A Few Hundred Meters Distant

The drill bits of innumerable rigs ultimately delineated three distinct zones of Mexico's oil fields. Each zone had definitive geographic boundaries, yielded distinctive crude oils, and presented different problems and possibilities of exploitation. At the northern extremity of the coastal oil region lay the so-called northern fields. Doheny's El Ebano in the state of San Luis Potosí had been the cornerstone of this zone. But between 1910 and 1920, other foreign interests challenged Huasteca's supremacy here and opened up production on both sides of the Pánuco River, centering on the town of Pánuco and the district of Topila. An independent firm named the East Coast Oil Company, apparently connected to the Southern Pacific Railroad, opened up production on the Pánuco River in 1911. Its crude oil was identical in density and asphaltic content to that of El Ebano. Soon, other companies started production in the northern zone, but problems of transport (the oil was too thick to pipe), quality (it was expensive to refine), and leases (the area had small producers) combined to retard the full development of the Pánuco-Topila fields.^[40] Once shorn of its ties to Standard Oil, the Waters-Pierce interests moved upstream, as the saying goes. From its refinery at Tampico, it developed modest producing properties along the Pánuco River. The Royal Dutch/Shell established its new Mexican subsidiary, La Corona, in the producing fields near the town of Pánuco. The Texas Company of Mexico, Gulf, and eventually Standard Oil would also secure important leases in the northern fields. Only El Aguila among the large firms would have no presence at all in the north.

One characteristic of production tended to make the northern fields distinctive. The crude petroleum found here was very heavy and viscous, yielding abundant tars and asphalt but little kerosene and gasoline. At El Ebano, the oil averaged about 12 degrees Baumé, a standard measure of specific gravity. The lower the specific gravity, the thicker and heavier was the oil. Pánuco and Topila crude measured from 10 to 15 degrees Baumé. These heavier oils had to undergo a rudimentary refining called topping before being converted into fuel oil. In general, the wells flowed more slowly here. One also found few pipelines in the northern fields. Only the East Coast Oil Company and La Corona had pipelines, but they were not lengthy, the longest covering the twenty-four miles from the east coast wells to the Pánuco River. The oil had to be heated before it would flow properly. Two pumping stations were also needed to push it through the pipe. Most crude petroleum in the northern fields was transported to tank farms, refineries, and export terminals at Tampico aboard river barges. Five of the larger producing companies had Mississippi stern-wheelers to carry the barges down to Tampico. By 1914, three independent barge companies had also been established to carry the crude from Pánuco to Tampico.^[41] Generally, the lower returns on oil exploration and refining rendered the northern fields somewhat less attractive than those oil lands near Tuxpan to the south. In the 1920s, however, the north would remain the foundation of the Mexican oil industry after the more prolific and productive wells in the south became exhausted.

Still, the northern fields west of Tampico shared one characteristic of the fields farther south — portions of the production came from leases on small-holdings. The valley of the Pánuco River had become an important agricultural zone before the oil boom. In the absence of Indian-village agriculture, the campesinos had divided up the land into modest family-sized holdings. In the areas of Pánuco and Topila especially, the lease-takers had made individual leases with the numerous landholders and then resold them to competing drilling and producing companies. Few big companies, therefore, held contiguous leases and none of the oil reservoirs were developed on the unitary system, at least during the oil boom. If one wildcatter successfully brought in a big well on his small lease, the discovery would set off a scramble to secure the small leaseholds next door. Competitors then drilled offset wells before the first rig could drain the entire reservoir. Along the river, many separate interests had competing wells in close proximity to each other. Agents of El Aguila acquired two leases in the Pánuco area in

1917. Both properties were less than ten hectares. "Across the river and only a few hundred meters distant [from our leasehold]," reported the agents, "is a six thousand barrel well, controlled by the Cia de Petroleo de `La Universal,' S.A., and close to that well the Penn-Mex. Fuel Co. are [sic ] now drilling."^[42] The only thing that prevented the early exhaustion of the northern fields, many of which are still producing today, was the nearly intractable consistency of the crude here. The heavy oil simply refused to come out of the ground quickly and easily.

Only in the more arid cattle lands north of the river could the oilmen buy and lease land in large quantities. Thus, Doheny was able to purchase just two ranches to make up the large El Ebano field. Yet the larger haciendas like the San José de Rusias and others that lay in the southern part of the state of Tamaulipas were not as productive as the smaller holdings in the basin of the Pánuco River.

