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Industrial War. This week Getty has his own forces deployed for an industrial war as challenging as Waterloo. Part of his problem is the problem of the entire oil industry: a drop-off in demand for petroleum products that has created an oil surplus, production cutbacks and slipping prices. But the oil industry's knottiest problem—and Getty's crucial one—is imports. The U.S. Government's "voluntary" quotas on imports of crude have not cut them enough to satisfy independent U.S. producers, and the Government is being pressured to cut imports further or introduce mandatory quotas.
The squeeze on imports could not have come at a worse time for Getty. The bulk of his oil reserves lies in the Middle East, where he is the only individual operator in the same league with the big oil companies. From the wells of the Neutral Zone, 100,000 bbl. of oil gush daily from beneath the golden sands, and 5 billion more in proven reserves lie under the surface (nearly one-sixth as much as all U.S. reserves, but much less than the "tens of billions" Getty says will eventually be proved up in the zone). To move his share of this flow (50%), Getty has already built seven supertankers, has 16 more abuilding and on order in shipyards in France and Japan; by the time he has finished, his fleet will be one of the world's biggest, worth well over $200 million. Most important of all, Getty scrapped Tidewater's huge, outmoded refinery in Bayonne, N.J. and in its place built the world's most modern refinery (cost: $200 million) 15 miles south of Wilmington, Del. But Tidewater's import quota for the refinery, under the voluntary program, was set at only 34,200 bbl. daily—less than half of what it needs to operate efficiently—v. the 84,600 bbl. that Tidewater had scheduled.
Good Prospect. Most oil companies are obeying the voluntary quotas for fear the Government will make them mandatory. But not Getty. He has flouted the system, stirred up bitterness and resentment among his competitors (who are beating the quotas themselves by increasing imports of refined products) by keeping Tidewater's crude imports to an average of 64,100 bbl. a day—almost 100% over quota. Getty realizes that as long as the rest of the industry toes the mark—and thus keeps overall imports under the overall quota—the Government is helpless to force Tidewater alone to conform, since it cannot make the quota mandatory for only one company.
Getty is also getting ready to protect himself abroad while battling quotas in the U.S. He has just finished a $5,000,000, 50,000-bbl.-a-day refinery near his Wafra oilfield in the Neutral Zone, has an option on a building site in West Germany's Ruhr, where he is planning to build a $12 million refinery. Getty's Wafra oilfield produces a sour crude that is ideal for heavy fuel oil, and Getty plans to channel 85% of his production to fuel-hungry Europe, leave his Tidewater refineries to depend on U.S. crude if quotas are stiffened. Getty is convinced that he has outflanked not only the Government and his competitors but the oil glut as well. "All in all," he chuckles, "I would say that the prospect is very good."