Andreina Kock handed in this paper for her final report for the Social Cultural History course she is taking at the Universidad di Aruba.  Andreina is a student majoring in the Hospitality and Tourism Management program.  Andreina is the daughter of Mr. Dolfi Kock who has contributed much to the website and whom I personally met and had lunch with while at the 2006 Aruba Reunion.  Dolfi is a cousin to Dufi Kock, who also has contributed to the web site. 

The report was edited by her uncle, Dufi Kock.
Here is that report
THE BEGINNING OF LAGO

BY

ANDREINA KOCK

Table of Contents

 

Introduction.

Chapter 1: Research Objectives.

Chapter 2: The Beginning of LAGO..

Chapter 3: Education.

Chapter 4: Building of a New Community.

Chapter 5: World War II

Chapter 6: Economy Growth on the Whole Island.

Chapter 7: The Impact on the Culture.

Chapter 8: The Developments After the Closing of LAGO.

Conclusion.

References.


Introduction

In this report I will be addressing the envelopment and development that took place during the LAGO Period, which is also called the Black Gold Period. During this period, many changes went on in Aruba. Moreover, these changes influenced the culture and the living standards of locals on the island. The economy increased a lot since the opening of the refinery, which provided an opportunity for locals to have better living conditions.

However, the question remains whether the starting of the refinery in Aruba brought mostly envelopments or developments.

                                                                                  

Chapter 1: Research Objectives

This report will elaborate the job opportunities that were offered to locals, the education provided, and the immigration that came to Aruba. It will also elaborate on the changes that were brought through the building of the community at Seroe Colorado and the effect on the economy that the refinery brought to Aruba. The impact that the refinery had on the culture is an issue that will also be addressed.

The report will cover issues from the time the unanimous decision was made to start a refinery on the island until the closing of it. I will show all the innovations that took place throughout the period of LAGO and the effect they had on the community, whether they are development or envelopment, or whether they were envelopment but eventually became development.

                                                                                             

Chapter 2: The Beginning of LAGO

In 1924, the LAGO Petroleum Corporation, a producing company in Lake Maracaibo, sent Captain Robert Rodger and Mr. J. O. Boyd to find the most suitable terminal either in  Curacao, Paraguana, Aruba, or any other place that would offer possibilities for future expansion.

After investigating some places, they came to a unanimous decision that San Nicolas Bay in Aruba was the best place. In October 1924, Pan American Petroleum and Transport Company officially decided in building the refinery on the island of Aruba. LAGO Oil and Transport Co. Ltd was the first refinery on the island. The name LAGO stands for the Lake Maracaibo in Venezuela, because the entire operation on the island depended on the fleet little takers that carried the crude from Lake Maracaibo through the shallow channel of Aruba. (http://www.lago-colony.com/index.htm)

The San Nicolas harbor officially opened in November 1927. However, soon after the building of the transshipment in San Nicolas, Standard Oil of Indiana started purchasing stock interest in Pan America Petroleum, which after a while was the largest stock holder in it. It is because of this that they provided all the technical and supervisory personnel, and they brought their people from their own state side facilities.

The construction started in May 1928 and by January 1, 1929 the first refinery units were in operation. However, after some issues that Standard Oil of Indiana had to deal with and the possibility of import tax on foreign crude imported into the United States, they decided to sell the refinery. Standard Oil of New Jersey was the purchaser. (Aruba Esso News, 1969)

It was envelopment from the moment the decision was made to start a refinery on the island, because it was something that was made from the outside to bring into the inside. The effect was that it would be economically shaped from the outside. However, from the moment it was brought on the island, the locals saw the chance of development. The refinery became part of the island and in cooperation of it the island developed in a way that made history. (http://www.lago-colony.com/index.htm)

The opening of the refinery provided many job opportunities for locals. It offered the possibility for creating a better life, which was a development. They applied for jobs at the refinery, because of the benefits that they saw in it. Moreover, they realized the chance to actually afford having a family, and to provide education for their children at home. Before the refinery, Aruba was known as a very poor island. The Yellow Period, which was the time that gold was found on the island, did not last long and poverty came back quickly. The increase in the economy was a matter of importance for the locals, and many saw the opportunity of a refinery as a sign for a chance of better living standards.

