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A SHORT HISTORY OF LAGO OIL & TRANSPORT COMPANY, LTD.

  ARUBA, N. W. I.

THE BACKGROUND

    The is the story of how Lago began; with a man in California, who moves to Mexico to develop the oil industry in that country and because of salt water entering his oil wells he moves to Lake Maracaibo, discovers a vast amount of oil but was unable to send it to market because the channel into Lake Maracaibo was to shallow to allow ocean going tankers to enter the lake, so, he builds a transshipping port on the island of Aruba, runs out of money, sells his holdings to Standard of Indiana, who builds a small refinery, and then because of a tax that was anticipated to be imposed on imported crude by the U S Government, they sell their  holdings to Standard of New Jersey, not for the small refinery in Aruba, but for the vast holding in crude oil Standard of Indiana own in Lake Maracaibo.  And then, because Aruba is under Dutch control, and because Standard Oil of New Jersey has won a contract to supply Britain with 100 octane Aviation Gasoline and the Avgas must be produced outside the United States, the Lago refinery becomes an important asset by providing the place outside the United States where the Avgas will be produced.  Thus the size of the Lago refinery is expanded to produce Avgas long before the United States enters World War II.  Because of the demand for Avgas created by the war further expansion is done at Lago during World War II.

    During World War II there was a production agreement reached between the Venezuelan Government and Standard Oil, which capped the amount of crude that could be export from the country and the amount of crude that would be processed in Venezuela.  This agreement capped the size of Lago Oil & Transport Co. Ltd.  at 500,000 barrels a day.  This agreement is the prime reason for the Lago refineries ultimate demise.  One book says the Lago refinery is not upgraded and capital expenditures are instead placed in a new refinery at Amuay Bay so the agreement can be met for processing of crude in Venezuela.  Thus, over time, Lago because of a lack of updating and new construction, becomes an outdated and non-profitable facility, and in time was closed.   A later book says the same thing and then goes on to say that Lago was completely upgraded and $384 million were spent at Lago between 1948 and 1975 to keep the refinery updated, although its capacity was never expanded.

    After the closing of the refinery, Lago began to dismantle the facility in order to be able to return the land lease, in its original condition, to the Dutch Government.  After dismantling had begun, but before it was completed, a purchaser was found, Costal Petroleum.  It should also be noted that the last two owners, Costal Petroleum and now El Paso Natural Gas, both seems to have also found the old Lago refinery facility not to be profitable, even with the updated facilities.  This statement is based on the fact that Costal sold the refinery to El Paso and now the rumor is the possible closing of the facility by El Paso Natural Gas.

THE STORY

          The Beginning, Pan American Petroleum

    The story of Lago Oil & Transport Co. Ltd. begins with Mr. Edward L. Doheny, the founder and head of Pan American Petroleum.  In May of 1900, Mr. Doheny, along with C. A. Canfield and A. P. Maginnis, made a trip to Mexico in hopes of finding oil.  Upon finding oil they formed the Mexican Petroleum Company of California.  This company developed the first oil fields and refineries in Mexico.

   On February 2, 1916, Pan American Petroleum & Transport Company was incorporated and had as its holding the following: 31 tankers, oil properties in California under the name, Pan American Petroleum Company, Mexican Petroleum Co. Ltd., The Caloric Company and British Mexican Petroleum Company.  Mr. Doheny was the President of this new holding company and ran it until his retirement in 1925; soon after Lago Oil & Transport Co. Ltd. transshipment facility was started at San Nicholas Bay, on the island of Aruba.   Mr. Doheny had been a wildcatter in California who is credited with the development of the first oil fields and the oil industry in Mexico. 

    His fields in Tampico were close to the Gulf of Mexico and as oil was pumped from the oil wells, salt water was entering the well, over time the crude oil became contaminated by the salt water.  With large contracts to supply crude to his and other refineries on the Gulf and East Coast of the United States Mr. Doheny, went looking for a new source of crude oil.

