, 1922-04-24
Head of Company Given
Great Contract Defends
Government Action in
Awarding Lease.

Government ACIlOn In
Awarding Lease.
In connection with reports
ing the arrangement between tho gov
and h Mammoth Oh com
pany. q Sinclair corporation. for de-
velopment OF n Teapot dome IN Ma
ron county. tho following statement
was issued from tho Sinclair offices
in New Fork city.
MI. H F. SincsaIr,s attention was
called to tho resolution introduced in
tho senate on Saturday last by Sen
ator Kendrick of Wyoming. Tho res
olution introduced by the Senator
was s upon a telegram received
by him from an oil association in
Wyoming protesting against the
leasing by h proper departments OF
the governments OF the Nav Reserve
No. . in Wyoming. known Is the Tea
pot dome In reply Mr.. Sinclair said
that the would welcome the fullest in
vestiEasiou OF his connection with the
matter.
III Sfnclztrs attention was fur
ther called to he fact tha some OF
Nv hNN6tAP%IH III EIpoNNAnb otIlAloT
KcndrickSs resolution. said thai the
Sinclair Consolidated Oh corporation
Is a subsidiary of the Standard Oil
company, which he dismissed with
the statement that The Sinclair Con-
sondsted on corporation is h largest
independent oil company IN the
world
AGREEMENTS
DISCUSSED.
Further tina this Mr.. Sinclair de-
elined to be quoted. but from one
familiar with the situation the follow
ing outline was obtained:
Such agreements as have e en-
tered into between the government
and the Sinclair interests are based
upon the OH Land Leasing act. pass
cd somewhat more than a rear ago.
The reason that action could no long
or be deferred was brought out in the
official statement made by the de
partment OF the interior on Friday
a s wherein It was pointed out hat
the Wyoming lands. which arc known
as the United States Naval Reserve
No. 3 are situate in what is known
as the Teapot Dome. which is ada
cent to and south of Salt Creek fields.
TT had been believed that geo
logical barrier had been interposed
betwc- n these two deposits or what
il known as a saddle In oil parlance
This assumption was found to be
false when a well was recently drilled
IN the saddle to the north of the
government reserve and produced oil
from the same sands Is In the Salt
Creek field. From this II was seen
that there would be constant drain
ago away from the governmental ma
val reservoirs SO that unless prompt
action were taken the field might be
depleted by neighboring Oh wells.
ALL RIGHTS
PROTECTED.
Under the operation of the oil
leasing act, which was originally
sponsored and favored by former Sec
rotary of the Interior Franklin X
Lane, who realized h need OF Sc
curing to the. government large future
on all rights arc protected
insofar as the government is concern
ed It provides for certain privileges
adhering to the original occupants for
protection of their interests and thus
debarred the same method Of public
letting such as prevails in the Salt
Creek field and other open govern
ment lands.
TN view of al existing conditions
1t became necessary to devise some
practical system for developing the
wells and of moving tho product
Thsre win be necessitated somewhat
moro than 1000 miles of pipelines. an
operation that may run to SIS, ooo,-
900 needed to tap other lines that cost
$40 .o0o. 900. The oil must be moved
more than 1000 miles. and there must
be provision for vast storage facilities.
In addition to that a part OF h plan
Is 90 be the substitution as near as
possible, to the point of manufacture
and delivery at seaboard OF fuel oil, in
case these lands do not produce oil
suitable for that purpose
TT must be borne in mind tina in
the consideration of this subject in
volving an operation of u magni-
tude there arc but two companies in
America capable OF handling it One
is the collective Standard oil. which
no longer exists as a single unit. and
the other is tho Sinclair Consolidated
the biggest independent oil company
in America and wholly unaffiliated
with the Standard, except through an
operation agreement in a half owner
ship of the Sinclair pipeline and the
Sinclair Crude Oil, Purchasing com
pany.
1.-THE claim made IN the telegram to
Senator Kendrick that SIS per cent of
the oil producers OF Wyoming were
interested in the matter requires ex-
pinnation, for it is known that the
Standard today controls so per cent
Of all oil production in Wyoming. This
would leave only 20 per cent interest
behind the telegram outside of Stand
ard.
isIn this same telegram he argu-
ment was made that oil produced in
Salt Creek and to be produced in Tea
DO dome was rot suitable for pro
auction OF fuel oil in large percentage.
This at once brings into play the pro-
vision thai is understood has been
made that there Shall be a substitu-
ton of crude oil If Teapot doesn't
produce this sort.