 

Chapter 3: Education

A large percentage of workers were from outside the Caribbean area, and the majority of them filled most of the skilled positions because of their language and experience, giving the locals and other islanders the unskilled positions. This matter brought resentment by the locals and they started to manifest. It was because of this opposition that LAGO started with educational programs, in order to improve the knowledge and experience of the locals. In 1935, LAGO started its vocational training, which was called the Apprentice Training Program. In later years it became the LAGO Vocational School (LVS), which was a four year curriculum. It provided classes and on-the-side training for carpenters, pipe fitters, tinsmiths, and operating personnel. It was discontinued in 1957, still 954 Aruban boys graduated from the LVS, giving them many positions at Lago ranging from supervisors to well-qualified tradesmen. After that, three programs were developed to help the locals. The first one was formed that same year, which was the LAGO Scholarship Foundation. The second one was the LAGO Educational Assistance Program (LEAP) in 1962, and the last one was the LAGO Special Educational Program for Outstanding Students formed in 1966. Through these three programs LAGO helped numerous locals to graduate from colleges or universities in the U.S. and The Netherlands. (Aruba Esso News, 1969)

All the education that was offered by LAGO was development in Aruba. It was not an obligation to take part in these programs, but the locals saw the opportunity to improve and to develop. They took the opportunity and made enhancements in their lives. With the education they received they knew that they would grow and become better and wiser people. (http://www.lago-colony.com/index.htm)

 

Chapter 4: Building of a New Community

In 1938, a hospital was built north east of the refinery area, but later on it was moved to a hill near Seroe Colorado Point. It was a modern three-story wing with a capacity of 120 beds. It was inaugurated in 1953. The modernization of the building was envelopment, since Aruba was a traditional island. However, it provided locals who worked at the refinery together with their families the opportunity for a better health care. With more that 150000 medical assistances, locals became more aware of their health. The majority of nurses were from Aruba, and the doctors from The Netherlands and United States. The hospital was an external factor that ones it came on the island it became an internal factor. The idea was not originally from Aruba, it was part of LAGO. However, once it was brought in, people accepted it and it immediately became a development. The locals saw the positive things that it had for them and took it as something of which they would benefit from. (http://www.lago-colony.com/index.htm)

The refinery also started with a Home Building Foundation in 1939. However, it did bring both envelopment and development. It was development, because a large amount of houses were built for the workers of the refinery. Over 4000 employees obtained a house through this foundation, scattered all over the island.

In April 29, 1953 the Lago Sport Park was inaugurated. It was a sport park that was built for the community in San Nicolas and Aruba itself.

Yet it is also envelopment because of the community that was built in Seroe Colorado, which was called the Colony. It was applied to only the immigrants who came to work at the refinery, especially, if not only Americans. Several bungalows and houses were built. Bachelor quarters, dining halls, clubhouses, and sports complex were also constructed. A Protestant church was also built in the Colony for the ones living there. The Colony became something that was completely non-traditional on the island. Furthermore locals had limited access to this area. To enter the Colony, locals were required to have a LAGO pass, and that was basically attained only for the workers of the refinery. That area of the island became a separate part of Aruba, with people having their own culture, beliefs, norms, and values. (http://www.lago-colony.com/index.htm)

 

Chapter 5: World War II

Another factor that played a huge role in the history of Aruba was the World War II. Soon after the war broke out in Europe on September 3, 1939, LAGO started supplying petroleum products for the Allies. However, when German troops moved into The Netherlands and Belgium, The Netherlands Antilles were declared in state of war with Germany. In September 1940, the British Queen sent her own Cameron Highlanders to protect the island and the refinery in case German troops attack. They remained in Aruba until February 13, 1942 and went back to Britain. Meanwhile some ships had been sunk by U-boats in the Caribbean, and soon the U.S. Army Air Forces established squadrons of bombers and fighters in Aruba. (http://www.lago-colony.com/index.htm)

