Oscar Wyatt
Oscar Sherman Wyatt Jr. | |
|---|---|
| Born | July 11, 1924 Beaumont, Texas, U.S. |
| Occupation | Entrepreneur |
| Known for | Founder of Coastal Corporation |
Oscar Sherman Wyatt Jr. (born July 11, 1924) is a prominent American entrepreneur and a self-made millionaire, recognized as the founder of Coastal Corporation. A decorated bomber pilot during World War II, Wyatt faced trial in 2007 in a federal court in Manhattan for allegedly making illicit payments to Iraq under the Oil-for-Food Programme.
Early background
Wyatt was born into a financially disadvantaged family in Beaumont, Texas and raised by his single mother in Navasota, Texas. At age 16, he began working as a crop duster to support himself. He enrolled at Texas A&M University but left in 1942 to join the United States Army Air Forces as a pilot. Serving in the South Pacific theater, he sustained two injuries and earned military honors by the time he was 21. After completing his service, Wyatt returned to Texas A&M and obtained a Mechanical Engineering degree while simultaneously working as a farmer.
Wyatt’s initial professional endeavors involved selling drill bits from his car trunk to small oil firms. He subsequently worked for Kerr-McGee and Reed Roller Bits before becoming a partner at Wymore Oil Company. In 1955, with an $800 loan secured against his vehicle, he launched Coastal Corporation.
Texas oil industry figure
A 2007 Texas Monthly profile described Wyatt as the genuine "J. R. Ewing" of the petroleum sector, emphasizing his partnership with his fourth wife Lynn Sakowitz, who was known within Houston’s social scene as the beauty and the beast. Wyatt gained a reputation as a savvy and occasionally contentious businessman who cultivated personal relationships with influential figures such as Saddam Hussein of Iraq and Muammar Gaddafi of Libya. He counseled President George H. W. Bush against military action in Iraq over Kuwait and played a role in securing the release of Western hostages held in Baghdad. Entering the refining business during the early 1960s, Wyatt participated in OPEC gatherings and leveraged U.S. refineries’ preference for high-sulfur crude by sourcing Iraqi oil beginning in 1972. Although he stepped down as Coastal Corporation chairman in 1997, he continued as Executive Committee chairman until Coastal was acquired by El Paso Natural Gas Company in 2001.
Coastal Corporation overview
Founded by Wyatt in 1955 as Coastal States Gas Producing Company, the enterprise started modestly with 68 miles of pipeline and a workforce of 78 employees. Coastal’s strategy involved consolidating gas supplies from smaller producers to negotiate improved rates with larger pipeline operators.
Through strategic acquisitions and diversification efforts, Coastal expanded into a leading energy firm involved in producing and marketing petroleum products, natural gas, electricity, and coal. By 1999, Coastal Refining and Marketing managed 962 service stations across 33 states supported by four refineries: a 150,000 barrels-per-day facility located in Corpus Christi, Texas, a refinery processing 180,000 barrels daily at Eagle Point, New Jersey, a 250,000 barrels-per-day refinery on Aruba, and a smaller asphalt-specialized refinery producing 25,000 barrels per day in Chickasaw, Alabama. The company also owned and operated an array of oil tankers, tugboats, and barges.
In 1991, Coastal reported sales totaling $9.549 billion. The company was an essential supplier of marine diesel fuel throughout the Caribbean region, natural gas within Colorado, and heating oil across the Northeastern United States. Alongside competitors such as Enron, Williams, and El Paso Energy (which later merged with Coastal), it stood as a significant producer and distributor of natural gas. By the 1990s, Coastal controlled an extensive pipeline network spanning approximately 20,000 miles—including major lines like the Iroquois and Great Lakes pipelines completed in 1991 and the Empire State Pipeline finished in 1992—that transported five billion cubic feet of natural gas daily. As of 1999, Coastal ranked among Fortune 500 companies with a workforce numbering 13,300 employees and annual revenues reaching $8.2 billion.
Proxy contest
In 2003, Wyatt along with other investors initiated legal action against El Paso Corporation, accusing it of misleading shareholders about its plans for Coastal assets prior to their 2000 merger. Following the merger, beginning in 2001, El Paso started selling off Coastal assets to address escalating debt incurred through an aggressive business strategy reminiscent of Enron's approach. The company took on substantial leverage to penetrate new electricity markets and obscured liabilities by allocating them to offshore subsidiaries. In June 2003, Wyatt and fellow investor Selim Zilkha launched a proxy contest aiming to seize control of El Paso and its remaining holdings, which included natural gas pipelines and exploration ventures. Since the merger and revelations regarding management shortcomings, El Paso’s stock value declined sharply by 87% from its $75 high in February 2001. The corporation was burdened with $25 billion in debt, faced multiple shareholder lawsuits, and was subject to regulatory scrutiny.
Iraq
While El Paso Energy divested Coastal’s petroleum marketing and production divisions to competitors such as Valero, Sunoco, and ConocoPhillips, Wyatt became the subject of investigation for illicit transactions with Iraq that breached United Nations sanctions governing Iraqi crude oil sales. In 2007, Wyatt admitted guilt in a U.S. federal court for making payments to Iraq under the Oil-for-Food Program. His defense referenced a commission report led by former Federal Reserve Chairman Paul Volcker, which revealed that nearly half of the 4,500 companies participating in the program paid $1.8 billion in kickbacks and unauthorized fees to Saddam Hussein’s government. Wyatt’s attorneys also contended that he was subjected to potential "vindictive prosecution" by the Bush administration, which allegedly targeted him while neglecting others involved. Prosecutors obtained testimony from ex-Iraqi officials who were granted U.S. green cards in exchange. Wyatt was sentenced to one year of incarceration at the Federal Correctional Complex in Beaumont, Texas.
Resurgence and later years
Following his departure from Coastal, Wyatt continued providing consultancy services for petroleum companies aimed at improving pipeline and refinery efficiency, thereby enhancing shareholder value. He also ventured into frozen food distribution and founded NuCoastal Corporation (later renamed Coastal Energy) in July 2001 to explore international energy prospects, including projects in Malaysia. Coastal Energy was eventually sold for $500 million in 2013. Wyatt celebrated his 100th birthday on 11 July 2024.