BAHREIN

SUMMARY OF OPERATIONS

Concession. Originally granted in 1925 to Eastern and General Syndicate, an independent English group. (See chart No. 2.)

Assigned to Bahrein Petroleum Co., Ltd., in 1930, after obtaining approval of British Government.

Area: Original concession contemplating mining lease of 100,000 acres has been extended to cover entire Bahrein Archipelago.

Oil field.—Only one field has been discovered, in central portion of Bahrein Island. (See chart No. 6.)

Refinery. The company operates a refinery of about 135,000 barrels daily capacity only a few miles from the oil field. The refinery includes thermal and catalytic cracking, 100-octane gasoline facilities, SO2 plant, asphalt plant, etc. It handles 20,000 to 25,000 barrels daily of Bahrein crude, and 105,000 to 110,000 barrels of crude transported by submarine pipeline from Dhahran, Saudi Arabia.

Concession. Granted in 1932 by Sheikh of Qatar. Held by Petroleum Development (Qatar) Ltd. (see chart No. 2).

Nationality of company.-British.

Ownership.-Petroleum Concessions, Ltd., in turn owned by same group owning Iraq Petroleum Co. (see p. 16).

Oil field.-Dukhan field in western part of Qatar Peninsula discovered in 1940. Only three wells were drilled, which were plugged as a defensive measure during the war. Operations are now being resumed (1947). The field is probably of major importance (see chart No. 6).

Production, refinery throughput, and crude oil exports from Middle East, 1946

In general, the crude oil exported from the Middle East was processed in European refineries. However, a small amount, probably not in excess of 800,000 barrels, was shipped to the Argentine.

EXPLANATION OF API GRAVITY AND CONVERSION TABLE, BARRELS TO TONS, FOR OIL OF GRAVITY 25° API TO 40° API

The index of specific gravity used in the petroleum industry in the United States, is expressed in degrees API. It is based on a ratio between the weight of equal volumes of oil and water. For ease in conversion the API index is commonly calculated for oil at 60° F. temperature. The following table is based on this

standard temperature.

1 In contrast to the practice in the United States, when crude oil is measured in barrels of 42 United States gallons, the unit of measurement under Middle East oil concessions is the "ton," i. e., the English ton of 2,240 pounds.

The CHAIRMAN. Any figure projected into 1951 would seem to me to be rather problematical, and they are, based evidently on peace as you have emphasized in your statement?

Mr. DUCE. That is right, sir.

Mr. CROSSER. Mr. Chairman, will these maps appear in the record? The CHAIRMAN. So far as we can include them, Mr. Crosser. There is some difficulty with the Government Printing Office in getting some maps in color; but to the extent that it is possible, it will be done, because it tells, as I have already said, a very vivid story and is easily understood.

(The remainder of the maps in question appear below.)

Mr. DUCE. I will be glad to send you any copies of those that you like.

Mr. CROSSER. Of these here?

Mr. DUCE. Yes, sir.

Mr. CROSSER. I would like to have them all.

Mr. DUCE. I mean not only any one, but any number of any one of them.

Mr. CROSSER. I see. I will be satisfied with one copy of each map. Mr. DUCE. Have your secretary let me know what you want and we will furnish them.

The CHAIRMAN. One further question, Mr. Duce. In your opinion are the refineries in Europe equipped to handle this type of oil?

Mr. DUCE. They are being modified to handle it. As a matter of fact, stabilized Middle Eastern oil is easily refined.

The CHAIRMAN. Does Europe at the present time have the facilities, the refining facilities to handle the increased flow of crude which is expected upon the completion of these lines?

Mr. DUCE. No, sir. There will have to be additional refineries built. I believe they are counting on building-I forget the figure,

but as I recall, a 600,000-barrel-per-day refinery capacity in Europe as a part of the European recovery program.

The CHAIRMAN. You will have the privilege, Mr. Duce, of adding to your statement at any point that you wish, having in mind the questions which have been asked of you, any pertinent information that you feel would be helpful, or any other information.