The southern fields, which came to be known as the Faja de Oro, the Golden Lane, lay west of Tuxpan and shared only a few similarities with the northern fields. Here one also found production on larger haciendas, although, as in the north, several farming districts in which offset drilling proliferated could be found within the Golden Lane. But the differences were much more important. The crude oil of the southern fields was lighter; impressive single- and double-looped pipelines stretched across the tropical landscape; few river barges plied the smaller Tuxpan River; exploration here was positively frenzied; and oil field exhaustion came sooner.

The firstcomers like Furber, Doheny, and Cowdray had already secured fee-simple title and leases on the larger properties when the oil boom began in 1911. At the southern extremity of the Faja de Oro, about forty miles southwest of Tuxpan, Furber owned the large property to which he gave his name, Furbero. He acquired additional large haciendas next door, most notably the property of Trapani, a factor that was to loom large beginning in the late 1920s. Its oil was the lightest and most valuable of the Faja de Oro, measuring 24 degrees Baumé. During the great Mexican oil boom, however, Furbero's wells were not very productive. Doheny, of course, had secured title to the Cerro Azul and Juan Casiano haciendas. The Pearson interests of Cowdray owned Potrero del Llano and had leases on several larger cattle haciendas, like Tierra Amarilla of the Peláez family. Of course, their companies, La Huasteca and El Aguila, were locked in a legal dispute over competing leases on the hacienda property of Cerro Viejo. Production continued anyway.

Still, there existed areas in which small-scale farming had predominated before the oil boom and where lease taking, well drilling, and production were much more competitive — even frenzied. Tanhuijo, Los Naranjos, Amatlán, Tepetate, and Chinampa were farming areas. Here the independent wildcatters, smaller producing companies, and late-arriving larger companies gained entry into the Mexican oil boom. The Texas Company, Gulf, and eventually Jersey Standard established important wells in this region. Lesser-known firms like the Penn-Mex also got their start here. Eventually many of the smaller firms either exhausted their wells or sold out to the bigger companies. Yet during the period of rising oil prices, from 1915 to 1920, these smaller interests engaged in a dash for leases. Oil strikes flashed across the landscape like lightning, gaining instant recognition and majesty, then fading quickly. Independent wildcatters and company drilling teams moved first to Chinampa, then to Los Naranjos. They produced oil prolifically, like the tropical rainstorm, from closely placed wells, leaving the ground exhausted, then moving on to the next site. The strike at Amatlán in 1919 and 1920 culminated the boom. There the big companies, even Jersey Standard, had encouraged their drilling crews to share in the flush production. They worked overtime. On the smaller holdings, each well owner felt pressured to empty the common reservoirs of crude oil before his competitor next door. Conservation was impossible. Exhaustion was inevitable, especially given the property of the oil here in the southern fields.

It was not called the Golden Lane for nothing. The oil of the southern fields was light, valuable, and flowed quickly. When it burst from the well at Dos Bocas, the oil had a temperature of 165 degrees F., compared to 105 degrees F. for El Ebano's heavier crude. The gas and water pressures in the southern fields were considerable. Engineers measured it at 285 pounds per square inch in the Casiano well and 850 pounds per square inch at Potrero del Llano. Its specific gravity measured 19 to 22 degrees Baumé, the oil yielding about 12 percent illuminants and 20 percent gasoline with the refining technology of the day. It also produced good lubricants. Topped off, that is, after a preliminary distillation, the crude could be used for fuel oil.^[43] The latter was the growth product.

The lighter, more viscous crude of the southern fields also lent itself to being transported from well to refinery via pipeline. Huasteca had three major pipelines. The longest one, covering sixty-five miles, went from Juan Casiano to Tampico, and two smaller ones connected the

eight miles between Cerro Azul and Juan Casiano. El Aguila also had numerous eight-inch pipelines, two hundred miles of pipe in all, connecting Potrero del Llano east to the Tuxpan bar, Potrero north through Tanhuijo to Tampico, and Los Naranjos to Tuxpan. Mexican Gulf laid a sixty-two-mile, eight-inch pipeline from Tepetate to Tampico. The Cortez, the Texas Company, and Island Oil built smaller pipelines from the Tepetate-Chinampa oil fields to Port Lobos, a small oil terminal and topping complex at the southern end of the Tamiahua Lagoon.

