Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-01-17
BATTLE Of GIANTS
IN OIL OLD FEUD
Most Of War Between Shell
and Standard to Be in
India and China.
by J. c. ROYLE.
Special Dispatch TO The Star.

Special Dispatch TO The star.
NEW YORK, January 1.-THE gage
of battle between the Royal Dutch Oil
Co. and some Of the Standard Oil
group has been flung down and &C
cepted. The formal lifting of the
gauntlet was signifled by recent state
ment issued by the Standard Oil
as to the purchase of Russian oil.
This oil. according to charges by the
Dutch Shell group, Is alleged to have
been "stolen" from British interests
through naturalization of natural re-
sources by the Soviet government.
The United States, for a time at
least, is likely to see only minor Skin
mishes on its sectors. The main bat
ties at present are likely to be staged
in the Far East, where competition for
business in India and China is acute.
It also may spread into European mar
kets. where both Standard of New
York and Vacuum OIL which also buys
from the Soviet government, are active
distributors.
The value Of the oriental markets
lies more in the future development Of
the Eastern nations than In the actual
volume of present-day trade.
Will Broaden Eventually.
Few doubt that the struggle will
over the world The actual struggle In
the East has been in progress for some
months. but the statement issued by
Standard Oil of New York was the first
formal reply to Sir Henri Deterding's
declaration of war on behalf of the
Dutch Shell. The Shell interests, 1t
is admitted even by rivals, are situated
so as to be the most formidable
antagonists.
The Royal Dutch Co. for the work.
ing Of petroleum wells in the Neither
lands Indies is affiliated with the Shell
Transport g. Trading Co. and the Shell
Union Oil Corporation. Together they
account for production of about tenth
of the entire crude oil supply of the
world. About 70 per cent OF this out
put comes from properties in the
United States. Mexico and Venezuela
while much OF the remainder comes
from the Dutch East Indies. The
Dutch Shell interests also own hold
ings in Rumania. Egypt. Panama, Peru.
Ecuador and other countries. Conse-
quently, they are in a position to COM
pete on an advantageous basis in
almost any market.
The Shell Union Oil Co Is the third
largest producer of crude oil In this
country. with holdings in IA States and
Is largely interested In developing the
West Texas fields. now in the center
Of the oil stage. Through the Roxana
Petroleum Co., the Dutch Shell COM
petes in the retail and filling station
field in many sections Of the United
States. It is reported to have begun
hostilities against the Standard OIL in
terests In Ohio and other sections of
the Midwest. However Standrardof
New York is well intrenched in its par
ticular American distributing field. New
England.
Splendid Shape for Battle.
Standard of New York is in splendid
ing interests and has added TO these
materially In recent periods. Its refin-
ing and marketing position Is strong
1t has working capital Of 1898 900
and its physical properties are valued
at s4i4.4 900. 1t has surplus Of $94.-
65l, 900.
Vacuum Oil, the ally Of Standard OF
New York. also Is extremely powerful.
It owns its own feet of tankers and does a
tremendous export business. 1t has a
working capital Of $69,528 900 and q
surplus OF s66. 500 900. 1t Is primarily
a refining and marketing organization.
The present situation In the oil In
dustry IN the United states does not
lend itself TO active hostilities between
the rivals for the moment. The oil tn
dustry here is in state OF depression.
Prices. which are among the main
weapons OF q trade war. already are
down TO rock bottom for both gasoline
and oil. and Standard Of New York this
week has made further cuts In New
England. Much oil Is In storage and
demand has not diminished the supply
10 O marked degree. But sooner or
later. the industry feels that the two
rivals will clash in American selling ter
ritories and that 1t viii then indeed be
battle Of giants
The stand taken by the Standard OIL
Co OF New Jersey Is q hands-off atti-
tude. 1t Is believed In some quarters
TO emphasize the complete independence
Of the various so-called Standard OIL
units split from the main stem of Stand
ard of New Jersey at the order Of the
Supreme Court In 1911.