25 Years of Refining at Lago

Lago Oil & Transport Company, Limited

Aruba, Netherlands West Indies

Published January 1954

.The following was transcribed by Stan Norcom from the original publication
Introduction (p.6)
In December, 1928, as construction of the Lago refinery neared completion,
Aruba’s population was small. Fishing, hat-making, and the growing of aloes were the chief industries. Aruba’s 10,000 citizens had been content with a life in which there had been few changes from one decade to the next.
Lago itself, although it displayed the hustle of heavy construction, was a baby in both age and size in December, 1928. It had only the newly opened harbor with one narrow entrance, a handful of storage tanks, a few small ships to fill them with oil, eight topping stills almost completed, and construction of eight cracking stills just begun. Built on the barren coral of Aruba’s easternmost point, 2,000 miles from its source of food, water, and equipment, 150 sea miles from the oil it would refine, its great future was impossible to foresee.
Twenty-five years later Lago has become the world’s largest petroleum refinery; it includes a shipping operation so large that its harbor ranks in tonnage with the world’s greatest; its employees form a community whose members make up nearly half the island’s population, and who hail from places as diverse and distant as Singapore and Chicago and Guadeloupe.
This is Lago’s story, told as it rounds out a quarter-century, from the first small gush of oil into the new stills in January, 1929, to the 428,000-barrell daily flood of January, 1954.
The Beginnings (p.9,10,11))
The Lago Oil & Transport Company, Ltd., was a corporation organized in Canada in 1924, which later became a subsidiary of the Pan American Petroleum & Transport Company. In Lago’s first year Captain Robert Rodger and two associates were sent into the Paraguana-Curacao-Aruba triangle to find a shipping terminal for oil being produced at Lake Maracaibo, Venezuela, by the Lago Petroleum Corporation, another Pan Am subsidiary. In August, 1924, after exploring the possibilities at the first two sites, they visited Aruba. For two weeks they studied the problem of dredging a channel through a narrow break in the reef that connected the bay with the sea. San Nicolas was their choice, and dredging began late in 1925.
A channel first had to be cut through the reef (now the east entrance) and a great amount of dredging was needed to deepen the bay for ships ht would draw 25 feet of water when loaded. Work was begun of eight 70,000-barrell storage tanks and on a main dock. (This was the "T-dock," dismantled in 1950 to make way for two modern finger piers.)
Meantime, two small ships were sent out from England to haul crude oil form Lake Maracaibo. One, the Francunion, eventually was returned to Europe for harbor bunkering duty, and had honorable service there in the last war. The second, the Inverampton, shows only as a cross on the charts of the Maracaibo sand bars, where it was lost in 1928. The Invercorrie was added in 1925, and four chips of the Inverlago class were added the following year. These ships loaded crude in Lake Maracaibo and discharged it into a depot ship at Oranjestad, which in turn pumped it into other tankers for ocean transport.
Lago’s harbor officially began its career as a great oil port November 17, 1927. Two ocean tankers and five lake tankers entered the first day. San Nicolas, a lonely expanse of cactus and low shrubs, and once a haven for fishing smacks and sailing vessels in the early phosphate trade, was never the same again. Industry and world trade had come to stay.
The pre-refinery operating staff at San Nicolas lived in twelve frame houses that are still in use. It was not an easy life. In the words of Captain Rodger, "Fresh meats, fruits, and vegetables were unknown and most edibles were to be found only in cans, but occasionally small luxuries were brought over by the lake tankers from Venezuela. Ice was brought from Curacao in barrels. Chickens provided the main staple of diet, and could be purchase at Fls. 40c to 50c each. Eggs were a penny or two each."
The year 1928 brought more deep and permanent changes to Aruba’s landscape and life. In July, 1927, a plan to build a refinery somewhere in the Maracaibo area for processing Venezuela crude was being considered. An inspection group, including Paul H. Harwood, Thomas S. Cooke, Lloyd G. Smith, and Donald J. Smith, visited Maracaibo and Aruba in August, 1927.
In years to come, each of these pioneers continued in close association with the enterprise they launched. Mr. Harwood became an executive in marine activities, Mr. Cooke in refining. D.J. Smith directed construction at Aruba, L.G. Smith was Lago refinery’s general manager from the early thirties until 1946.
Again Aruba was the choice. From the top of a water tower in the harbor area these men looked at the transshipping station, only a little cluster of tanks, houses, and sheds huddled next to San Nicolas Bay, with barrenness beyond. But in their mind’s eye they saw rows of stills, acres of storage tanks, pipelines, warehouses, shops, hospital and schools, and a settled community of homes. During the return trip to New York planning began for the original plant construction.
San Nicolas continued to operate as a transshipping depot for crude oil through 1928, loading four or five ships a week with oil brought in the steadily increasing number of lake tankers. During one high point of the year the station loaded a ship a day for 100 days.
Final approval for the refinery came in February, 1928, and the first men arrived February 24 to build bunkhouses for the construction forces.
Donald J. Smith years later recalled the delays, inadequate equ9ipment, labor and housing shortages, difficulties in securing sufficient food and water, and countless other complications that went with a pioneering operation nearly 2,000 miles from sources of supply. A report he wrote tells the end of the refinery’s first phase:
"All of the energy of the original construction force was devoted to the construction and completion of the powerhouse and topping stills. The powerhouse started in December, 1928, and the topping stills in January, 1929, and while the operation was somewhat ragged, the plant had actually started to earn money."
January 29, 1929 is recorded as the first day on which the stills were operated.
Over a hundred men who were with Lago when the first barrel of oil was processed were still with Lago twenty-five years later as the 2,234,000,000th barrel went through the plant. How the earliest employees lived and worked, as seen in the reminiscences of a few, best shows the vast changes that have taken place in Lago and in Aruba.
{Aruba operations had been taken over by the Standard Oil Company of Indiana, through acquisition of the Pan American Petroleum & Transport Company. In 1932 the Aruba installation was purchased by the Standard Oil Company (New Jersey) and resumed the original "Lago" name.} p.15
48 Pages in all
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