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Twentieth-Century Business Archives

Commonwealth Oil Refining Co., Inc. - Lehman Brothers Collection

Commonwealth Oil Refining Co., Inc.

List of Deals

Commonwealth Oil Refining Company, Inc., was organized by Admiral Andrew F. Carter in Puerto Rico in 1953. A 1905 graduate of the United States Naval Academy who saw active service in both World Wars, Carter spent most of his peacetime career in the oil business. The company went on to become the largest investor-owned enterprise in Puerto Rico.

The two related areas of industrial activities of the company were independent refining of petroleum products and the production of aromatics and other petrochemicals. The company commenced operations in 1955 with a refinery that was initially designed to process 23,000 barrels of crude oil per day. It also owned and operated refinery facilities at Guayanilla Bay, Puerto Rico, having a capacity of 115,000 barrels per day.

The first profitable year for Commonwealth Oil since operations began was reported in the 1959 report of the Ponce, Puerto Rico, producer. Net income in 1959 was $3,135,041, including a special credit of $429,968 received from insurance recoveries applicable to 1958. Revenues rose to $71,631,403, up from $60,986,329, on 21,273,000 barrels processed in 1959 against 18,872,000 barrels the year before.

In January 1962 the directors of the company declared a 12 ½ cent stock dividend, payable on March 1 to stockholders of record of January 31. This was the first dividend on common stock in the company's history. Trading in the common shares of the company started on May 12, 1964, on the New York Stock Exchange. The shares were assigned the ticker symbol CWO. The company completed a $5.1 million refinery expansion in the same month. In 1963 the company reported earnings of $10,641,000 on sales of $104,279,000.

In 1965 the company entered the petrochemical business with the completion of its aromatics plant, with a design feedstock charge capacity of 30,000 barrels per day and an aromatics production capacity of 182 million gallons per year. In 1966 the company started construction on its fourth and fifth plants at Peneulas, P. R. One plant, scheduled to make cyclohexane, a principal ingredient of nylon, represented an investment of about $4 million; the other plant, scheduled to make ethylbenzene, principally used in general purpose resins for containers, decorative panels, and toys, was to require an investment of about $5.5 million.

As an independent refiner of petroleum products, the company purchased crude and unfinished oils from and sold refined products to major integrated oil companies or their affiliates. In 1966 approximately 50 percent of its petroleum products were consumed in Puerto Rico, 40 percent of its products were shipped to the U. S. mainland, and the remainder were shipped to other markets.

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