Senator O'MAHONEY. You have a 30-percent interest in that? Senator O'MAHONEY. Is that pipeline operating? Mr. LILLEY. Being an American-owned pipeline, we are rather fortunate it is still operating. Senator O'MAHONEY. Where does that run? Mr. LILLEY. It operates from Saudi Arabia down through the Mediterranean, down to the town of Sidon in Lebanon. It crosses through Jordan, Syria, and Lebanon after leaving Arabia. Senator O'MAHONEY. It had no trouble in Jordan. Does it go through Syria? Mr. LILLEY. Yes, sir. We have had no difficulty in any of those places. Senator O'MAHONEY. But in Syria another pipeline did have trouble? Mr. LILLEY. Yes, sir. Senator O'MAHONEY. It was a British-owned pipeline? Mr. LILLEY. The company you refer to is a jointly owned company, British, French, and American interests in this company. Senator O'MAHONEY. Is the Texas Co. one of the American interests in that company? Mr. LILLEY. No, sir; it is not. Senator O'MAHONEY. How do you explain that your company is allowed to operate whereas the British company is not allowed to operate? Mr. LILLEY. Well, I think that the American people as a whole in the Middle East are probably considered to be more friendly to the Middle East and the motives and the aspirations of the Árab world generally. Whether that would be so that is my own impression. Senator O'MAHONEY. The next map, chart 14, is entitled "Joint Ownership by International Oil Companies of Subsidiary and Affiliated Companies in Europe." The Texas Co. is in this list; is that correct? Mr. LILLEY. The company-I am sorry. Would you identify the company again, Senator? Senator O'MAHONEY. Texas Co. The Texas Co. Mr. LILLEY. Operating in Europe? Senator O'MAHONEY. In Europe. Mr. LILLEY. And the date of that report was Senator O'MAHONEY. August 1952. Mr. LILLEY. NO. We operate only through affiliated companies in Europe. There is very little direct operation that I can identify. Senator O'MAHONEY. The table here shows Texas Co. with a 50percent interest shared by Standard Oil of California in the California-Texas Corp. Mr. LILLEY. That is right. That is the joint interest which we mentioned earlier in connection with Bahrein Petroleum. Senator O'MAHONEY. That is the same one. Mr. LILLEY. That is the same corporation. Senator O'MAHONEY. The California-Texas Corp. jointly owned by these 2 companies is here represented as having an 85.21-percent interest in the Société des Raffineries de Petrole de le Gironde. Mr. LILLEY. Correct, sir. That is now known as Cal-Texas, SAF, which will make it a little easier. Senator O'MAHONEY. Without taking the time to go through all of these, I find Texas again on chart 15 with some newly named companies, the Sociedad Anonima Petrolera Las Mercedes. Do you know of that company? Mr. LILLEY. That is a South American operation which again is out of my area. Mr. FOLEY. That is a producing company in Venezuela in which we own 50 percent interest and the Caracas Petroleum Co. owns the other 50 percent, and the purpose of their business is to drill for and produce oil. Senator O'MAHONEY. Is that chartered in the United States or in a foreign country? Mr. FOLEY. I will have to look that up. I must apologize for not knowing. I should know that one. Senator O'MAHONEY. Your operations are so worldwide in extent that I don't wonder. Senator CARROLL. Mr. Chairman, I wonder if it wouldn't be a good idea to have a list of all the subsidiaries. Senator O'MAHONEY. Yes. I have asked for that and Mr. Foley has agreed to produce it, but I am going to ask him now to divide the foreign operations and the domestic operations so that it will be perfectly clear where you operate. You are engaged in all of the different operations of an integrated petroleum company? Mr. FOLEY. Yes, sir. Senator O'MAHONEY. Transportation? Mr. FOLEY. That is correct. Senator O'MAHONEY. Tankers? Mr. FOLEY. Yes, sir. Senator O'MAHONEY. Did you increase the tanker rate? Mr. FOLEY. Well, again, on a net basis we charter in more ships than we charter out. We had to charter in some more tankers Saturday on a rather high rate in order to continue to take care of our business. Senator O'MAHONEY. I am talking about those tankers which you own. Mr. FOLEY. Our tankers which are owned are chartered at the regular rate. The AFRA rate. The average freight rate award. Senator O'MAHONEY. In other words, the pattern there and the charter rate is competition upward? Mr. FOLEY. That is correct, but that is within the company, Senator. Our ships transport oil for a department from one point it to another point within the company. It is 100 percent owned. Senator O'MAHONEY. You must understand, Mr. Foley, I am not surprised as a result of this testimony that one of the documents which we got from Esso the other day showed a report about complaints from the Dutch Parliament against the Dutch Shell Oil Co. for increasing the prices of petroleum products to the inhabitants of Holland, one of the countries which this Government is trying to aid by this substitute flow of oil. 