Friendly Enemies?

Long has Sir Henri Wilhelm August Oeterding's Royal Dutch-Shell Petroleum company been thought to be bitter rival of U. S. petroleum companies, particularly Standard Oil of New York (TIME, Sept. 9). Sir Henri was presumed to be especially enraged over Standard of New York's dealings with Soviets, who confiscated many a Royal Dutch acre in Russia and then asked Standard of New York to show them how to get better kerosene out of the crude oil. The recent and current "invasion" of the New York and New England gasoline market (long sacred to Standard's Socony) by Shell Union, Sir Henri's U. S. subsidiary, was considered a retaliatory move, and all U. S. movements toward restriction of oil production were hampered by the necessity of taking into consideration Sir Henri's competition for world-markets. Thus Royal Dutch was commonly regarded as a fly in U. S. petrolatum.

Last week, however, was announced a surprising reconciliation between Sir Henri and a great Standard company, though it was Standard of New Jersey, not Standard of New York, with whom Sir Henri treated. Closely following the announcement that Standard of New Jersey and I. G. Farbenindustrie, great German chemical "trust," were about to get their new oil-hydrogenation process into commercial production, came the announcement that Royal Dutch had joined the patent pool controlling the new process. The process itself (which depends upon combining hydrogen with crude oil in such a manner that from 100 gallons of crude plus hydrogen may be produced 100 gallons of gasoline) has the potentiality of revolutionizing the entire petroleum business by doubling the yield of gasoline from crude. It is particularly valuable with respect to heavy Venezuelan oils (of which Sir Henri produces large quantities) whose yields of gasoline by straight distillation and cracking are very low. Standard of New Jersey and I. G. Farbenindustrie have organized a hydrogenation subsidiary through which U. S. oil companies in general will be permitted to share in the hydrogenation process, but the inclusion of Royal Dutch was more than unexpected, even though Standard of New Jersey's Walter Clark Teagle is one Standard man whom Sir Henri is believed to hold in high regard.

Interesting, also, was the question of the Royal Dutch quid pro quo. The Royal Dutch statement, said that it had contributed its "experience" and certain unspecified patents under its control. There had been no previous mention of Royal Dutch patents comparable to the hydrogenation treatment. Meanwhile, however, Royal Dutch emphatically denied any general alliance with Standard and I. G. F., insisted that the shared patent implied no lessening of competition, no understandings on the division of the world-petroleum trade.

Royal Dutch also announced a 1929 earning report, showing a net of approximately $50,588,000, said however that the profit per ton of oil produced was steadily decreasing.

This file is automatically generated by a robot program, so reader's discretion is required.