Lago Oil & Transport Co. Ltd. had its beginning in 1924 as a shipping company carrying crude oil from Lake Maracaibo to its transshipment facility on the island of Aruba.

History

With the discovery of a vast amount of crude oil under Lake Maracaibo, but unable to send it to market because the channel into Lake Maracaibo was too shallow to allow oceangoing oil tankers to enter the lake,

Pan American Petroleum and Transport Company The Pan American Petroleum and Transport Company (PAT) was an oil company founded in 1916 by the American oil tycoon Edward L. Doheny after he had made a huge oil strike in Mexico. Pan American profited from fuel demand during World War I, and fro ...

, who held the lease on a large area of Lake Maracaibo, incorporated Lago Oil & Transshipment Co. The purpose of that company was to run lake tankers, to bring crude oil from Lake Maracaibo to Aruba. There, the oil was stored ashore in large tanks, later loaded onto larger oceangoing tankers and taken to the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...

for refining into finished petroleum products such as

gasoline Gasoline (; ) or petrol (; ) (see ) is a transparent, petroleum-derived flammable liquid that is used primarily as a fuel in most spark-ignited internal combustion engines (also known as petrol engines). It consists mostly of organi ...

diesel fuel Diesel fuel , also called diesel oil, is any liquid fuel specifically designed for use in a diesel engine, a type of internal combustion engine in which fuel ignition takes place without a spark as a result of compression of the inlet air and ...

, Bunker C and heating oil.

Refinery

In 1928, Standard Oil of Indiana purchased the Lago transshipment Pan American Petroleum facility in Aruba, as well as the oil holdings under Lake Maracaibo in

Venezuela Venezuela (; ), officially the Bolivarian Republic of Venezuela ( es, link=no, República Bolivariana de Venezuela), is a country on the northern coast of South America, consisting of a continental landmass and many islands and islets in th ...

. Standard Oil of Indiana then began to build a small

refinery A refinery is a production facility composed of a group of chemical engineering unit processes and unit operations refining certain materials or converting raw material into products of value. Types of refineries Different types of refineries ...

next to the transshipping facility port. Soon after the small refinery had been completed, a tax was anticipated to be imposed by the U S Government on imported crude. Standard of Indiana had only marketing outlets in the United States and knew they could not compete when selling imported oil that had been burdened with a toll, so they sold all their holdings to Standard Oil of New Jersey, who had marketing outlets around the world. Standard Oil of New Jersey purchased not only the small refinery in Aruba, but also the vast holding in crude oil Standard of Indiana owned under Lake Maracaibo. In 1938, Standard Oil of New Jersey obtained a contract to supply Britain with 100 octane

aviation gasoline Avgas (aviation gasoline, also known as aviation spirit in the UK) is an aviation fuel used in aircraft with spark-ignited internal combustion engines. ''Avgas'' is distinguished from conventional gasoline (petrol) used in motor vehicles, whi ...

. However, because of the isolationism that was prevalent in the United States (and which indeed resulted in the US staying neutral in

WWII World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...

, until the end of 1941), the contract stated that the product had to be produced outside the United States. Because Aruba was under Dutch control, the Lago refinery became an important asset by providing a place outside the United States where aviation gasoline could be produced without legal and international problems. Thus, the size of that refinery expanded long before the United States entered

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposing ...

Wartime

With the United States entry into World War II in 1942, the demand for Aviation gasoline further increased and considerable expansion was done at the Lago Refinery soon after that. With this expansion, Lago became one of the largest refineries in the world, only bested by

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 ...

refinery on Dutch-owned Curaçao, and a major producer of petroleum products for the Allied war efforts. The importance of the Lago refinery was well known to the German High Command and an

Attack on Aruba The Attack on Aruba was an attack on oil installations and tankers by Axis submarines during World War II. On 16 February 1942, a German U-boat attacked the small Dutch island of Aruba. Other submarines patrolled the area for shipping and the ...

was performed. On February 16, 1942 the site was attacked by the German submarine ''U-156''. The submarine's deck gun exploded due to mistakes by the German deck gunner, and the refinery was not damaged. However, three of the lake tankers that carried crude oil from Lago Maracaibo were torpedoed.

Postwar

When demand for gasoline was high after World War II, the Lago Refinery was running at full capacity and employed over 10,000 personnel. About a thousand were foreign staff employees in supervisory positions and the remainder of the work force was from the native population of Aruba as well as "off-islanders", imported from mainly the

British West Indies The British West Indies (BWI) were colonized British territories in the West Indies: Anguilla, the Cayman Islands, Turks and Caicos Islands, Montserrat, the British Virgin Islands, Antigua and Barbuda, The Bahamas, Barbados, Dominica, Grena ...

. These employees lived in

San Nicolaas San Nicolaas ( nl, Sint Nicolaas) is southeast of Oranjestad, and is Aruba's second largest city. it has a population of 15,283, most of whom originate from the British Caribbean and rest of the Caribbean. History According to oral tradition, ...

and in the interior of the island, the foreign staff employees lived in a "company town" known as

Lago Colony Lago Colony was a community located on the east end of the island of Aruba, near the area presently known as Seroe Colorado. The town consisted of 377 homes, a hospital, church, club house, bowling alley, and an American School, with first thr ...

, which was east of the refinery. In 1985, Exxon Corporation closed the Lago Refinery and began to dismantle the facility as well as the colony. Before the refinery was partially dismantled, it was taken over by the Aruba Government and sold to

Coastal Corporation Coastal Corporation was a diversified energy and petroleum products company headquartered at 9 Greenway Plaza (Coastal Tower) in Greenway Plaza, Houston, Texas. The company was founded in 1955 by Oscar Wyatt and incorporated in 1955 as Coasta ...

, which re-opened the refinery after a major overhaul but not nearly at its original capacity. Coastal later sold the refinery to

Valero Energy Corporation Valero Energy Corporation is a Fortune 500 international manufacturer and marketer of transportation fuels, other petrochemical products, and power. It is headquartered in San Antonio, Texas, United States. Throughout the United States and Can ...

. Late 2017,

Citgo Petroleum Corporation Citgo Petroleum Corporation (or Citgo, stylized as CITGO) is a United States–based refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals and other industrial products. Headquartered in the Energy Corridor area ...

took over the refinery.

References

External links