90507-57-pt. 1—58 If you will be good enough to furnish those additional facts for me, I shall not hold you here long. Mr. LILLEY. May I file the statement with you for the record? Mr. LILLEY. I will be perfectly glad to file it with you. I have no particular desire to read it unless you particularly want me to do So. It will save your time. Senator O'MAHONEY. Has it been covered? Mr. LILLEY. This is particularly our operation in the present emergency. I don't think it has fully been covered; no, sir. I will be delighted to let it go with the filing if that will suit you. Senator O'MAHONEY. Thank you very much. We will file this statement and it will be printed in the record as though delivered. (The matter referred to is as follows:) Mr. LILLEY. My name is A. N. Lilley. I am a vice president and director of the Texas Co. and in charge of its Eastern Hemisphere operations. I am also the company's member representative on the Middle East Emergency Committee. As is well known, the closing of the Suez Canal in late October 1956 and the subsequent disruption of Iraq Petroleum Co.'s pipeline movements to the eastern Mediterranean caused an immediate and severe shortage of crude oil and petroleum products in Europe. Shortly thereafter the United States Government activated the Middle East Emergency Committee with the sole purpose and authority of recommending to the Government the various methods and procedures which could be utilized to voluntarily increase shipments of crude oil and products to Europe and carrying out actions requested by the Government. The Texas Co., by effecting a number of adjustments in its normal operations, has made available substantial additional amounts of both crude oil and petroleum products to meet Europe's needs. These include: 1. Diverting Middle East crude-oil shipments normally bound for United States ports to Europe, in order to keep transportation to a minimum. 2. Shipping to Europe added amounts of domestic crude oil taken from our own stocks, purchased from outside sources, and obtained by reducing crude runs to our own refineries. 3. Making available added amounts of petroleum products from Western Hemisphere sources to European markets from current production and inventory withdrawals a tour coastal refineries, barge and tank-car movements from our interior refineries to loading ports, and purchases from other United States suppliers. As a result of these actions, from November 1, 1956, through January 31, 1957, the Texas Co. and its affiliates supplied Europe with 12,200,000 barrels of crude oil and products. We anticipate that shipments for February and March will amount to another 6,300,000 barrels, or total shipments for the period from November 1, 1956, through March 1957, of 18,500,000 barrels. Only 6,400,000 barrels of this total represents our normal contractual commitments and our normal movements to Europe. Thus, we will have supplied crude and products to Europe at the time of its greatest need in a quantity equal to nearly three times our normal volume. Recognizing that the European demand for middle distillates and fuel oil was more important than the demand for gasoline, our products-supply program has been arranged to provide only that amount of gasoline which was specifically requested by our affiliates for their European customers. We have also rerouted tanker movements in order to eliminate crosshauls and to effect the shortest possible tanker runs and thus increase the utilization of tanker-carrying capacity. For example, through exchanges we were able to eliminate certain movements from the eastern Mediterranean to the United States east coast and instead make possible equivalent movements of crude oil from Western Hemisphere sources to the United States east coast. We have also been able, with Government permission, to load coastwise tankers deeper in the water, and we have extended the time between drydocking for repairs and mainte nance. During the first quarter of 1957, all of these actions by the Texas Co. will mean a saving equivalent to 14 T-2 tankers. It should be pointed out, while most of this overall supply and tanker program was carried out in cooperation with the Middle East Emergency Committee, the Texas Co. even before this time was acting upon its own to help relieve Europe's oil shortage. Furthermore, Caltex, our affiliated company, despite being cut off from normal access to most of its Middle East oil supplies, was able to ship even more oil to Europe in the 3 months, November to January, than in the previous 3 months. The Texas Co.'s assistance played an important part in this remarkable accomplishment. Though the Texas Co. is not normally a major supplier to Europe from Western Hemisphere sources, it has managed to do an exceptional job in taking care of its affiliated companies during this period. To illustrate, another one of our affiliates, the Trinidad Oil Co., in this period of 3 months, from November to January, increased its shipments to the United Kingdom by more than 50 percent above