Mr. DUCE. Thank you, sir.

The CHAIRMAN. The committee would be interested to have the benefit of it. We have been gratefully benefited by your presence here this morning. You have given us factual information concerning the most important and real problem at the present time in the whole world, from the standpoint of petroleum. We cannot get too much information about that, and we are grateful, indeed, for the contribution you have made.

Mr. CROSSER. Mr. Chairman, just one question.

The CHAIRMAN. Mr. Crosser.

Mr. CROSSER. How far is your operation on the Persian Gulf from Abadan?

Mr. DUCE. About 300 miles.

Mr. CROSSER. About 300 miles?

Mr. DUCE. About 300 miles. Abadan is about 300 miles north.
Mr. CROSSER. Are there any operations near Abadan?
Mr. DUCE. There are refineries at Abadan.

Now, they also have producing operations at Kuwait; and they are producing oil here [indicating] and our concession touches Kuwait. The CHAIRMAN. Are there any further questions, gentlemen?

Mr. HALE. Mr. Duce, you spoke about the impossibility of research in Russia; expressing doubt about their knowledge. Of course they must have good petroleum geologists in Russia.

Mr. DUCE. They have.

Mr. HALE. They have been operating for many years.

Mr. DUCE, Yes; when I used the word "knowledge" I meant the application of the knowledge.

Mr. HALE. I was wondering if you were differentiating between geology and petroleum technical knowledge; I mean, the knowledge of the earth's surface, and the knowledge of refining of oil.

Mr. DUCE. They have good geologists. They have done some very good geological work; basic geology. It is in the application of it to the oil business where they fall down. I will give you an instance, that happened to me, that I think should be off the record.

(After informal discussion off the record the following proceedings were had:)

Mr. HALE. Thank you.

Mr. DUCE. It is the system I think that has stopped them, not the individual.

The CHAIRMAN. Mr. Duce, you have already been very generous in the time you have given to the committee and also the efforts that you have put into preparing these charts and this statement and these other facts which you are presenting to the committee. Would it be trespassing upon your generosity if I suggested that in the event our staff would need some additional information to complete our records that you would be pleased to give us the benefit of your information?

Mr. DUCE. Anything we have, sir, is at your service.

The CHAIRMAN. Thank you.

Mr. DUCE. Thank you.

The CHAIRMAN. The committee will recess until 2 o'clock. (Thereupon, at 12:20 p. m., the committee took a recess until 2 p. m. of the same day.)

AFTER RECESS

(Whereupon, the committee reconvened at 2 p. m., pursuant to the taking of the noon recess.)

The CHAIRMAN. In connection with the study which the committee is making of the fuel situation, the Office of Defense Transportation has been asked by my communication addressed to it, dated January 20, to appear before the committee and make a report as to what has been done or what is contemplated to be done by the Office of Defense Transportation with reference to the recommendations and suggestions made by the committee in its resolution of December 19.

In reply to this communication, the Office of Defense Transportation is represented today by Mr. Homer C. King, Deputy Director of the Office of Defense Transportation and Director of the Bureau of Service, Interstate Commerce Commission, who is prepared to make a statement.

I suggest that the statement of Mr. King be received and that the opportunity to question Mr. King or Colonel Johnson be delayed until a further meeting of the committee.

STATEMENT OF HOMER C. KING, DEPUTY DIRECTOR OF THE OFFICE OF DEFENSE TRANSPORTATION AND DIRECTOR OF THE BUREAU OF SERVICE, INTERSTATE COMMERCE COMMISSION, WASHINGTON, D.C.

Mr. KING. Mr. Chairman and members of the committee, paragraph 7 of the resolution adopted by this committee concerning the present shortages of fuel oil requires that [reading]:

The Office of Defense Transportation should take all possible and appropriate action to accomplish the most efficient possible use of tank cars.

Paragraph 8 requires that:

The President and the Department and Agencies of the Government should take all other possible and appropriate action to aid in alleviating such shortages.

