The Unknown Giant

From under the white sands along the Persian Gulf two new oil wells gushed up 4,400 bbl. a day last week. The twin strike, in the Wafra field of the 50-mile-square Neutral Zone between Kuwait and Saudi Arabia, meant more than just a new source of oil. For Wafra, it pushed output above 50,000 bbl. a day and increased estimated reserves to more than 5 billion bbl. For a tall, stoop-shouldered American named Jean Paul Getty, it was a multimillion-dollar payoff on a daring gamble.

Getty Oil Co., which is 82% owned by Getty and which controls a $1.5 billion oil-and-tanker empire, bought a 50% interest in the Neutral Zone eight years ago, when it had yet to produce a drop of oil. Today Getty holds one of the most important stakes in Middle Eastern oil, where he is the only U.S. individual producer among the giant corporations. Says Getty: "I own my companies. How many others do? There are just a few left like me."

To get his oil to market, Getty is as busy building tankers as he is drilling wells. For Tidewater Oil, which is also controlled by Getty, he has embarked on a $250 million program to build supertankers to carry Getty Co. oil from the Neutral Zone to its major markets in Western Europe, Japan and the U.S. Last weekend the 53,000-ton S.S. Tidewater slipped down the ways at Saint-Nazaire, France. It was the ninth new tanker for Tidewater since 1954 and the second in the past month. Sixteen more are on order at cut-rate French and Japanese shipyards. The total tonnage for all 25 will be 1,234,530 d.w.t. For his flagship, Getty is now dickering to build a 130,000-tonner in France. Said Getty: "My competitors have been burdened with small tankers. I am determined to obsolete their fleets by building no tanker less than 46,500 tons."

Sugar Candy. Oilman Getty, 64, is one of the least known among the world's oil giants, usually breaks into the press only with news of his marriages and divorces (five of each). An expatriate, he lives in hotel rooms from Europe to the Levant, has little social life, usually eats alone and frugally, wears out-at-the-elbow sweaters. A notorious penny pincher, he passes out tips sparingly, constantly grumbles about the high cost of everything from restaurant food to taxi fares. But he freely pays thousands for such hobbies as his private art museum (Rubens, Titian, Gainsborough, and perhaps the best U.S. collection of Louis XV and XVI furniture) and the zoo (four buffalo, two bears, an Abyssinian mountain goat), adjoining the Malibu home he has not visited in five years.

Getty's everyday pleasures are munching maple sugar candy and talking over big-wheeler deals in English, French, Arabic, German, Spanish or Italian. He has plenty to talk about. Besides his $300 million interest in Getty Oil, he controls 64 1/2% of Tidewater Oil*($460 million worth), 59% of Skelly Oil (worth $335 million). He also has .417% of the Iranian Oil Consortium (worth about $8,000,000) and Oklahoma's $15 million Spartan Aircraft Co., $10 million worth of real estate from Acapulco to Manhattan's plush Hotel Pierre.

Rich Man's Son. Getty had a good headstart on the way to his fortune. His father, George Getty, a wildcatter, left an after-tax estate of more than $8,000,000 when he died in 1930. About 90% of it went to Paul Getty's mother, $1,000 to charity and only $500,000 to Getty because the father disapproved of his marital escapades. Nevertheless, Getty persuaded his mother to wager the family's stake on the chance of becoming an oil major-leaguer by buying into oil companies. He took over the Pacific Western Oil Corp., then liquidated its $12 million investment portfolio, sold some of its leases, and borrowed heavily to raise cash for bigger game. Quietly he bought shares in the big Tidewater Oil Co. at depression prices.

Large blocks of Tidewater were held by Standard Oil Co. (N.J.), which created Mission Corp. as a holding company for Standard's stock in Tidewater and Skelly Oil. So Getty started to buy into Mission. By 1936 Getty owned 46% of Mission's stock, by far the biggest share, and elected all but one of his directors in a bitter proxy fight. That gave him control of Skelly Oil, but not quite enough to pocket Tidewater. After three years of knee-and-gouge battle, Tidewater made peace with

Getty, allowed him a voice in management. Over the years Getty increased his Tidewater holdings and today is the company's dominant figure.

The Gamble. During these early skirmishes, oil executives looked down upon J. Paul Getty as a "stock man" rather than an "oil man." But Getty proved he was an "oil man" in the Middle East, where he felt he needed reserves to mold an integrated oil empire. In 1949 he bought the oil rights to Saudi Arabia's 50% interest in the Neutral Zone. The price: a sky-high $9,500,000 plus a minimum $1,000,000 a year for three years -against royalties of 55-c- a bbl. Then Getty pumped $3,000,000 into exploration and development. Not until 1953 did a showing of oil come up from 3,500 ft. to indicate that his gamble would pay. That year the zone produced 7,559 bbl. of crude. In 1954 it zoomed to 2,977,094 bbl., in 1955 to 4,351,741 bbl., and by last year Getty Oil Co. alone was transporting 25,000 bbl. a day to the Persian Gulf through its 10 3/4-in. pipeline.

The Richest? Now Getty is taking the last step toward a fully integrated oil empire that will run from producing field to gas pump. Tidewater will soon finish a $200 million refinery on the Delaware coast, and by May the plant will be producing 130,000 bbl. of gasoline and fuel daily. It will also have one of the world's biggest single fluid catalytic crackers (processing: 102,000 bbl. a day).

Such bold expansion has sent up the market value of the stock of all Getty's interests. Getty Oil Co., which issues only stock dividends on its common so that all profits can be put back into expansion, has climbed from 11 in 1950 to last week's 45 1/4. Still Paul Getty is dissatisfied. As one of his few close friends explained: "Getty is not content being one of the richest men in the world; he wants to be the richest."

*These holdings spread-eagle over a fantastic corporate maze. Getty Oil Co. owns 14% of Tidewater. It also holds 42% of Mission Development Co., which in turn owns 47% of Tidewater. And Getty Oil owns 47% of the separate Mission Corp., which itself owns 10% of Mission Development Corp. and 3 1/2% of Tidewater.

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