    It is interesting to note that in the book Mexican Petroleum that is printed in 1922 that Mr. Doheny drilled for oil in Venezuela in 1914.  At that time he drilled wells in four locations and each site produced oil.  It seems he also built a pipeline to a small refinery he had built in San Lorenzo, which is about sixty miles south of Lake Maracaibo. See footnote 1 at end.

    The book notes that Shell had also built a refinery on the Dutch Island of Curacao and Pan American Petroleum shipped 300,000 barrels of crude to this Curacao refinery in 1918.  In 1919 Mr. Doheny received geologist reports that there were petroleum over a large area of Lake Maracaibo but because of World War I, drilling was curtailed. See footnote 2 at end. 

    Early on, The Shell Company and Mr. Doheny had been successful in discovering oil in Lake Maracaibo and it was there that Mr. Doheny returned in search of a new source of Crude when his wells in Mexico were being contaminated by salt water.  His second explorations were successful and soon he was transporting crude by barge from Lake Maracaibo to the port of Oranjastad, on the island of Aruba, for transshipment to the Gulf and East Coast of the United States.  Mr. Doheny's Pan American Petroleum owned refineries in Louisiana and Savannah, Georgia.

    The Dutch government imposed no tax on the importing or exporting of crude, so it was an ideal location for the transshipment, but a more permanent site was needed because production was increasing.   Mr. Doheny contracted with Andrew Weir and Company, Ltd., a shipping company from Britain to provide the ships to transport of the crude from Lake Maracaibo to a new facility he was planning to build.    The site was to be selected by a representative from Andrew Weir, the shipping company, Captain Rogers and representatives from Pan American Petroleum.  After much searching a site was selected.  The site selected was San Nicholas Harbor.  At the time San Nicholas harbor had a small pier, in much disrepair, that had been use for the shipment of phosphate, that had once been mined on the east end of Aruba.  San Nicholas bay was a natural harbor, protected from the sea by a natural reef and there was a small narrow entrance at the West end of the reef allowing small ships to enter the bay.  For this bay to be used for the transshipment of oil the entrance would have to be widened and the bay would need to be dredged.  Additionally, piers for the new lake tankers need to be built and storage tanks and pumping stations for the crude would have to be constructed.  The group looking at the site, felt if was perfect, so after signing a 99-year lease with the Dutch Government work was begun at the end of 1925.  The job was completed and the San Nicholas harbor officially opened in November of 1927.

    It was at this time that the houses on the lower road, from the powerhouse to Rogers Beach were constructed to house the families of the officers on the lake tanker and the supervisory personnel operating the transshipping facility.

    At this point in the story we now have a crude oil transshipment facility with storage tanks and about 90 houses for personnel.  Pan American Petroleum owns the facility and the personnel living in the houses are English families, of officers on the lake tankers, (which are owned and operated by Andrew Weir) and personnel from Pan American Petroleum, who are operating the pumping and storage at San Nicholas Harbor.

               Standard Oil of Indiana, The beginning of a Refinery

LINK TO PHOTO OF LAGO REFINERY:

EARLY PHOTOS                    PHOTOS FROM THE 1950's

    Soon after building the transshipment facility in San Nicholas, Standard of Indiana purchased a stock interest in Pan American Petroleum, however they did not have a controlling interest in Pan American Petroleum but they continued to purchase stock in the company. 