I appear here pursuant to the request in Chairman Wolverton's letter, dated January 20, 1948, in which he asked that I advise the committee of the action taken by the Office of Defense Transportation in this connection.

Shortly before our last appearance before your committee with reference to this same subject on December 17, members of my staff had attended a conference called by Senator Tobey concerning the shortage of fuel in New England and the northeast, and on December 2, with my staff, I attended a hearing of Senator Wherry's Smalll Business Committee on this subject. In this report I cover the activities of the Office of Defense Transportation since the date last mentioned.

I advised Senator Wherry at the hearing that this office had already taken some steps to alleviate the fuel shortage by endeavoring to

obtain the maximum utilization of tank cars suitable for the movement of petroleum products, particularly fuel oil, and that we would intensify and continue our efforts to the greatest possible extent. That has been done.

As one of my first actions I requested Division 3 of the Interstate Commerce Commission on December 2 to issue Service Order 798, entitled "Demurrage Charges on Privately Owned Tank Cars." This order, a copy of which I have here, became effective at 7 a. m., December 20, 1947, and will expire on March 1, 1948.

The CHAIRMAN. At this point a copy of that order will be made a part of the record.

(The order is as follows:)

TITLE 49-TRANSPORTATION AND RAILROADS

CHAPTER I-INTERSTATE COMMERCE COMMISSION
SUBCHAPTER A-GENERAL RULES AND REGULATIONS

PART 95-CAR SERVICE

SERVICE ORDER No. 798

DEMURRAGE CHARGES ON PRIVATELY OWNED TANK CARS

At a Session of the Interstate Commerce Commission, Division 3, held at its office in Washington, D. C., on the 2nd day of December, A. D. 1947.

It appearing, that there has been a marked increase in production and consumption of commodities requiring domestic movement by privately owned tank cars over the past year; that since 1932, except for certain years and especially the war years, when requirements have been deferred, there has been a progressive reduction in private ownership of such special equipment; that undue delays to privately owned tank cars in railroad service must be reduced to assure maximum utilization of such special equipment; that privately owned tank cars in railroad service held for unloading, reconsigning, diversion or reshipment, without limitation of time on private tracks at destination diminishes and retards the use, control, supply, movement, distribution, exchange, interchange, and return of such special equipment and is contrary to the interest of the public and the commerce of the people; that such use of this equipment impairs the provision for adequate transportation to meet the needs of our commerce; the Commission is of the opinion that an emergency requiring immediate action exists in all sections of the country.

It is ordered, That:

§ 95.798 (a) Tariff Rule suspended on private tank cars. Rule 1, Section B, Paragraph 4 (a), Page 9, Supplement 52, of Association of American Railroads Freight Tariff 4-Y, I. C. C. No. 3963, supplements thereto or reissues thereof, is hereby suspended and the provisions of paragraph (b) hereof shall be substituted therefor by each common carrier by railroad subject to the Interstate Commerce Act.

(b) Private tank cars are subject to demurrage charges. Rule 1, Section B, Paragraph 4 (a) Private cars on private tracks when the ownership of the car and track is the same (See Note 1.) except that loaded private tank cars of A. A. R. Mechanical Designation “TM”, “TMI”, “TA”, “TAΔ, “TP" (See Exception 1), or "TPI" (See Exception 1), as described or listed in The Official Railway Equipment Register, I. C. C. R. E. R. No. 285, or reissues thereof, issued by M. A. Zenobia, Agent, when held for unloading, reconsigning, diversion or reshipment, are subject to these demurrage rules of the same extent as cars of railroad ownership.

Exception 1. This provision is not applicable to tank cars designated "TP" or "TPI" when loaded with Anhydrous Hydrofluoric Acid, Carbon Dioxide, Chlorine, Ethyl Chloride, Ethylene Oxide, Metallic Sodium, Methyl Chloride, Sulphur Dioxide or Motor Fuel Anti-knock Compound. (c) Application.

(1) The provisions of this order shall apply to intrastate and interstate traffic. (2) "Private tank cars" includes those owned or controlled by national, state and municipal governments.