|Lago and Eagle: the oil industry on Aruba|
During the years after the end of the cease of both gold and phosphate exploitation, which coincided with the beginning of World War I, Aruba fell back upon agriculture and fishery. Poverty and regularly recurring famine were the order of the day.
In the twenties, matters changed drastically when Curaçao and Aruba came into contact with the oil industry. On Curaçao, an oil company started building and therefore stones and sand were gotten from Aruba. For that purpose even a motor ship entered the Paardenbay for the first time in August 1924.
In August of that same year a company of three gentlemen who first had been in Curaçao, came to Aruba. The party, headed by Captain Robert Rodger and employed by the British Equatorial Oil Company, was searching for a suitable place for a harbor where oil from Maracaibo could be transshipped. This oil was extracted in Venezuela by the Lago Petroleum Company. On Curaçao they found out that all the suitable locations had been taken by other companies. Richard Beaujon, a pilot who worked in the Curaçao harbor, succeeded to draw the attention of the gentlemen to a suitable place on the neighboring island of Aruba, where an excellent location for a harbor existed in the Sint-Nicolaasbay, that had not been used since the end of the phosphate exploitation.
Once they had arrived in Sint Nicolaas, they were offered hospitality in the Eman family country house that was built in 1880 by Hendrik Godfried Eman. The gentlemen stayed fourteen days and during that time, meetings were held with acting governor Quast. One of the topics was how to make a waterway through the reef in the Sint-Nicolaasbay. After two weeks, Rodgers and company left but they were back a month later. The decision had been taken to build a transfer station for crude oil in Sint Nicolaas. However, there was no question at that time of building a refinery!
This situation remained like that until the opening of the harbor in the Sint-Nicolaasbay in 1927, after which the "mother ship" was discontinued. Since 1925 a lot of work was put into the completion of the Sint-Nicolaas harbor and the construction of the oil tanks. On November 17, 1927 the complex was opened officially. In December of that year the Governor of the colony of Curaçao, Brantjes, paid an official visit to Sint Nicolaas, where he ' reviewed the constructed works’. He also visited the refinery that was under construction on the other half of the island, the Arend Petroleum Maatschappij (Eagle Petroleum Company). The establishment of this refinery was a reaction by the Dutch/English Royal Shell-group, established on Curaçao, to the activities of the American company on the sister island. This refinery started operations under the name of Compañia Mexicana de Petrole el Aquila S.A. and was an independent part of the Royal Shell. On Aruba, the company was in business under the name of ’Arend Petroleum Maatschappij', but everybody used the English name 'Eagle'.
The refinery was built to the west of Oranjestad, its head office is still used as the office of the ATA and the AHATA. A pier was built near Punta Brabo where the tankers could moor. From there, a railway was built to the refinery. The Eagle itself had three tankers running to bring in crude oil from Maracaibo. In April 1928 these operations were started.. In June 1928 the first oil, refined on Aruba was delivered by the Eagle and exported to Argentinië. For the management of the refinery, a housing estate was built between Oranjestad and the refinery. That neighborhood and the houses from that time, mostly nicely restored, still exist and, together with the head office mentioned above, they are the only permanent fixtures that still recall this almost forgotten chapter from the history of Aruba, The Eagle .
Within the refinery, an increasing number of Arubans rose to positions of responsibility: courses were given and more and more Arubans were trained to be foremen in the company. The production of the refinery also grew in an explosive manner: in 1945, sixteen years after the opening, the first billionth barrel of crude oil was refined, seven years later, in July of 1952, the second billionth barrel.
The other oil refinery on Aruba, the Eagle, stopped functioning in World War II since it produced no jet fuel. The personnel were employed at the Curaçao refinery. The oil tanks that stood empty on Aruba were used by Lago as storage. After the war, the production of the Eagle was not continued and the installations were dismantled.
The arrival of the Lago Oil and Transport Company has been the most radical event in the modern history of Aruba. It brought about major changes for the island and its population. The standard of living increased quickly, which was a luxury that was quite new for a small Caribbean island. However, increasing automation had as effect that the number of employees decreased steadily. Out of 8300 people who worked for Lago in 1949 (16 % of the Aruban population!) only 1350 were left in the beginning of the eighties. Due to rising losses, the outdated and obsolete Lago refinery closed down in 1986. The refinery stood empty for years and just about when there was talk of tearing it down, a new candidate came up who wanted to continue business: El Paso Corporation from Texas, an oil giant that had taken over the Coastal Oil Company from Houston. Lago became Coastal Aruba in 1991 but in 2004, the refinery found itself in new hands again: another oil giant from Texas, Valero, saw its possibilities. The lack of environmental rules for a refinery on Aruba might also have played a role in this decision: the only existing rule here: not to spill oil on the water . . . . . .
In the mean time, Valero Aruba still keeps the about eighty year old refinery running. More than 640 million dollars have been invested in the past years. At this moment, the production stands at 275.000 barrels a day.
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