COLOMBIA: Good Deal

In the flag-draped little oil town of El Centro one night last week, a band imported from Bogotá played The Horrible Night Has Ended,* Colombia’s national anthem. Then, the Colombian Minister of Development and the president of International Petroleum Co., Ltd. (a Standard Oil Co. of New Jersey affiliate) signed the papers spread out in front of them. After that came handshakes, applause, toasts, speeches. With good feeling all around, International had handed its 2,000-square-mile De Mares oil concession back to Colombia.

In 1944, Colombia’s supreme court ruled that International’s 30-year contract would expire on Aug. 25, 1951. Instead of trying to fight the decision, International accepted it with good grace. Last year, the company and the Colombian government worked out an agreement by which International would 1) give up De Mares without compensation, 2) supply refinery technicians under a five-year contract, 3) handle distribution and sales under a ten-year contract.

It was a good deal for both the country and the company. International keeps a slice of the profits for at least ten years more. Colombia got De Mares, together with its 1,030 wells and its other installations (including the refinery at Barranca Bermeja), without paying a centavo. Also, the Colombian government showed the world’s oilmen that it is willing to do business fair & square—a good thing for Colombia, which needs foreign capital and know-how to help get its oil out of the ground.**

*Having no official tide, Colombia’s himno national is frequently referred to by the first line of its first verse: “Cesó la horrible noche.” It continues: “Sublime liberty brings on the dawn with its invincible light.” The “horrible night” was the period of Spanish rule. **For word of another kind of oil deal, see

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