The Caltex Group Woven into the economic fabric of more than 67 countries in the Eastern Hemisphere, the Caltex Group of companies is steadily expanding its international operations in a world that exhibits a constantly increasing demand for greater quantities of oil. In the 17 years since it was formed by The Texas Company and Standard Oil Company of California, the California Texas Oil Company, Ltd. and associated companies known as the Caltex Group has carried its activities to four continents-in marketing, refining and transport. A huge tanker fleet has been built up and is still growing. The end of World War II found Europe rebuilding its devastated areas and wrecked industries, Asia struggling to raise standards of living through industrial growth and improved agriculture, Africa taking stock of its tremendous natural wealth and searching for tools of development-activities that require oil and petroleum products. To meet these needs east and west of the Suez Canal, the Caltex Group constitutes an enterprise operating in an area populated by some 750,000,000 people. Sales volume is at the rate of 135,000,000 barrels a year of crude oil and refined products. Total company assets amount to some $660,000,000. Expansion and Production In Central Sumatra, sources of crude are being expanded and exploration has been undertaken in western Australia. In Australia, Lebanon and the Philippines new refineries are under construction. In Italy, at San Martino de Trecate, a 50 per cent interest is held with the Fiat Company in a refinery. In Japan, in equal partnership with companies of that nation, Caltex is participating in a large expansion program involving three refineries. In Spain, Caltex holds a 24 per cent interest in the Cartagena Refinery. The chief source of tile Caltex product supply is the Bahrain Archipelago, in the Persian Gulf, off tile coast of Arabia. The first well was completed in Bahrain by Standard Oil Company of California in 1939. The first distillation unit was erected and put into operation in 1936. Monthly bulk exports of petroleum products, from the port of Sitra, now average 5,400,000 barrels. Monthly packaged petroleum exports include some 35,000 drums of refined oils and 30,000 drums of asphalt. Expansion in the postwar years has been so consistent that other sources of crude and refined products had to be found. Marketing associates of the Caltex Group move to tile consumer area some 60 percent of the crude and refined products of Saudi Arabia Marketing Areas and refining Caltex marketing areas consist of four divisions - European, Central East, Far East and Australian. To service these areas the Caltex Group operates over 100 harbor and river craft, 60 ocean terminals, over 200 bulk depots, hundreds of railway tank cars and tank trucks. Almost 12,000 service stations are wholly or partially owned, in addition to the many thousands supplied with Caltex products. As a basic commodity in most economies, oil has a major effect on the financial climate of a country. A Caltex operation is not viewed by the company as an isolated enterprise for profit only but as an element to be integrated into the economic structure of the area. In France, for example, Caltex rebuilt the war-damaged refinery at Bec d' Ambes, near Bordeaux, at a cost of almost $10,000,000 in private capital. In the same year, 1950, Caltex invested $27,000,000 in private capital to build a refinery at Pernis, Holland with a capacity of 28,000 barrels a day. Both countries profit by reducing costly imports of petroleum products and through employment of domestic personnel. In rebuilding the French refinery, all the materials available in France, about 70%, were purchased there and at the peak of construction 1200 Frenchmen were employed. The permanent personnel consist largely of French nationals. The Holland refinery employs about 560, chiefly Netherlanders. Employment Pattern and Policy The employment pattern is similar throughout Caltex activities. Caltex Pacific operating in Sumatra, principally In the Minas field, employs, about 2700 people of whom 2300 are Indonesians, Caltex (Africa) Limited operating in South and East Africa, employs 2300 people, mostly nationals. In Bahrain there are close to 9000 employed, chiefly Bahrainis. In Bahrain, the company built and operates two modern hospitals and a medical laboratory. Modern sanitary measures have been instituted to stamp out tropical diseases. It is company policy to train employees, local and expatriate, in various aspects of the oil industry. The emphasis, wherever possible, is on training of nationals in the country of operation. In developing a new area, or plant, however, Caltex is likely, temporarily, to draw heavily on its American staff in addition to gathering experts from affiliates in a dozen countries. Engineers, geologists, construction personnel and people trained or interested in any phase of the oil industry and in the Caltex Group a fruitful field for their knowledge. Economic Internationalism The result of Caltex Group activity within a nation is a form of economic internationalism that raises standards of living, provides employment, creates new industries, acts as a medium for the exchange of ideas and depends for its profits on the economic health of the host country. Profits are regarded as the normal result of a cooperative enterprise between capital, invested at risk, and country that has much to gain from such a venture. With the underlying principle the operation will in any one country, be largely staffed by nationals of that country it is axiomatic that labor practices will be consistent with local standards. In general, the Caltex formula can he considered a satisfactory pattern for worldwide petroleum operation. From The Mines Magazine October 1953