Lago Oil and Transport Company
| Company type | Subsidiary |
|---|---|
| Industry | Maritime shipping, Oil refining |
| Founded | 1924 |
| Founder | Standard Oil Company (parent company) |
| Defunct | 1985 |
| Fate | Operations ceased and refinery dismantled |
| Headquarters | San Nicolas , Aruba |
Area served | Lake Maracaibo, Aruba, United States, international markets |
| Parent | Standard Oil Company (now Exxon) |
Lago Oil & Transport Co. Ltd. was established in 1924 as a maritime shipping enterprise focused on moving crude oil from Lake Maracaibo to a transshipment terminal located on Aruba. As a subsidiary of Standard Oil Company (now known as Exxon), the Lago refinery remained operational until March 31, 1985, when Exxon ceased operations and dismantled both the refinery and the associated Lago Colony.
History
The discovery of vast crude oil deposits beneath Lake Maracaibo presented logistical difficulties because the shallow waterways could not accommodate large oceangoing tankers. To overcome this obstacle, the Pan American Petroleum and Transport Company, which held leases in the lake area, created Lago Petroleum Corporation (active from 1923 to 1932) to manage lake tankers that transported crude oil to Aruba.
On August 14, 1924, Captain Robert Rodgers, serving as a Scottish representative for Lago Petroleum, identified San Nicolas harbor as an optimal transshipment location due to its closeness to production fields, political stability, and existing infrastructure. By November of that year, efforts were underway to expand the harbor and construct oil storage facilities. While these facilities were being built, crude oil was transferred via tankers anchored near Oranjestad for shipment to refineries in the United States where it was processed into fuels such as gasoline and diesel.
The refinery’s construction commenced on February 24, 1928, with initial focus on developing residential accommodations for American employees and their families.
Refinery
In 1928, Standard Oil of Indiana (later Amoco) took ownership of the Lago transshipment operations and Lake Maracaibo oil assets, establishing a modest refinery adjacent to the port. Anticipating U.S. tariffs on crude imports, Standard Oil of Indiana sold these holdings to Standard Oil of New Jersey (which eventually became Exxon), a company with extensive international marketing networks.
By 1938, Standard Oil of New Jersey had secured an agreement to supply Britain with 100 octane aviation gasoline produced outside U.S. jurisdiction, circumventing American isolationist policies prior to World War II. Because Aruba was under Dutch sovereignty, the Lago refinery could legally manufacture aviation fuel without restrictions, leading to considerable expansion well before America’s involvement in the war.
Wartime
Following the United States’ entry into World War II in 1942, demand for aviation gasoline increased dramatically, resulting in substantial enlargement of the Lago Refinery. This growth elevated Lago to one of the world’s largest refineries—second only to Royal Dutch Shell’s facility in Curaçao—and made it a vital supplier of petroleum products for Allied forces.
Due to its strategic importance, German military forces targeted the refinery during their Attack on Aruba. On February 16, 1942, the German submarine U-156 launched an assault but failed to inflict damage on the refinery because of an accidental explosion caused by a gunner’s mistake. Nevertheless, three lake tankers carrying crude from Lago Maracaibo were successfully torpedoed.
Postwar
After World War II ended, the Lago Refinery operated at maximum capacity with a workforce exceeding 10,000 employees. This included roughly 1,000 foreign supervisors alongside predominantly local workers from Aruba and laborers imported from the British West Indies. The foreign managerial staff lived within Lago Colony, a company-owned residential area near the refinery.
In 1985, Exxon Corporation shut down and began dismantling both the refinery and its associated colony. Prior to complete dismantlement, ownership transferred to the government of Aruba which subsequently sold it to Coastal Corporation. Coastal reopened the facility after extensive renovations but operated it at reduced output levels. Later ownership passed to Valero Energy Corporation. By late 2017, control of the refinery had been assumed by Citgo Petroleum Corporation.