    Because of the large amount of crude being pumped from beneath Lake Maracaibo it was Pan American Petroleum who decided to build a refinery in Aruba, but it was Standard Oil of Indiana, because of their now large stock interest in Pan American Petroleum, who provided all the technical and supervisory personnel for the construction and operation of the refinery.   Again the decision to build a refinery on Aruba was done for many reasons: Pan American Petroleum and Standard of Indiana both an eye to the foreign markets and Aruba was well situated because of its location in the world, Aruba is closer to Europe than the East Coast of the United States, thus shipping to Europe is cheaper than shipping from the U. S. Aruba also had a population of between seven and eight thousand and the men of the island were forced to migrate to Cuba to cut sugar so Standard of Indiana assumed there would be a willing and able work force on the island, and finely, and most important, was the stability of the Dutch government as compared to that of the Venezuelan Government.  In Standard Oil Company (Indiana) Oil Pioneers of the Middle West Aruba is described as not an attractive tropical island and because of it being barren, it was necessary to import all the materials to construct a refinery, as well as provide everything for the care and comfort of its employees.  All the technical and supervisory personnel sent to Aruba by Standard of Indiana were sent from their state side facilities, mostly from the Whiting refinery in Indiana and the Standard of Indiana refinery in Casper Wyoming.  They were all housed in what had become Lago Colony, an expansion of the housing that was provided by Pan American Petroleum for its foreign staff employees and ship officer's families.  See photo 1 for a view of the refinery and the small colony at the time of the sale of the facility to Standard of New Jersey. (Note: From the photo in New Horizons, which did not reproduce that well, it looks like the last road in the Colony in 1932 was the road that left the refinery gate, went up past the area later used to build the American Legion, Dr. Reeves dental office, the back of the elementary school and must have stopped at the five-way intersection by Colony Service.  The houses on the lower road seem to stop at Rogers Beach. Even in the book the photo is not too clear. Dan).

    Construction was begun in May of 1928 on the refinery and by January 1, 1929 the first refinery units were in operation.  The last unit was completed in December of 1929.  This was, at the time, one of the most modern refineries in the world, with an initial capacity to process 111,000 barrels of crude a day.  Because it only processed the heavy crude from Venezuela the refinery was designed to handle only the one type of crude and thus the refinery was very efficient, even though the product it was processing had a high asphaltic base, a high sulphur content and was heavier in gravity and more viscous that most crude found in the United States.  The new refinery was both a topping and cracking plant and greatly increased the amount of gasoline Standard of Indiana produced.  In the end this proved costly to Standard of Indiana because they did not have the marketing facilities in the United States or abroad from which to sell the new volume of gasoline they were now producing in Aruba. 

    During this period there was a proxy fight between Colonel Robert W. Stewart, Chairman of the Board of Standard of Indiana and Mr. John D. Rockefeller that began over Mr. Rockefeller wanting Colonel Stewart to resign as Chairman of Standard of Indiana.  Unable to obtain a resignation, Mr. Rockefeller issued a statement that he had lost confidence in Stewart.   The court battle that followed dragged on for a long time and in the end Mr. Stewart lost.

    After Stewart, Edward G. Seubert was made President of Standard of Indiana. Because of information that came out in the court fight between Stewart and Rockefeller over Stewart=s mismanagement of Standard Oil of Indiana (the teapot dome scandal), Pan American Petroleum and its holding, Seubert called for a full investigation of all these allegations.

    It was Seubert who, during this period, acquired full control of Pan American Petroleum, the stock swaps began in August of 1929 and by the end of 1932 Standard Oil of Indiana had 97.37 % of Pan American Petroleum's Class A stock and 95.96 % of its Class B stock.

This brings us to 1932 and in Aruba we have a crude oil transshipment facility, a refinery that processes 110,000 barrels of crude a day and a colony that extend back from Rogers Beach with three rows of houses.  Standard of Indiana now owns it, but because Standard of Indiana has no place to sell the gasoline it is now producing, the refinery is not profitable.

    Standard of Indiana soon realized that the cost of opening foreign markets would be very expensive and at this same time the US Government was talking about imposed an import tax on foreign crude imported into the United States.  This tax would have made the petroleum products from Aruba more expensive in the United States and thus unprofitable to sell there.  This left Standard of Indian with little, to no, foreign marketing facilities, and if the U. S. Import Tax were enacted, no market in which to sell the production from Aruba. 

