and its property to the gov
| ernment for failure to fulfill some
technical requirement.
X x x
An oil company sending its repre-
sentatives into South American ter
ritory must literally blaze its way
There are few roads. Expensive
equipment and highly paid experts
| must be taken all the way from the
United States, and even if oil is found,
the difficulties of marketing or stor-
ing it are enormous. South America 5
consumption of petroleum is COM
paratively limited, and the market
there is proportionately small. The
oil found must be transported to the
! seacoast by long pipe line or railways.
which must be built and maintained
by the companies themselves. And
after reaching the seacoast the prod
uct is still to be refined and trans
ported over the water to a market in
the United States.
But, while the difficulties are great.
the need is greater. and South Amer
ica by rights should be the field for
American enterprise.
The United States hopes 10 take
part IN lHo ueNelOpIllcHl OF SOull
America. Some day there will be
great stream of commerce between
| the two continents-a commerce
! maintained by ships flying the Amer
ican flag. The demands of our ship
ping program alone involve fuel oil
! in quantities equivalent to nearly
| one-half of the present domestic out
put, according to DIR. George Otis
| Smith, director of the United States
geological survey. who declares this
| increase must be met by additional
annual production of nearly 2oo.-
| 100000 barrels of crude oil. The
| Shipping Board has already an
nounced 1t intends to establish fuel
stations along the trade lines and
! assure unrestricted operation of our
ships.
To accomplish this the oil resources
of South America must be tapped.
And it is encouraging to remember
| that when this is done the product
, will be available either for our home
| refineries or for the more distant
bunker stations along the trade
routes. And wherever an oil field is
| developed by American capital all the
| supplies needed to develop and oper-
ate this foreign field will come from
the United States.
An American oil company operating
| in South America means another
market for a company manufacturing
oil equipment in Pennsylvania.