The Crude Oil Producers

4.2 Structures of the Industry

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Four main players

To understand the structure of the oil industry at this time, we can divide it in four stages (between the well and the lamp). For each stage there is a player.

The crude oil producers

Among the most enterprising Americans, these men were all looking for the same thing in the muddy oil fields : fortune. Many found it, as the profits were huge in the beginnings. It was not unusual for an oilmen to get a 100 % return on his invested capital. The equipment needed was rather simple (concession, derrick, casks) to be a competitor for those producers already present. The wildcatter (independent digger), young man struck with oil fever gathered his savings or those of his family and borrowed as much as he could and he could start ! Concessions were negotiated everyday in mushroom towns that grew one after the other behind the oilmen, and with some luck huge fortunes could quickly piss from the meager equipment. The enormous affluence in the oil regions can thus easily be understood.

Natural competitors and often staunchly independent, the oil diggers were only able to unite when collectively faced with the most gigantic difficulties, and as soon as the storm disappeared they divided again. All the cartels, councils, organizations never lived more than a few years. You can thus see how these scattered, atomlike producers were at the mercy of such an inflexible organization as the Standard Oil.

The only collective bodies that survived for some time were the newspaper, like the famous Oil City Derrick, in which the latest deeds of the Standard were described, and which occasionally served as a tribune to mobilize the independents.

Georges Getty was the father of Jean Paul Getty
George Getty left his job as an insurance clerk to strike it rich in Oil at the age of 45

Jean-Paul Getty's father, George Getty, worked for an insurance company when in 1903, at 45, he was sent by his company in Oklahoma to collect a bad debt. Upon seeing for the first time the extraordinary euphoria surrounding oil extraction, he left insurance at once and started a new life as an oilman. He bought a concession for $ 500 and after 6 month already had 6 wells yielding about 10'000 barrels a month. In three years he became a rich man, with mansion, driver, gardener and Japanese cook. Such destinies were common in the oil regions, and so you'll understand that hordes of adventurers poured each year in the oil fields.