Come & Get It

Almost every day this month, the Venezuelan government's ordinarily dry Gaceta Oficial has been publishing a flood of mouth-watering news. For the first time in eleven years, and for fabulous sums, the government is selling off new oil concessions, some from the rich, crude-soaked national reserves.

Under the 50-50 provisions of Venezuela's pattern-setting oil law of 1943 and subsequent legislation, foreign oilmen, once they are in production, must pay at least half of their profits to the Venezuelan treasury. But to get concessions in the first place, they must make bids, offering what the law calls "special advantages" to Venezuela, e.g., guarantees to refine more oil in Venezuela, bonuses of plain cash. The bidders, for the most part big foreign oil companies, have generally chosen to pay cash. The government has recently collected, or is about to collect, a cool $310 million for 720,000 acres of concessions. Item:

P: Creole Petroleum Corp., a Standard Oil Co. (N.J.) affiliate and Venezuela's biggest producer, bought 24,700 acres of underwater concessions in Lake Maracaibo, where a saucer of water lies over what seems to be an ocean of oil. Creole also took on 98.800 acres of exploration concessions in lands of still unproved value. Total cost: $25 million.

P: Royal Dutch-Shell got 59,300 acres of lake concessions, plus 98,800 acres of exploration concessions. The company paid as much as $2,500 an acre for the choicest lake-bottom. Total cost: $65 million.

P: Mene Grande Oil Co.. a Gulf Oil Corp. subsidiary, got 126,600 acres of lake concessions and 98,800 acres of exploration areas. Cost: $121 million.

P: Signal Oil & Gas Co. of Delaware, Superior Oil Co. of California, Sun Oil Co. of New Jersey and otherU.S. firms in various combinations got 108,000 acres in lake concessions and 74,100 acres for exploration. Cost: $79 million.

P: Venezuelan-American Independent, a new company, popped up with 24,700 acres in the lake. Cost: $20 million.

The national reserve concessions were said by oilmen to be "money in the bank." Others, although they lay in about 100 ft. of water and 20 or 30 miles out from the present forest of more than 2,000 derricks that stud the lake's northeastern shallows, were highly promising. But the exploration areas that in most cases came packaged with the exploitation concessions were not so much ready wealth as they were another "special advantage" for Venezuela. One reason for suddenly selling new concessions after a dried-up decade is that Venezuela needs to get outlying regions explored.

But the major reason is that the strong-arm government of President Marcos Perez Jimenez, bent on buying popularity through a spectacular splurge in roads, schools and public housing, is pouring out even more than its whopping oil income of about $600 million a year. Selling new concessions is a way to get plenty of quick cash. With oilmen flying south on nearly every plane, and with the likes of Texas' Multimillionaire Wheeler-Dealer Clint Murchison settling down in Caracas' Hotel Tamanaco, the Gaceta Oficial will probably print a lot more exciting news in coming months.

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