    Standard of Indiana did not go looking for a buyer, they learned from one of their Board of Directors that Standard of New Jersey was interest in their foreign holding.  Standard of Indiana understood that it would take a company with large resources to purchase their entire former Pan American Petroleum holding and so they offer them to Shell Oil, The Texas Company and Standard Oil of New Jersey. 

   Standard Oil of New Jersey, the Expansion of the Refinery

    The buyer was Standard Oil of New Jersey. The purchase price was $140,542,292.11.  This sum was paid by $50,000.00 in Cash and $90,452,293.11 in Standard Oil of New Jersey stock.  Walter C. Teagle, the President of Standard Oil of New Jersey made the purchase, not so much for the refinery in Aruba, it was of little use to Standard Oil of New Jersey at the time, but for the known and producing crude oil reserves in Venezuela.  Remember that Standard Oil of New Jersey=s was present in Venezuela as the Standard Oil Company of Venezuela.  It had also purchased Creole Petroleum.  However, it had not been very successful in discovering crude on its own.  In fact it has been very unsuccessful.  This failure was a great frustration to Mr. Teagle and this prompted him to decide to purchase producing fields rather than try and develop fields.  The lack of success in discovering oil prompted Walter C. Teagle to first purchase Creole Petroleum, a syndicate that had producing fields in Lake Maracaibo.  Jersey Standard purchased Creole Petroleum Corporation on June 30, 1928 but the papers were retroactive to April 1, 1928.  At that time Creole Petroleum had been dealing with Lago, it had made arrangements with Lago Oil and Transport Co. Ltd., to use their facilities on Aruba to transship their crude, so at the time of the purchase of Standard of Indiana, there was a working relationship between Standard of New Jersey, the new owner of Creole, and Standard of Indiana, the owners of Lago on Aruba.

 The Lake Tankers, The Supply Line to the Lago Refinery

    The entire operation in Aruba depended on a fleet of little tankers that carried the crude from Lake Maracaibo, through the shallow cannel to Aruba.  Now is a good time to go into a little about the lake tanker fleet that served the Aruba refinery.

    The operation of the lake tankers (a lake tanker was a small vessel of about 6,000 tons) was critical to the operation of the Aruba refinery and although ownership of the tankers changed during the period they always operated to supply the Aruba refinery until after World War II.

    These lake tankers must have been well built, two of them, the Inverrosa and the Inverruba were reassigned to act as fuel oilers off the coast of West Africa, they served for four years without going to dry-dock or undergoing major repairs.   Three of the lake tankers, because of their shallow draft and flat bottoms, were converted into tank landing ships (LST’s); they were the Bachaquero, Misoa and the Tusajera.

    The German High Command, realizing the importance of the refineries in Aruba and Curaçao, sent a task force of U-boats to disrupt the shipments of crude to these refineries.  In this attack on the night of February 16, 1942 four lake tankers, the Pedernalas, Oranjestad, Tia Juana, and the San Nicholas, were torpedoed and three sank and the forth, the Pedernalas, was beached with her mid-section, (the bridge and ships steering), destroyed.  She was taken to the dry dock at Lago, the mid section was removed and the fore and aft section welded together, a temporary wheel house was added at the dry-dock in Aruba and she made it to Baltimore under her own power, where a new amidships section was added.  These four lake tankers had a total crew of 102 and of those, 47 lost their lives.  This attack put a great strain on the remainder lake tankers to supply crude to the Aruba refinery.

    Before the attack the lake tankers were not protected, after the attack operations were restricted to daylight hours and naval destroyers escorted the tankers.   This practice lengthened the turnaround time from 2.58 days to 4 days.  The loss of the four-torpedoed tankers cut the amount of crude carried to Aruba by 115,700 barrels per day.  This was another contributing factor to the loss of production at the Aruba refinery in 1941.

    This loss of production prompted the Maritime Commission to approve the construction of seven new lake tankers under wartime conditions, using materials that were in short supply.

