The Pan American Petroleum and Transport Company (PAT) was an oil company founded in 1916 by the American oil tycoon
Edward L. Doheny
Edward Laurence Doheny (; August 10, 1856 – September 8, 1935) was an American oil tycoon who, in 1892, drilled the first successful oil well in the Los Angeles City Oil Field. His success set off a petroleum boom in Southern California, a ...
after he had made a huge oil strike in Mexico. Pan American profited from fuel demand during
World War I
World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
, and from the subsequent growth in use of automobiles. For several years Pan American was the largest American oil company, with holdings in the United States, Mexico, Colombia and Venezuela. In 1924 Pan American was involved in the
Teapot Dome scandal
The Teapot Dome scandal was a bribery scandal involving the administration of United States President Warren G. Harding from 1921 to 1923. Secretary of the Interior Albert Bacon Fall had leased Navy petroleum reserves at Teapot Dome in Wyomin ...
over irregularities in the award of a U.S. government oil concession.
Standard Oil of Indiana
Amoco () is a brand of filling station, fuel stations operating in the United States, and owned by BP since 1998. The Amoco Corporation was an American chemical and petroleum, oil company, founded by Standard Oil Company in 1889 around a oil re ...
obtained a majority stake in 1925. The company sold its foreign properties to
Standard Oil of New Jersey
ExxonMobil, an American multinational oil and gas corporation presently based out of Texas, has had one of the longest histories of any company in its industry. A direct descendant of John D. Rockefeller's Standard Oil, the company traces its root ...
in 1932. What was left of Pan American was merged with Standard Oil of Indiana in 1954 to form
Amoco
Amoco () is a brand of fuel stations operating in the United States, and owned by BP since 1998. The Amoco Corporation was an American chemical and oil company, founded by Standard Oil Company in 1889 around a refinery in Whiting, Indiana, a ...
.
Origins
Edward L. Doheny was a prospector who became wealthy in the 1880s from silver mines in the
Black Range
Black is a color which results from the absence or complete absorption of visible light. It is an achromatic color, without hue, like white and grey. It is often used symbolically or figuratively to represent darkness. Black and white have o ...
of New Mexico.
In 1892 he moved with his family to
Los Angeles
Los Angeles ( ; es, Los Ángeles, link=no , ), often referred to by its initials L.A., is the largest city in the state of California and the second most populous city in the United States after New York City, as well as one of the world' ...
, where he sank a mine and found oil at the corner of Patton Street and West State Street.
This began an oil boom in Los Angeles. Doheny overextended himself and his company went bankrupt in August 1896.
The setback was temporary, and a long-term contract with the
Atchison, Topeka and Santa Fe Railway
The Atchison, Topeka and Santa Fe Railway , often referred to as the Santa Fe or AT&SF, was one of the larger railroads in the United States. The railroad was chartered in February 1859 to serve the cities of Atchison, Kansas, Atchison and Top ...
gave him the opportunity to develop and expand a growing number of oil properties.
In 1900 he visited Mexico with his associate
Charles A. Canfield
Charles Adelbert Canfield (May 15, 1848 – August 15, 1913) was an American oilman and real estate developer. He pioneered oil drilling in California and Mexico. He also co-founded Beverly Hills and Del Mar, California.
Early life
Charles Adelbe ...
and Almon Porter Maginnis of the Santa Fe railroad,
saw the oil potential of the country near
Tampico, Tamaulipas
Tampico is a city and port in the southeastern part of the state of Tamaulipas, Mexico. It is located on the north bank of the Pánuco River, about inland from the Gulf of Mexico, and directly north of the state of Veracruz. Tampico is the fifth ...
and began acquiring property.
Doheny found heavy oil in El Ebano in 1901, which he exported to the United States for use in paving.
He formed the
Mexican Petroleum Company and funded it with $6 million of his own money.
In 1905 he bought properties near
Tuxpan, Veracruz
Tuxpan (or Túxpam, fully Túxpam de Rodríguez Cano) is both a municipality and city located in the Mexican state of Veracruz. The population of the city was 78,523 and of the municipality was 134,394 inhabitants, according to the INEGI census o ...
, and formed the Huasteca Petroleum company to hold them.
In 1910 his wells in the Juan Casiano Basin in the Faja de Oro field started to produce good quality oil.
The gusher at Casiano number 7 spewed out 60,000 barrels a day, and by 1918 had delivered over 85 million barrels of oil.
In 1911 Doheny signed a contract to supply
Standard Oil
Standard Oil Company, Inc., was an American oil production, transportation, refining, and marketing company that operated from 1870 to 1911. At its height, Standard Oil was the largest petroleum company in the world, and its success made its co-f ...
