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Pioneering. One of the reasons Gulf was willing to part with the Barco concession was that that oil company has no heavy stake in foreign markets and plenty of production elsewhere to supply its retail distribution in the U. S. Gulf and the Mellons were not eager to continue development on a big scale. Moreover, the Barco had long since become a sore subject with Gulf and the Mellons, partly because of the prolonged wrangle with the Colombian Government, partly because old Mr. Mellon deeply resented the charges that he had used his high office to further private ends. In Congressman Wright Patman's single-handed attempt to impeach Mr. Mellon just before the Secretary of the Treasury was made U. S. Ambassador to the Court of St. James, it was hinted that a dinner conversation in Washington between Mr. Mellon and the President of Colombia and the settlement of the Barco dispute occurred suspiciously close together (TIME, Jan. 25. 1932). Last week Pittsburgh construed the Barco deal as a case of one oil company unloading a "hot" concession on two others.
Texaco's Rieber and Socony's Brown would hardly subscribe to that theory. Development of a concession like the Barco takes big money. A pipeline to the coast may cost $12,000,000 alone. It will have to be laid through thick jungle, will rise to nearly 5,000 ft. through a pass in the spur of the Andes where there are neither roads nor railroads. To get into the Barco at present, oilmen either fly to Bogotá, motor to Cúcuta and take the Cúcuta R. R. to the property, or take a boat up the Catatumbo River to the northern terminus of the railroad. Standard Oil of New Jersey spent $52,000,000 on its De Mares Concession before it delivered a barrel of oil, has since invested an additional $42,000,000. To get real oil out of the Barco may require $50,000,000.
Exploitation of Venezuelan oil was relatively simple, except in Royal Dutch Shell's Colón Concession, because the wells were either in the water or at the water's edge. Venezuela's late Dictator Juan Vicente Gomez refused to have the bar dredged at the entrance to Lake Maracaibo for fear unfriendly gunboats might some time nose in. Gulf, Standard and Royal Dutch solved the shipping problem by designing special shallow-draft tankers which leave Lake Maracaibo in long lines each day to catch high tide at the bar. Gulf transships to regular tankers at a big terminal on the Paraguana Peninsula. Standard and Royal Dutch fleets go to their respective island refineries at Aruba and Curaçao, in the Dutch West Indies, where politics are European, not Latin American.
Oil from the Barco by the terms of the concession must leave through a Colombian port, probably near Barranquilla. The oil is already there. Gulf brought in eleven wells which are now shut in, and drilling will continue. At the southern end of the concession commercial production has been found at less than 500 ft., though at the northern end the wells may run as deep as 6,500 ft. (In California "wells are now going down more than 10,000 ft.) General Barco merely dug pits for his oil, once struck seepage with a posthole digger.