    The contract for these seven lake tankers was signed on April 30, 1942.  The contract was for a shallow-draft, twin-screw, steam-powered tanker of the Boscan class.  These tankers were designed to have a capacity of 5,650 tons and a speed of about 10 knots. The contract to build these new ships was signed with the Barnes-Duluth Shipbuilding Company of Duluth, Minnesota.  The first tanker was delivered on July 1, 1943 and the seventh tanker was delivered on in October 1943.  The San Joaquin was delivered on August 27, 1943, the Caripito on September 10, 1942, Temblador on September 20, 1943, San Cristobal on September 28, 1943, Guiria on October 21, 1943, Guarico on October 28, 1943 and Valera on November 8, 1943.  The Valera was torpedoed on March 7, 1944 off the coast of Barranquilla, Columbia while carrying a cargo of fuel oil from Aruba to the Panama Canal.  All of the crew and officers, except for the Captain, escaped the burning, sinking ship and were rescued.

    To get these new lake tankers to Aruba they were sailed from Duluth, Minnesota, through Lake Superior, the St. Mary=s River, Soo Locks, the northern section of Lake Huron, Mackinac Straits, the entire length of Lake Michigan to Chicago, through the Chicago Sanitary and Ship Cannel, the Des Plaines River, the Illinois River and into the Mississippi and down to New Orleans.  The trip had to be made in daylight hours, as there were no night navigational aids on the rivers at the time.  It was a distance of 2,247 miles and one tanker took 28 days and the shortest time to make the trip was 15 days.

    In New Orleans the tankers were again dry-docked, defense equipment was installed, (presumably deck guns) the wheelhouse and mast were added and the bottom was again painted before going on to Aruba.  Because of low bridges encountered on the trip the ships could not have a height in excess of 53' 6".  Therefore, they left the Duluth shipyard without a wheelhouse cover, superstructure or masts. See footnote 3 at end.

 Post World War II, the Phasing Out of Lago

    During World War II, the channel to Lake Maracaibo was constantly being dredged.  After World War II the channel dredging was completed thus allowing large ocean going tankers to enter the lake and receive crude.  Further crude could also be picked up at the new refinery that was built at Amuay Bay.  According to Auke Visser, the last of the lake tankers were sold 1954.  Many were put to other uses and some were scrapped.

    The Amuay refinery was opened on January 3, 1950.  This refinery received its crude by the Ule-Amuay pipeline, which in effect eliminated the need for small lake tankers to carry crude to Amuay.  Also, the channel to Lake Maracaibo had been dredged to allow the passage of deeper draft tankers.  The channel between Lake Maracaibo and the Gulf of Venezuela and the Caribbean Sea was through the Tablazo Strait.  This cannel was originally twelve feet deep and in the dry season it was ten feet deep and full of moving sand bars.   When the Amuay refinery was completed, the channel had been dredged to allow the passage of much larger tankers.  With the channel dredged, the small obsolete lake tankers were replaced by four larger (32,000 dead weight tons (DWT), tankers.  These new tankers were a little more than five times as large as the small lake tankers they replaced.  These were the Esso Amuay, Esso Caripito, Esso Maracaibo and the Esso Caracas.     Here there seems to be a conflict between what Auke Visser writes in the paper & what Bennett H. Wall writes in Grown in a Changing Environment.  Auke Visser stated that the last small lake tanker was sold in 1954, while Wall states the last small lake tanker; the Esso Mara was retired in 1960.  Whatever the case, the new larger tankers, sailing under the Venezuelan flag with Venezuelan crews replaced the smaller lake tanker and began to bring crude to Aruba.  They would take on a partial load in La Salina, leave the lake through the deeper channel, top off crude at Amuay, which had been delivered by the new pipeline, and then sail to Aruba with a full load.

 Lago Oil & Transport Co. Ltd., Aruba, N.W.I.  The Importance of 100 Octane Gasoline in Lago’s Development

&

  Management & Employee Relationship & Local Education

Now back to the development of the Aruba refinery.