the level of shipments prior to the Middle East crisis. I greatly appreciate the invitation to appear before this committee, and want to assure you the Texas Co. is most anxious to cooperate in getting the facts about MEEC and its operations on the records. A number of our executives have devoted much time and effort to meeting the objectives of the Government, and we are proud of the job that has been accomplished. Senator CARROLL. Do you have joint stockownership with other major integrated domestic companies? For example, do you have joint stockownership with Standard of New Jersey, foreign or domestic? Mr. FOLEY. Foreign companies, for example, the American-Arabian Oil Co., the Texas Co. owns 30 percent of the stock. The Standard Oil of New Jersey owns 30 percent of the stock in that company, but no domestic companies. Senator CARROLL. I wonder if I might put 1 or 2 questions here. You heard my question today when I asked Humble Oil Co. how much they were worth. How much is Texas worth? All of it, subsidiaries, all of your holdings of every type and description? What is your net worth? Mr. FOLEY. According to our most recent published balance sheet, we had assets of $2,114,575,797, and against that we owed on current liabilities $191,314,730. We had a long-term debt of $208,968,985. Senator CARROLL. What is your net worth? Mr. FOLEY. The stockholders' equity is $1,676,688,260. Senator CARROLL. Dividend income. Mr. FOLEY. $116,624,624. Senator CARROLL. Read that again, please. Mr. FOLEY. $116,624,624. Senator CARROLL. Was there other income? Mr. FOLEY. This is the dividends paid to the stockholders. Senator CARROLL. What was the plowed-back-in capital investment, percentagewise? Mr. FOLEY. Well, we earned the figure you cited, $262 million. We paid out $116 million. We plowed back the difference in the earnings, plus all of our depreciation and other items. Senator CARROLL. Does this figure that you have given me $1,676 million-reflect the ownership, the value, the worth of your stock in holdings in all these 90 subsidiaries of which you spoke? Mr. FOLEY. No, sir. When you say "stock," I don't want to get that confused with the stock market, the price they are willing to pay for our stock on the market. It reflects the total stockholder equity in all the companies that we own. Senator CARROLL. I think that is all, Mr. Chairman. Senator O'MAHONEY. Mr. Neville, you did have another question that you wanted to ask about that pipeline? Mr. NEVILLE. That is right. I wanted to know if you can tell us, Mr. Foley, what the present situation is with regard to crude oil supplies or product supplies on the west coast. Mr. FOLEY. There are not sufficient crude supplies on the west coast to meet the demand. Crude is coming in, in addition to the crude produced in California, in order to supply the west coast. Crude is coming in from Canada through a pipeline from Alberta, Canada, through Vancouver, and then it is coming in through tanker movement from overseas. Mr. NEVILLE. Is this known as a chronic condition? Mr. FOLEY. It has been for some time. California has not been able to step up their production from their domestic wells in order to keep up with the demand for petroleum products west of the Rockies. Mr. NEVILLE. Has your company made any attempts to tap huge shut-in reserves in the west Texas and New Mexico area for west coast consumption? Mr. FOLEY. No, sir; we have not. Mr. NEVILLE. Do you have any plans along those lines? Mr. FOLEY. We do not have. Mr. NEVILLE. Do you consider the oil shortage on the west coast to be a matter of real urgency or is it just a day-to-day problem that is being handled as the tankers are available? Mr. FOLEY. It is being handled so that all the consumers have all the product they need. There is no one running short of product, nor do I know of any time recently when there has been any shortage of product. Mr. NEVILLE. What is the price differential between oil on the west coast and east coast? Is it quite a bit higher out there? Mr. FOLEY. It depends entirely upon the gravity of the crude, the location of the crude, as to where it is in the midcontinent, how far it is from the market. It varies all over in the oilfields, from one field to the next, all over the country, as well as within California itself. Mr. NEVILLE. Refined products, such as gasoline, are somewhat higher on the west coast market than they are in the East, are they not? Mr. FOLEY. I could give you some representative gasoline prices. On the price of gasoline, and you are asking on the west coast, in general? Mr. NEVILLE. Just a representative figure. Mr. FOLEY. The price of gasoline in-this is a number of representative cities the average dealer tank wagon price, 18.66 cents in Arizona, California, Nevada, Oregon, and Washington. That would cover the west coast in general. That compares with Colorado, Wyoming, Utah, Idaho, Montana, New Mexico, and Oklahoma, of 18.03 cents. Mr. NEVILLE. Who are the major companies with which you compete on the west coast, generally? |