On February 16, 1942, at 1:21 in the morning Aruba saw the real war action, the German U-boat 156 attacked the island. The explosion hit the lake tanker “Pedernales” anchored off the reef outside the San Nicolas Harbor. After a few minutes the lake tanker “Oranjestad” was hit. That same night lake tankers “Tia Juana” and “San Nicolas” were sunk, with numerous loss of lives. The aim afterwards was to destroy the largest refinery in the world. However, there was an explosion on the deck of the U-boat and the dick gunner failed to remove the plug from the end of the cannon barrel, which made it impossible to attack the refinery. After this, the refinery and the rest of Aruba stayed for several days in complete darkness. (Aruba Esso News, 1969)

Consequently, there was much destruction at the refinery. Therefore, huge projects came to the plan in order to repair all the damage that had been caused, an example was the Harbor Reconstruction Program was formed.  From these programs, a two-story High School was built, one of the Labs and the General Office Building were also extended. It was a period of consolidation and improvements for the refinery. LAGO had over 7000 employees at that time in order to achieve the projected goals.

Since the refinery was part of the Standard Oil of New Jersey, and in the beginning of the war U.S. was not part of the World War II yet, they supplied oil to the Allies, which in a way is envelopment. It was a decision that was made by the Americans to help the others. After the attack, when the construction started to take place was development, the refinery was getting larger, and more people were recruited. Not only did they repair the damage that the U-boat left behind, but they extended the refinery, as mentioned above. (http://www.lago-colony.com/index.htm)

 

Chapter 6: Economic Growth on the Whole Island

Another aspect in the history of the refinery is that not only did the refinery succeeded economically, but also other companies around the island. One of the companies for example was the air and ship transport. The air transport, which was formerly called Dakota Vliegtuig Maatschappij, became a successful income for the island. Since there was a large amount of travelers coming to the island to work or to do business at the refinery, revenue of air transport increased dramatically. As for the Ship Transport, the Paardenbaai, which is the harbor of Oranjestad, was everyday full with ships coming from Venezuela, Colombia, Santo Domingo, Suriname and so forth. They would bring in fruits and vegetables to sell on the island. This is where they started with the selling of fruits and vegetables along the streets of Aruba. (Dr. J. Hartog, 1961)

This severe increase in the economy of Aruba provided the opportunity for the island to develop and become a stronger community. Aruba became part of the world through all the businesses that took place because of the refinery. The island developed dramatically, people started to focus on the infrastructure for instance constructing roads, building houses, and companies started to bloom. Subsequently, opportunities for employment were massive and everyone saw the chance for a better living standard. (Dr. J. Hartog, 1961)

Chapter 7: The Impact on the Culture

The culture on the island was shaped a good deal after the opening of the refinery. Not only did it change the ways of living, but the norms and values were also refined. The population increased from approximately 15,000 habitants to 54,000 in a short period of time. There were about 56 different nationalities who immigrated to the island to work at the refinery. This means that the island consisted of a mixture of about 56 different cultures, beliefs, and way of living. (Dr. J. Hartog, 1961)

A clear example of the impact the refinery had on the culture is the religion and beliefs of many. In the beginning, Aruba only knew two religions which were the Roman Catholic and the Protestant. However, after all the immigration that went on during that period, different religions and beliefs came to existence. There were numerous churches of different religion that were built, and people started to be more open-minded about other beliefs. Many locals were curious about others and wanted to explore more on the cultures that were brought in.

In the early years, there were just a few cars, and the majority of people used donkeys to take them wherever they wanted. During the period of LAGO, the donkeys were becoming less common and the numbers of cars were increasing. The people on the island started to live in a more modern way.

This was an outside factor that once it was brought in became part of the island. It was a development because it was something that contributed to the transportation of the locals.

