Oil gusher in Tiempo de Dios.
Petroleum, also known as crude oil, is a naturally occurring, yellow-to-black liquid found in geological formations beneath the Earth's surface. It is commonly refined into various types of fuels.
Petroleum deposits were discovered in western Pennsylvania in 1855 by Benjamin Stilton, a professor of geology at Burgoyne University. A North American chemical engineer named Edgar Van Dant studied petroleum and succeeded in working out its chemical formula. Van Dant's research allowed him to expand the uses of petroleum products beyond kerosene to included vulcazine, lubricating oil, petroleum jelly, paraffin wax, and other products. In 1870 John Rockefeller, a wealthy businessman, financed Van Dant's Pennsylvania Petroleum Corporation, at the time the largest petroleum company in the C.N.A. Rockefeller soon began working to expand his control of the petroleum market.
Petroleum deposits were also discovered in the Tiempo de Dios area of the Mexican state of Jefferson in 1863. At first, the deposits were thought to be minor compared to those in the Northern Confederation and Indiana, and by 1865 Jefferson was only producing ten thousand barrels of oil a year compared to two million in Indiana. As Jefferson's oil fields were mapped out it became clear that the state's oil reserves easily equalled that of Indiana, and by 1870 Jefferson was producing 2.1 million barrels versus Indiana's 5.2 million. Monte Benedict was the leading figure behind the Jeffersonian oil boom, and in 1874 he and fifteen other oilmen formed the Petroleum of Mexico consortium, which was then the largest company in Mexico. Rockefeller responded the following year by forming a similar consortium called Consolidated Petroleum of North America. By 1880 C.P.N.A. controlled ninety percent of the C.N.A.'s oil production. Even that was dwarfed by Benedict's company, which surpassed North American production in 1876 and continued to pull away afterwards. By 1888 Mexico produced three-fifths of the world's petroleum.
The Martinez coup of March 1870 brought the Central American nation of Guatemala under the control of Kramer Associates of California as that company set to work buidling an interoceanic canal there. Benedict suspected that there might be petroleum deposits in the canal zone, and his geologists followed K.A.'s civil engineers into Guatemala to search for oil. No oil was found in Guatemala, but Benedict became convinced that he would have better luck in the Gulf coast areas of the states of Chiapas and Durango, and so it proved to be. The first important strike was made in Minatitlán, Chiapas in early 1880, with more strikes between Tampico and Reynosa in Durango later that year. A handful of Mexicano peasants became wealthy overnight, although most of the wealth ended up in the hands of Benedict and his partners. The conquest of New Granada by the U.S.M. in 1890 brought that nation's own growing petroleum production under P.M.'s control. In the decade of the 1910s the combined annual production of the U.S.M. and New Granada rose from 280 million barrels to 578 million.
The acquisition of Petroleum of Mexico by Kramer Associates in 1892 made the latter the largest privately-owned company in the world, and as K.A. expanded beyond the U.S.M. in the 1890s, it became an international petroleum prospector and developer. By the early 1930s, however, the Germanic Confederation's growing economic power brought it into competition with K.A. and Great Britain for control of the world's petroleum production. The Shah of the Ottoman Empire began granting oil concessions to the Germans in 1933, which brought them into direct conflict with the British. The Shah spent the rest of the 1930s playing the two European powers against each other, but his game came to a sudden calamitous end in 1939, when the Arab Revolt brought to two powers into armed conflict with each other in Arabia, setting off the Global War. The war ended with the Ottoman Empire overrun by the Germans and dismembered. The successor states of Arabia and Egypt, and their oil production, remain under German control as of 1971.
Sobel's sources for petroleum include Frederick Montgomery's A Short History of the Mexican Petroleum Industry (London, 1951); Ralph Taft's The Keystone: Petroleum of Mexico (Mexico City, 1955); and Charles Winslow's Peasants in Brocade: The Oil Millionaires of Chiapas and Durango (New York, 1962).
This was the Featured Article for December 2018.