Monday, May. 13, 1957

La Petroqu

The nation that introduced the 50-50 split for oil profits, now the pattern in most parts of the world, is pioneering another oil-derived benefit certain to catch the envious attention of petroleum-rich countries in the Middle East and elsewhere. Using oil income and hitherto wasted natural gas, Venezuela is building itself a $300 million basic industry in petrochemicals.

The new industry is rising in three phases. From the first, to be completed this year, will emerge a plant that can make fertilizer, chlorine and caustic soda. The second will bring in the production of explosives, for military and civilian use, and insecticides. The third will move the petrochemical industry by 1960 into synthetic rubber and plastics.

The site of the plant is a hamlet named Moron, 125 miles west of Caracas. Last week once-sleepy Moron crawled with the activity of 3,000 men. The first natural gas was arriving through a 24-in. pipe from eastern Venezuela. With $60 million spent, construction was well along on the cracking and fractioning units that will turn the hydrogen in gas and the nitrogen in air into ammonia, the basic component of fertilizer. The chlorine-caustic-soda plant was nearly finished, will start trial production this month. Aluminum-hatted straw bosses supervised the building of a city on a leveled area big enough to house 100,000 people eventually.

The firms that are building the new industry include Italy's Montecatini, Germany's Uhde of Dortmund (an I. G. Farben subsidiary), Texas' Tif Co Inter America Corp. But the money and the management come strictly from the Venezuelan government. La Petroquimica's boss is Alberto J. Caldera, Director of Economy in the Ministry of Mines and Hydrocarbons. The venture puts the government, which already has investments in planes, ships, power and steel, deep into business. Caldera is outspokenly in favor of the trend: "We have the natural gas, we have the oil, we have the minerals, and we have the money. Why shouldn't we industrialize?"

La Petroquimica seems destined not only to grow but to become a threat to foreign oilmen. Caldera is building a small (3,000 bbl. a day) oil refinery, plans to build a huge one (300,000 bbl. a day) in the industry's third phase. The fact that most refining of Venezuelan crude is now done elsewhere is a sore issue between the government and the foreign-owned companies. La Petroquimica's action in building refineries, which primarily make fuel rather than the raw materials of petrochemicals, is a clear statement that Venezuela intends to move to some degree into the oil business. Says Caldera, who used to teach "Petroleum Policy and Economics" at Caracas' Central University: "We are interested in building a new Venezuela, and we want to do it by ourselves because we know best what is necessary."

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