Hope from Ragusa

In southeastern Sicily, the islanders have a name for the bleak hill town of Ragusa: una brutta citta--an ugly city.

Its 48,000 people live in clannish poverty in stone houses little better than caves, scratching the barest kind of living from their rocky wheatfields. But last week Ragusa stood as a symbol of new economic hope for Sicily, and for all Italy.

On a hill outside the town stood a modern, 168-ft. oil rig; below it was Sicily's first proven well, Gulf Oil Corp.'s Ragusa No. 1, with an initial capacity of more than 500 bbls. a day.

Gulf's strike was of prime importance for oil-poor Italy. Domestic production is only about 1,900 bbls. a day, and the country uses nearly 20 times that much, which must be imported at a cost of about $200 million a year. Now Italy has solid hopes of cutting its expensive imports by at least 25%. Geologists report that there is a good-size oilfield under the hills near Ragusa, and estimate an eventual yield of 10,000 bbls. a day.

Gulf's find was also a victory for foreign capital in its battle against Italian Communists, who want to nationalize all petroleum discoveries, forbid any exploration and development except by the government. First, the Reds scoffed at the idea of the Americans' finding oil, then cried that Gulf would keep it in the ground so that it would not compete with other U.S. fields. To make them eat their words, Gulf plans to put its Ragusa No. 1 into production by March, even though the company would like to go slower, drill deeper in hopes of finding a bigger pool.

Credit for the discovery goes to Gulf and to a chain-smoking Texan named J. Elmer Thomas, who had been prospecting in Italy since the 1930s. It was Thomas who convinced Gulf that Sicily had oil in commercial quantities. Thomas died in 1949, but Gulf, working through its wholly owned subsidiary, American International Fuel & Petroleum Co., got busy. It hopes to make a deal to pay the government about a 12 1/2% royalty on the oil brought in by its prospectors. Gulf, which has already spent $2,000,000 on drilling and exploration, will spend another $3,000,000 before it achieves any significant production.

In Sicily, half a dozen other companies are also active. Britain's Anglo-Iranian Oil Co. has already spent $500,000 on a test hole near Ragusa. Mediterranean Oil (Gulf and MacMillan Petroleum Corp.), Pacific Western Oil Corp., Montecatini and others have all bought extensive leases (now upped to a 16% royalty) from the government and are searching for oil. So far, 2,400,000 acres have been leased, almost 40% of Sicily's land, and Sicilians are waiting for the first gushers.

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