.
Doheny's Mexican Petroleum Company made a major strike in February 1916 with the Cerro Azul No. 4 well in
Cerro Azul, Veracruz
Cerro Azul is a city in the Mexican state of Veracruz. Located in the state's Huasteca Baja region, it serves as the municipal seat for the surrounding municipality of the same name.
In the 2005 INEGI Census, the city reported a total popu ...
, Mexico.
When the well struck it shot a stream of oil into the air. It became world's largest, pumping 260,000 barrels per day. Over the next fourteen years the well produced over 57 million barrels.
The Mexican Petroleum Company eventually acquired ownership or leasehold rights to of land.
Expansion
The Pan American Petroleum and Transport Company was incorporated by Doheny in Delaware in 1916 as the holding company for his
Mexican Petroleum Company,
Huasteca Petroleum Company and California oil properties.
World War I
World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
drove up demand for oil-fueled transport, and Doheny responded by expanding pumps, tanks and loading sites in Tampico. By July 1917 Pan American had a fleet of 31 tankers. The company paid $1.1 million in dividends in 1917 and $3.1 million in dividends on its common stock in 1918.
1918 revenues were $17 million and net profits were almost $7 million.
In 1918 the
Carib Syndicate, a concern owned by Americans, bought the
Barco oil concession
The Barco oil concession was one of the main concessions in Colombia during the early development of its petroleum industry, the other being the De Mares concession.
Oil was first found in the Norte de Santander department near the border with Vene ...
in Colombia.
They sold 75% of their interest to the Colombian Petroleum Company the next year, a subsidiary of Pan American.
Doheny was also interested in plans to develop the oil industry in Venezuela, and in building a pipeline from Colombia to Venezuela to make it more economical to export the
Barco oil production from the west coast of
Lake Maracaibo
Lake Maracaibo (Spanish: Lago de Maracaibo; Anu: Coquivacoa) is a lagoon in northwestern Venezuela, the largest lake in South America and one of the oldest on Earth, formed 36 million years ago in the Andes Mountains. The fault in the northern se ...
.
In 1921 Pan American was the largest oil company in the United States, ahead of
Sinclair Consolidated Oil Corporation
Sinclair Oil Corporation was an American petroleum corporation, founded by Harry F. Sinclair on May 1, 1916, the Sinclair Oil and Refining Corporation combined, amalgamated, the assets of 11 small petroleum companies. Originally a New York corp ...
and the
Standard Oil Company of Indiana
Amoco () is a brand of fuel stations operating in the United States, and owned by BP since 1998. The Amoco Corporation was an American chemical and oil company, founded by Standard Oil Company in 1889 around a refinery in Whiting, Indiana, an ...
. Automobile production was booming and oil prices were high.
The Mexican Petroleum Company was the largest in Mexico, and Mexico was the largest oil producer in the world.
![Edward DohenyLawyer](https://upload.wikimedia.org/wikipedia/commons/0/01/Edward_DohenyLawyer.jpg)
In 1922
Albert B. Fall
Albert Bacon Fall (November 26, 1861November 30, 1944) was a United States senator from New Mexico and the Secretary of the Interior under President Warren G. Harding, infamous for his involvement in the Teapot Dome scandal; he was the only pers ...
, U.S. Secretary of the Interior, leased the oil field at Elk Hills, California, to the Pan American Petroleum & Transport Company.
Around the same time, the
Teapot Dome Field in
Wyoming
Wyoming () is a U.S. state, state in the Mountain states, Mountain West subregion of the Western United States. It is bordered by Montana to the north and northwest, South Dakota and Nebraska to the east, Idaho to the west, Utah to the south ...
was leased to Sinclair Consolidated Oil Corporation.
Both oilfields were part of the US Navy's petroleum reserves. Neither lease was subject to competitive bidding.
In 1924 rumors about corruption in the deals escalated into the
Teapot Dome scandal
The Teapot Dome scandal was a bribery scandal involving the administration of United States President Warren G. Harding from 1921 to 1923. Secretary of the Interior Albert Bacon Fall had leased Navy petroleum reserves at Teapot Dome in Wyomin ...
.
On 24 January 1924 Doheny testified before the U.S. Senate Committee on Public Lands and Surveys, and admitted that he had loaned Fall $100,000 in cash with no security some months before the oilfield leasing arrangement was made. Doheny said the loan was a personal one.
Pan American had been the lowest bidder for a contract to build and fill crude oil storage facilities at
Pearl Harbor
Pearl Harbor is an American lagoon harbor on the island of Oahu, Hawaii, west of Honolulu. It was often visited by the Naval fleet of the United States, before it was acquired from the Hawaiian Kingdom by the U.S. with the signing of the Re ...