    On April 30, 1932, a contract was entered into between Standard of Jersey and Standard of Indiana for the purchase of all foreign properties and American tankers that had once been owned by Pan American Petroleum As soon as Standard Oil of New Jersey purchased the refinery from Standard of Indiana they began to expand the refinery in Aruba. The reasoning behind expanding the refinery was primarily because Aruba was under control of the Dutch Government and considered a much more stable place for investment than was Venezuela.  Another reason was the location of Aruba in relationship to world markets.  As Europe was the primary market for Aruba product it is interesting to note that Aruba is closer to Europe than is the East Coast of the United States, thus it was cheaper to ship the product from Aruba to Europe than from the East Coast of the United States.  What is most important, Standard of New Jersey had marketing outlets in Europe, unlike Standard of Indiana, which had not marketing outlets in Europe.

   It is also interesting to note that in Chapter 5 of New Horizons, A History of the Standard Oil Co. (New Jersey) mention is made that the Standard Oil of New Jersey had a commitment to develop each new oil field in Venezuela with its own community and to provide housing and community facilities.  It goes on to say that as costly as this commitment proved to be, it was felt that it was necessary to keep people in underdeveloped countries.  Although nothing is said about the Colony in Aruba, this theory seems to have spilled over to Lago in Aruba because, as Standard Oil of New Jersey expanded and development the refinery it, also expanded Lago Colony and Lago Heights, as well as the housing that was built with loans guaranteed by Lago for the purchased by hourly employees in Essoville.

    Another very important reason for the expansion of the Aruba refinery was the development of the high compression aircraft engine.  During the middle 30's the US Army Air Corp. as well as the British Air Ministries were experimenting with high compression aircraft engines that required a 100-octane gasoline to make the engines efficient.  In 1936 it was the decision of the Army Air Corp. to adopt 100 octane gasoline for all combat planes.  It seems this decision was made before there was a means of making iso-octane in large quantity. 

    To produce this high (100) octane gasoline a process had been developed by Shell Oil, used hot sulfuric acid in a catalysis process.    This hot acid process produced a product, which was known as a copolymer.  The copolymer was then hydrogenated and this process doubled the ios-octane yield from the refinery. 

    At this same time the British Air Ministries were negotiating with Standard of New Jersey to supply them with the new 100 octane gasoline.  The negotiations for this purchase hinged on the 100 octane gasoline being produced and supplied from a facility that was not within the continental United States.  This was because of neutrality legislation in the US that would restrict the export of war materials in the event of war.  The Aruba refinery was under Dutch control and the British Air Ministry signed a contact with Standard Oil of New Jersey with the understanding that the Avgas facility would be built in Aruba and thus be exempt should the U. S.  impose an embargo on the export of war material, which Avgas would be considered to be.  As soon as the contract was signed, construction was begun on the copolymer and hydrogenation plants in Aruba.  The Aruba refinery now had the units with which to produce the 100 octane gasoline for the British.  This prewar construction set the stage for Lago’s role as a major supplier of high octane gasoline as well as other petroleum products to U. S. and Allied forces during World War II.

    The British Air Ministry had contracts for 100 octane gasoline from Esso and Shell, both supplying the gasoline from their refineries in the Dutch Caribbean as well as Standard-Vacuum Oil Company in Sumatra in the Dutch East Indies.  With Italy entering into the War on the side of Germany the Mediterranean became closed to traffic through the Suez Cannel, so the 100 octane from Sumatra had to be shipped around the horn of Africa.  Thus, the British became even more dependent on Aruba to supply them with 100 octane gasoline.  The Neutrality Act of 1937 also limited the sale of 100 octane gasoline on credit to the British. Britain was in short supply of cash so this Act cut off their supply of 100 octane gasoline from the United States.  This Neutrality act also restricted the use of tankers flying the U. S. Flag to carry war material.  For this reason Esso Shipping transfer many of theirs tankers to Panama Transport so it was able to transport petroleum products across the Atlanta to Britain.  Most of the ships that were transferred in 1939 had American crew.  Again American neutrality regulations forbade the employment of American Crew on the ships of a foreign registry so when the ships were transferred to the Panamanian flag the crews were replaced with Canadians, Norwegian and Danes.