The immigrants brought with them their cultures and ways of living, influencing the one of the island itself. This is a form of envelopment, because they brought the outside in the island and the locals started to change their way of thinking. It made them see the world in a broader way. The culture of Aruba was persuaded a lot by the immigrants, locals started to mimic the culture of others. Consequently many changes came within our own culture and the way of living. The locals started to compare themselves with others, took what they thought was right and added it in the culture of Aruba. The traditions were kept, yet they added more to it. (Dr. J. Hartog, 1961)

Chapter 8: The Developments After the Closing of LAGO

As a result of the reduced worldwide demand for oil and an oversupply of refining capacity, Standard Oil Company of New Jersey decided to close its facilities on March 31, 1985.

The closing of the refinery brought an economic setback for the island. There was a large amount of unemployment, causing many people to go abroad to try to make a living. There was an urge for a new source of income, and since Aruba gained some fame due to the refinery, tourism became the focus for the recovery of the impact.

In addition, Aruba had the strength to stand on its two feet, which led for the island to fight for its Status Aparte. On January 1, 1986, Aruba attained its Status Aparte from The Netherlands. The Dutch Kingdom consisted then of The Netherlands, Antilles, and Aruba. This was one of the changes that completely shaped the history of Aruba, because it was a sign of the progress on the island. The success that the refinery left on the island made it possible for the people to have more confidence and to be more independent and Aruba was proud of the achievement. This was an indication of how the island was developing and was able to do it in a more independent way.

In 1991, the refinery opened under the Coastal El Paso Oil Refinery Company and was sold afterwards in March 2005 to Valero Oil Corporation.

As seen, even after the closing of LAGO, it provided the island the chance for continued development. It was because of the popularity that the island got from LAGO, since it was once the largest refinery in the world, which made the locals to put all their energies in the tourism industry. (http://www.aruba.com/about.htm)

Furthermore, it was because of the existing refinery that was on the island that Coastal El Paso Oil Refinery Company decided to re-open the refinery. The facilities that LAGO built suited the requirements of the mentioned oil company.

Basically, the post LAGO period developed a great deal due to all the accomplishments during the period. The people on the island gained a lot of experience from the business world. Many of them opened their own businesses and many of them had the opportunity to go abroad to study. Making tourism the pillar of income for the island was a challenge, yet possible, because of all the knowledge and experience they received during the period of LAGO.

Conclusion

The beginning of a refinery on the island was the beginning of a bloom for Aruba. Not only did those who worked at the refinery benefited from it, but the island as a whole saw the dramatic changes that went on.

The revenue that the island received in the first year of LAGO was about five times more than the revenue attained in early years before the refinery.

The result of this research show that even though the refinery was an outside factor and with that also brought lots of envelopments to the island, the people of Aruba accepted it because of the growth in the economy that it would bring. Furthermore, it would provide job opportunities and education to many that were in poverty.

During the LAGO Period businesses started to bloom and the increase in economy was obvious. Every corner on the island benefited of the financial growth.

Even though the culture was influenced a lot by the outside, it did not discontinue. It was reshaped by some factors as mentioned on the chapter of “The Impact on the Culture”.

After doing this research, I must say that in my opinion the opportunity that LAGO gave to Aruba was what made Aruba what it is today. Aruba is a successful island and keeps growing with the time. There were different envelopments that took place, like the building of the Colony in Seroe Colorado, but it left a remarkable story behind it. It became part of the history of Aruba and in every source that has the history of Aruba, the LAGO period is in together with the Colony. It was because of the opening of the refinery that Aruba got a chance to develop and to progress in every aspect of life. The refinery was an external factor, but with the immediate acceptance from the locals, it became an internal factor. It was envelopment that eventually became development.  

References

  • ATA, About, Retrieved on April 28, 2006, from: http://www.aruba.com/about.htm
  • J. M. Ballenger (1969), The Second Year 1939-1949. Aruba Esso News, special issue, 10-11
  • Dr. J. Hartog (1961), De Refinaderij Begint, Aruba zoals het was, zoals het werd pg. 316 Location: Van Dorp Aruba N.V.
  • Dan Jensen, A Short History of Lago Oil & Transport, Ltd, Retrieved on April 28, 2006, from: http://www.lago-colony.com/index.htm