,
and had offered to undertake this contract in exchange for the oilfield lease,
being paid in oil and then paying royalties to the government for oil extracted in excess of costs.
Eventually the Supreme Court nullified both leases.
It was not until 1930 that Doheny was cleared of all charges.
In 1923
Louis Blaustein
Louis Blaustein (January 16, 1869 in Pikeliai, Lithuania – July 27, 1937 in Atlantic City, New Jersey) was an American businessman and philanthropist who founded the American Oil Company (AMOCO).
Biography
Blaustein was born in Lithuania ...
and his son
Jacob Blaustein
Jacob Blaustein (September 30, 1892 – November 15, 1970) was an American entrepreneur, philanthropist, and diplomat who founded the American Oil Company with his father Louis Blaustein. Blaustein was an ardent supporter of human rights, the ...
sold a half interest in their
American Oil Company
Amoco () is a brand of fuel stations operating in the United States, and owned by BP since 1998. The Amoco Corporation was an American chemical and oil company, founded by Standard Oil Company in 1889 around a refinery in Whiting, Indiana, an ...
to Pan American in exchange for a guaranteed supply of oil.
Before this deal, American Oil had depended on
Standard Oil of New Jersey
ExxonMobil, an American multinational oil and gas corporation presently based out of Texas, has had one of the longest histories of any company in its industry. A direct descendant of John D. Rockefeller's Standard Oil, the company traces its root ...
, a competitor, for its supplies.
At the end of 1923 Pan American had a net worth of $173 million, with net earnings that year of over $20 million.
The company paid dividends of $20.4 million that year.
Amoco subsidiary
On 1 April 1925 the California assets of Pan American Petroleum and Transport were transferred to a new holding company, the Pan American Western Petroleum Company,
in which Doheny retained control. He sold a majority of shares in the remainder of the Venezuelan facilities of the Pan American Petroleum and Transport Company and his Mexican Petroleum Company to Pan American Eastern Petroleum, a new subsidiary of
Standard Oil of Indiana
Amoco () is a brand of filling station, fuel stations operating in the United States, and owned by BP since 1998. The Amoco Corporation was an American chemical and petroleum, oil company, founded by Standard Oil Company in 1889 around a oil re ...
.
This included the Mexican holdings, Atlantic and Gulf Coasts holdings in the United States, refineries, pipelines and 31 tankers.
At the end of 1925 Pan American Western gained control of
Lago Petroleum Corporation
Lago Petroleum Corporation was an oil production company established by Americans in 1923 that exploited the oilfields in Lake Maracaibo.
It was acquired by Standard Oil of New Jersey in 1932. Later it was nationalized.
Ownership
Edward L. Dohen ...
from
C. Ledyard Blair
Clinton Ledyard Blair (July 16, 1867 – February 7, 1949) was an American investment banker and yachtsman.
Early years
Blair was born in Belvidere, New Jersey, on July 16, 1867. He was the son of DeWitt Clinton Blair, a philanthropist and ind ...
's Blair & Co..
The transaction was to be the subject of a stockholder action in 1933, alleging that there had been a conspiracy by the bankers, who were represented on the Pan American board, to make excessive profits.
In 1926 Venezuelan Eastern Petroleum Corporation was organized as a subsidiary of Pan American Eastern with the purpose of buying and developing Venezuelan oil properties.
The Turkish Petroleum Company discovered a large oil field in Iraq in 1928. France, the United Kingdom, and the United States were each worried about being edged out by the other two. The
Red Line Agreement The Red Line Agreement is an agreement signed by partners in the Turkish Petroleum Company (TPC) on July 31, 1928, in Ostend, Belgium. The agreement was signed between Anglo-Persian Company (later renamed British Petroleum), Royal Dutch/Shell, Compa ...
gave the
Near East Development Corporation
NEAR or Near may refer to:
People
* Thomas J. Near, US evolutionary ichthyologist
* Near, a developer who created the higan (emulator), higan emulator
Science, mathematics, technology, biology, and medicine
* National Emergency Alarm Repeate ...
, the
Anglo-Persian Oil Company
The Anglo-Persian Oil Company (APOC) was a British company founded in 1909 following the discovery of a large oil field in Masjed Soleiman, Persia (Iran). The British government purchased 51% of the company in 1914, gaining a controlling number ...
,
Royal Dutch Shell
Shell plc is a British multinational oil and gas company headquartered in London, England. Shell is a public limited company with a primary listing on the London Stock Exchange (LSE) and secondary listings on Euronext Amsterdam and the New Yo ...