    Beginning with the Battle of Britain in the summer of 1940, 100 octane aviation gasoline became one of the most important factors in the defense of the island. (Britain) That gasoline gave the British Spitfires and Hurricanes an advantage in combat over the German Luftwaffe, with its far larger number of planes but fuel of lower quality.  Geoffrey Lloyd, British Minister of Fuel and Power, later said;  “I think that without 100 octane we should not have won the Battle of Britain.  But we had 100 octane.”  100 Octane gasoline was described as the super fuel that meant more speed, more power, quicker takeoffs, longer range, & greater maneuverability that allowed the British planes to defeat the superior German Luftwaffe. 

    During the Battle of Britain, between August 8 and September 3, 1940, the Luftwaffe lost 1197 aircraft. The British lost planes.  From September 4 to the 30 the Germans lost 955 planes while the British only lost 267 planes.  No longer able to sustain the high loss of aircraft, the Germans switched to nighttime raids.  This reduced their losses but not the ration of German to British aircraft lost and they were not as successful in causing damage to the targets.  In November of 1940 the Germans sharply reduced their night raids on Britain.

    With the development of the catalectic cracking process, which is done by a massive unite, referred to as, The Cat Cracker,@  Lago in Aruba was selected as one of the three refineries to be fitted with this new unit.  Work on the Cat Cracker began in 1942 and the unit went on line December 1943, with a daily capacity of 14,000 barrels of 100/130 octane Avgas per day. 

    In the early 40's, with the advance of Germany into the countries of Europe, the markets of Lago’s production shipped to Europe dried up.  Notice the large drop in production for Lago in 1940.  As the battle of Britain raged, production increased and then fell in 1942.  This was due to two factors: 1) as the U. S. entered the war, but was still not completely tooled up for war, petroleum consumption dropped.  2) The drop in production at Lago in 1942 can also be attributed to the loss of the four lake tankers and the shortage of crude being delivered to the refinery. 

    As stated before, Standard of New Jersey and the Venezuelan Government had entered an agreement during World War II that would require Esso to build and refine crude in Venezuela and this agreement capped the export of crude to Aruba at 500,000 barrels per day.  Both New Horizons & Growth in a Changing Environment and Growth in a Changing Environment, state that this agreement stopped investment in improvements in the Aruba refinery after World War II.

    However Growth in a Changing Environment contradicts itself and states that after World War II the Aruba refinery continued to be improved,  with investments amounting to more than $60 million between 1949 & 1959 and another $64 million between 1959 & 1967.  Then between 1968 and the early 70's Standard Oil of New Jersey spent $260 million to install fuel oil desulfurization facilities to meet U.S. Environmental standards.  It further states that by 1975 Lago operated a complete and flexible fuel products refinery with a capacity of 500,000 barrels a day.  It consisted of crude and vacuum distillation, visbraking, allylation, naphtha fractionation, hydrogen plants and hydrofining/go-fining for desulphurization of naphthas, kerosene, gas oils, sulphur recovery, and a sulphuric acid manufacturing plant. This sounds like the refinery was kept up to date but not expanded beyond the 500,000 barrels per day production.

    A look at production figures, see Table 4, shows the rapid grown of the Aruba refinery and the magnitude of it size compared to other Standard Oil of New Jersey holding in the United States, Europe or the Eastern Hemisphere.  Aruba’s Lago Oil & Transport Co. Ltd. refinery was the largest the Jersey family from 1933 until 1950, (I have as yet not been able to find figures on actual production by the Aruba refinery after 1950, probably because they were fixed at 500,000 barrels per day).