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The Birth of the Oil Industry and its effects in the Region

Tampico occupies an important place in the history of the oil industry in Mexico, without being the place where the oil fields where located, most of the oil activities took place here, getting the benefits of this economic growth and becoming its best era in its history.  That is why is called the Golden Era of Tampico.

The oil industry in Mexico starts thanks to the American Doctor Adolfo Autrey, who in 1880 starts to distil in a modest way the oil that he obtained in some fields near Papantla, Ver. to sell it as fuel for illumination purposes. When Dr. Autrey tried to increase its production to a higher volume he failed, and decided to change its business and started a pharmaceutical business in Tampico.

In November 1884, the government of Porfirio Diaz issued the Mining Code for Mexico that recognized the ownership of all minerals for the owner of the land. With this new law, the intention was to promote foreign investors and use their technology to exploit the oil from the Mexican soil. In 1886, the company Waters Pierce Oil started operations in the region with a new oil refinery in Arbol Grande, this will process the heavy crude oil extracted by the Standard Oil from its U.S. operations to supply the Mexican market.

At the end of 1899 the Californian oilman, Edward L. Doheney arrived to the region accompanied by his partner, the geologist, Charles A. Canfield to survey the oil fields in the Huasteca region. After several explorations, they located an oil fountain that motivated them to acquire 113 has. From the Hacienda El Tulillo in the municipality of Ebano, S.L.P. Later, they incorporated the Mexican Petroleum Company of California and hired the services of the Mexican geologist, Ezequiel Ordoñez, who in May 1901, started the “Doheney I” considered as the first oil derrick of the Mexico with an initial production of 50 daily barrels.

The past events forced the Mexican Government to modify the law in oil related matters and gave birth to the new oil law of December 24th, 1901 allowing faculties to grant permits for the exploration and exploitation of the Mexican offshore and inland territory.

The Mexican Petroleum Company continued its explorations and in April 1904 the oil well “La Pez 1” started production with a daily output of 1,500 barrels. By 1907, Doheney had already incorporated the Huasteca Petroleum Company and during the same year the Cia. Pearson & Son, later known as Cía. Mexicana de Petróleo El Aguila started operations building its refinery plant in Doña Cecilia. On both margins of the Pánuco River plants where installed by other foreign companies like La Corona, the Mexican Gulf Oil, Sinclair Oil, Standard Oil and Texas Oil.

In 1908 Doheney and Ordoñez located over the coastal plains of the Gulf of Mexico, only 75 km From Tampico, the famous “Faja de Oro”. The oil found in this mant was discovered with the oil well “Pozo Dos Bocas” property of Pearson & Son, putting Mexico in the position as the second largest oil producer.

The international companies kept on arriving to the region and in 1910 the Standard Oil Company and the Royal Dutch Shell started operations. In the same year, the national output went over the 12,000,000 barrels of which 90% came from the “Faja de Oro” mantes. In 1911, oil exports started and when World War I began (1914-1918) sales growth to the United States and England having then a cost of a dollar per barrel.
The oil wells with higher production output at that time were: The “Casiano No. 7” (1910), the “Potrero del Llano No. 4” (1911) and the “Cerro Azul No. 4” discovered by E. Ordoñez and drilled in 1916, considered as one of the most spectacular wells worldwide with an estimated production of 260,000 barrels per day. By 1917, Mexico had the third place in the world’s production with an estimated output of 55,000,000 barrels.

Progress in Tampico was huge, not only due to the sale, purchase and leasing of wells and land but by the collateral activities of this market and concentrating a higher volume of the foreign and domestic investment in Mexico. Port activities increased, becoming the second oil exporting port in the world with a volume that just in 1921 was of more than 2,500 ships.

Commerce prospered considerable and one could find in downtown’s stores fine goods from all over the world; this commerce brought the immigration of Spanish, Lebanese and Chinese who were looking for jobs and opportunities to do businesses. By 1921, the official census was a population of 44,822 inhabitants with a floating population of more than 100,000.

The city had an unexpected growth, residential suburbs were built surrounding the Chairel’s Lagoon: Altavista, Colonia Aguila and Colonia Flores as well as numerous suburbs for the middle class. In only a few years, Tampico changed its physiognomy becoming a prosper and modern city with beautiful buildings, residential suburbs, excellent commercial establishments, sport and social clubs. The cultural life grew also, radio stations and English and Spanish written newspaper were published.

In 1925, the interest of the oil companies were severely affected by a new legislation created due to the irrational exploitation of crude oil, that forced them to request the confirmation of their franchises within a year period, losing their character of “unlimited term” and were assigned a life of 50 years. When the oil companies did not follow these procedures, they had their drilling permits cancelled and they moved to Venezuela that was becoming an important country in this international market.

When the law of 1925 became operational in 1927, the massive layoffs of oil workers started, the region’s economy declined and the oil industry was paralyzed, all commercial activities were seriously affected and by 1928 the domestic output was reduced by more than 75%.

Those that had their main business activities linked to the oil companies went bankrupt and abandoned the city, as well as Mexican and foreign investors and many others, Tampico lost its position as the first Mexican port and ceased to be one of the most populated cities in the country.

Little by little the city assimilated the changes, and its population adapted to the new environment, using past experiences to start new companies and as in its foundation become a workman’s community and part of Mexico’s future.


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