, and the
Compagnie Française des Pétroles
TotalEnergies SE is a French multinational integrated energy and petroleum company founded in 1924 and one of the seven supermajor oil companies. Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and ...
each 23.75% of any oil that was produced by the Turkish Petroleum Company.
The Near East Development Corporation (NEDC) represented American interests and included Jersey Standard Oil, Socony-Vacuum Oil Company, Gulf Oil, the Pan-American Petroleum and Transport Company, and Atlantic Refining. The remaining 5% share went to an Armenian businessman,
Calouste Gulbenkian
Calouste Sarkis Gulbenkian (, Western hy, Գալուստ Կիւլպէնկեան; 23 March 1869 – 20 July 1955), nicknamed "Mr Five Per Cent", was a British-Armenian businessman and philanthropist. He played a major role in making the petrole ...
, who had previously owned shares within TPC.
Pan American sold out its shares in NEDC to Jersey Standard and Socony (later
Mobil
Mobil is a petroleum brand owned and operated by American oil and gas corporation ExxonMobil. The brand was formerly owned and operated by an oil and gas corporation of the same name, which itself merged with Exxon to form ExxonMobil in 1999.
...
) in 1930.
In 1932 Pan American sold its foreign properties to
Standard Oil of New Jersey
ExxonMobil, an American multinational oil and gas corporation presently based out of Texas, has had one of the longest histories of any company in its industry. A direct descendant of John D. Rockefeller's Standard Oil, the company traces its root ...
for about $100 million.
With this acquisition, Standard Oil of New Jersey became Mexico's largest oil producer.
The deal also included large oil concessions in Venezuela and Pan-American's UK subsidiary Cleveland Petroleum Products.
However, a few years later the Mexican properties were nationalized.
President
Lázaro Cárdenas
Lázaro Cárdenas del Río (; 21 May 1895 – 19 October 1970) was a Mexican army officer and politician who served as president of Mexico from 1934 to 1940.
Born in Jiquilpan, Michoacán, to a working-class family, Cárdenas joined the M ...
expropriated all foreign oil concessions on 18 March 1938 and placed them under the government-controlled
Pemex
Pemex (a portmanteau of Petróleos Mexicanos, which translates to ''Mexican Petroleum'' in English; ) is the Mexican state-owned petroleum company managed and operated by the Mexican government. It was formed in 1938 by nationalization and expr ...
, paying compensation to the former owners.
In the 1940s the case of ''Blaustein v. Pan American Petroleum & Oil Transport Co.'' was heard by the Supreme Court to determine whether the directors of Pan American had been in breach of their fiduciary duty.
The directors were all officers of directors of Standard Oil of Indiana, which held almost 80% of Pan American's shares, and it was charged that they had deprived Pan American of profitable opportunities to drill and refine oil.
The majority finding, setting an important precedent, was that it should be assumed that they had acted in good faith and without personal gains to themselves.
In 1954 Pan American merged with Standard of Indiana to form the American Oil Company,
Amoco
Amoco () is a brand of fuel stations operating in the United States, and owned by BP since 1998. The Amoco Corporation was an American chemical and oil company, founded by Standard Oil Company in 1889 around a refinery in Whiting, Indiana, a ...
.
Amoco was in turn acquired by
British Petroleum in 1998.
In popular culture
The novel ''
Oil!
''Oil!'' is a novel by Upton Sinclair, first published in 1926–27 and told as a third-person narrative, with only the opening pages written in the first person. The book was written in the context of the Harding administration's Teapot Dome Sca ...
'' by
Upton Sinclair
Upton Beall Sinclair Jr. (September 20, 1878 – November 25, 1968) was an American writer, muckraker, political activist and the 1934 Democratic Party nominee for governor of California who wrote nearly 100 books and other works in seve ...
published in 1927 is loosely based on Doheney's life and the story of Pan American.
''Oil!'' was in turn the inspiration for the 2007 film ''
There Will Be Blood
''There Will Be Blood'' is a 2007 American historical drama, period drama film written and directed by Paul Thomas Anderson, loosely based on the 1927 novel ''Oil!'' by Upton Sinclair. It stars Daniel Day-Lewis as Daniel Plainview, a Silver mini ...
''.
A photo by Walker Evans in Let Us Now Praise Famous Men of a post office in Sprott, AL shows a Pan-Am pump.
References
Citations
Sources
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{{DEFAULTSORT:Pan American Petroleum and Transport Company
Defunct oil companies of the United States
Non-renewable resource companies established in 1916
Non-renewable resource companies disestablished in 1954