Port Lobos and Tuxpan, however, did not develop into important oil refining complexes. Neither had good deep-water ports; nor did they have existing rail connections to the Mexican markets of the highlands. Port Lobos and Tuxpan had pipelines hoisted into floating loading hatches stretching two miles offshore, where steam tankers could load crude petroleum in bulk. The crude was then refined elsewhere. El Aguila sent Potrero crude to be refined at Minatitlán, while North American companies transported the crude to refineries on the Gulf and Atlantic coasts of the United States. The propensity of the Golden Lane crude to be transported on pipeline motivated the larger companies to continue the development of the oil region's major deep-water port, Tampico, as the principal Mexican refining center. Tampico surpassed Minatitlán as a refining town and Puerto México as Mexico's bustling oil terminal. In 1918, Tampico was exporting more than 5.3 million tons of petroleum; Tuxpan and Port Lobos, 2.6 million tons; and Puerto México, 149,600 tons of mostly reexported oil. Coastal barge and steam transportation served to transport equipment and personnel; few of the inland waterways of the Tamiahua Lagoon ever had as much traffic of oil barges as one found on the Pánuco River.^[44] Oil moved exclusively in pipelines there.

The third zone of oil production was the Tehuantepec-Tabasco-Chiapas coastal lowlands, known merely as the isthmus. Isthmian crude was the highest quality of all (25 to 32 degrees Baumé), had a paraffin base, contained less sulfur, and yielded larger proportions of illuminating oil. Its deposits lay very close to the surface, sometimes at only 150 feet. El Aguila was the most active company to work here, and its leases and fee-simple properties were held in large haciendas, not on small-holdings, which were not found here in great numbers. The environment and petroleum would have been conducive to a large company's great success, and in fact, a large company, El Aguila, had been here since 1901. It built a refinery at Minatitlán and a railway and port

terminal at Puerto México. The only problem was, El Aguila never could drill a gusher on the isthmus. Those wells that did produce abundantly soon tapered off and sooner or later were capped. Their leased properties there might have been the oilman's dream. They were huge. El Aguila's option on the hacienda belonging to José Yves Limantour, then in a Parisian exile, covered ten thousand hectares. El Aguila might have developed this property over a long period of time, unmolested by offset wells of competitors. But it had no oil at all. "[T]he Limantour [property] has no desirability as a subsoil lease," reported El Aguila's agent.^[45]

As export prices climbed to unprecedented heights, oil exploration proceeded not only in the three principal zones of production but elsewhere as well. Successes were hardly notable. Seven British capitalists had obtained the oil rights to more than one hundred thousand acres near Saltillo. Some U.S. interests were attempting to secure permits to drill on lands south of the Río Bravo (Rio Grande), on the opposite side of the border from some Texas oil fields. Farther west, on the Pacific Coast, Japanese, American, British, and Dutch agents were investigating oil-bearing lands near Ensenada and also in Sonora. Nothing worthy of drilling was found.^[46] American prospectors were attracted to the southern parts of the Mexican Gulf Coast by El Aguila's abandonment of exploration there. An oil field explorer reported on oil seepages in the lowlands of Oaxaca, Chiapas, and Tabasco. "The San Andres — Tuxtla section is especially promising," he stated.^[47] The explorer was wrong. American entrepreneurs were planning to bring drilling equipment to a site fifteen miles west of Hecelchakan, Campeche, where they had discovered evidence of petroleum and asphalt deposits. One drilling team also sank a well to three thousand feet near Progreso, Yucatán, before they abandoned it. On the opposite side of the isthmus, following the war, German entrepreneurs had returned to prospect for oil near Pochutla, Oaxaca.^[48] Crude was not discovered in sufficient quantity, however.

During the great Mexican oil boom, the characteristics of the southern fields near Tuxpan encouraged foreign oilmen to develop them more rapidly than either the northern or the isthmian zones. The value of the product, the rapid rate of flow, and the ease of transport motivated a burgeoning rise in production of the oil fields of this zone. By 1921, more than three-quarters of Mexican production came from the southern fields, a fifth from the northern fields, and the remainder from the disappointingly impoverished fields of the isthmus (see tables 3 and

4). El Aguila's ambitious refinery at Minatitlán processed more crude from Potrero than the nearby Tehuantepec fields, and its new terminal at Puerto México served almost exclusively to funnel in Potrero crude and funnel out the products refined from this crude.