CREOLE PETROLEUM CORPORATION. Experienced three decades with Creole Petroleum Corporation (an ex affiliate of EXXON Corporation) in the interior of Venezuela, in various oil camps within the country. Creole, a very interesting company, 95% owned by Exxon Corporation and listed on the American Stock Exchange until nationalized. One person held almost 3% of the remaining shares. Creole generated over 40% of Exxon Corporation's profits for many years during the decade of 1950. Creole produced over 1.5 million barrels of oil per day, refined 600k barrels per day and injected over 1 billion cubic feet of gas per day. Refiners refer to this last number as scuffs. Vertical integration existed throughout the company. Operations included drilling rigs to repair shops, hospitals to grave yards, launches, tugs, barges to dry docks, schools (primary grades), housing, mess halls, guest houses, clubs, golf courses, power plants, roads, office buildings sewer treating, etc.
Many times Creole cash returns to Exxon exceeded earnings. While at other times Creole borrowed from Exxon to meet payroll and other expenditures.
Creole did not over staff its operations similar to US oil companies, including Exxon USA. Suitcase parades occurred on drops in crude prices or economic upheavals. Staff received authority and autonomy to perform assigned resposibilities. Training assignments to develop local professionals to replace expatriates started early on and continued until nationalization (1976). When nationalized only 200 expatriates remained, down from 2200 in the 1950's.
Venezuela accomplished a most unusual oil industry nationalization. Planning and execution of the nationalization started four years prior to the preannounced date of inauguration. During the prenationalization stage the Venezuelan government planning assured a amicable turnover of the properties, assets and equipment from the multinational operators. Reimbursement of all capital expenditures for two years prior to nationalization characterizes government efforts to ensure tranquility. The government even reimbursed all expenditures for consumable items. Naturally all the companies cried and shouted rape as the government only reimbursed book value for assets. Book value represented about 10% of the original investment. One must remember that within five years of nationalization date over 90% of the concessions would revert to the nation.
Yes, these protests allowed the publicly held US companies to write down investments, take losses and proceed with other measures to soften the loss of nationalization.
Work to attempt to recover a maximum of money continued for about two years after nationalization. This effort permitted write offs and fulfilled other government regulations to indicate a serious attempt to fight the inevitable nationalization. Exxon never recovered all monies after nationalization. Exxon did recieve lucrative lifting contracts, refining netbacks, material purchasing fees and a variety of other fees and imaginative profitable charges.