Created: 5/14/1948

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Oil wells In Venezuela and refineries on the adjacent Netherlands West Indies Islands of Aruba and Curacao offer one of the most remunerative targets for industrial sabotage of the Western Hemisphere- Venezuela7 producedercent of all Western Hemisphere oil excluding the US. andercent of Venezuelan production was refined at Aruba and Curacao. Political conditions are generally favorable in both areas, but both areas have particular points of vulnerability to sabotage, especially by trained agents. By crippling either production or refining in these areas, or bythe utility of the specialized tanker fleet which transports the oil from the wells to thc refineries, such agents could seriously affect US capacity either to prepare for or to wage war. Protection against such sabotage would require precautionstaken by the companies concerned, the local governments, and the USat least as comprehensive as those taken under the emergency status.

Note; The InformaUon In this report Is as ofpril IMS.

The Intelligence organizations of lhe Departments of SUte. Army. Navy, and thc Air Force have concurred In this report


7 Venezuelan crude oil productionarrels per day. While this is equivalent to only slightly more lhan one-fifth of the US production, it is aboutercent of all Western Hemisphere production outside of the US. Two-thirds of available Venezuelan exported crude oil is refined on the adjacent Netherlands West Indies islands of Aruba and Curacao. (Venezuelan refining capacity isarrels per day.)

Local political situations both in Venezuela and the Dutch Islands are, in general, favorable for the continuance of operations, but both production in Venezuela andon the islands are vulnerable to sabotage by trained agents. Together orthese Installations constitute one of the most remunerative targets in the Western Hemisphere. If the fields are shut down, the refineries arc of little value, as there is no alternative comparable source of crude. There is at present no additional refining capacity that could be used In place of the refineries on Aruba and Curacao. Furthermore, tankers now used to transport crude from Lake Maracaibo to thccannot make ocean voyages, nor can ocean-going tankers cross thc bar into Lake Maracaibo. Crippling of these wells or refineries woulderious blow to US capacity either to prepare for or to wage war.

The USSR presumably has plans against this area, and it is possible thatsteps have already been taken to put these plans into effect.


Recent political developments in Venezuela arc In general favorable to the US, and the denial to the US of petroleum is unlikely toovernment policy. Communist control of labor is decreasing rather than increasing. There arc several points, however, in which thc producing fields are peculiarly vulnerable to sabotage. There has been, furthermore, ample opportunity for trained saboteurs to enter the country, and they may be assumed to have done so.

Both the Betancourt regime in its last months and the present Gallegoshave shown increasing concern over the potentialities of the Soviet threat, and,esult, Venezuelan policy has moved more and more into the orbit of the US. Thc recent history of the government party. Acclon Democralica, justifies thethat earlier acceptance of support of the Communists (at the time ofarriage of convenience only. It is expected that thegovernment will continue to support US petroleum policy by employing all

The situations as to Venezuela and as to Aruba and Curacao are discussed separately inparagraphs. As other Western Hemisphere InstallationsColombia,ot minor present Importance compared with Venezuela and Aruba and Curacao, theyincluded. Dangers Of enemy direct actionconsiderable particularly against Arubafrom submarines approaching close tore likewise beyond the scope

thc means al its disjxwalhowever scant these maylo protect installations and insure continued production. It is true also that petroleum is thc source of one* third or more of the Venezuelan government's revenue. How readily thc Venezuelans would accept additional assistance from the US, such aspecial security mission, would depend on (a) their estimate of thc immediate danger, and (b) whether the project could be presented to themogical extension of Venezuelan policy in regard to the military and naval missions they have already received.

There can be no doubt thatemocrdl tea's antipathy to Communists is increasing, and that thc party appears determined to remove the Communists from the labor field ln general and from the petroleum industry in particular. Thoroughly reliable figures are unavailable,eport dated8 states that there arcohousand persons employed in lhe petroleum industry, ofre believed to be Communists. In8 the corresponding number wastohen thc national labor confederation (Confcderaclon de Trabajadorci Venezolanos) was formed, Action Dcmocrdtlca prevented the election of any Communists to office. Earlyheommunist members of the board of directors of the national federation of petroleum workershich is the most important federation In the national confederation, were expelled. Thc fact thatof local Communists are limited, however, does not guarantee against any labor disturbances, since strikes for wages could get out of hand and result In considerable reduction of output, even if then: were no deliberate intention to sabotage. Strikes of other unions In allied Industries furthermore (transportation for example) from which Communist control may not yet have been eliminated could have similar adverse effects. It is estimated, however, that these possibilities are of minor importance compared with

thc danger of sabotage by expert agents already in Venezuela or later introduced from outside.

Recent oil-company estimates as to likelihood of sabotage differ, bul enemyare at least as great as they were during World War II, when much more than existing protection was considered necessary. Most vulnerable are the pumping stations, each of which could be destroyedingle explosive charge and would then require aboutonths for replacement; and lhe Los Maroehcs power station In the Laktf Maracalbo district. In addition, the fluids are peculiarly vulnerable in that two-thirds of Venezuelan production Is from Lake Maracatbo, where the rupture and firingingle well couldonflagration almost impossible to extinguish and destructive of the production of the entire area. AL present, key installationsbe considered adequately protected, even though plans for national guard or army posts near danger spots are being considered, and studies madere availableasis for additional precautions. Thc companies hope that thc Venezuelanwill lake the Initiative in requiring employee-identificationtep which the companies are reluctant to take for fear of stirring up labor difficulties-It Is estimated that adequate and immediate protection in case of emergency does not, because of lack of proper training, lie within the capabilities of the Venezuelan police or armed fores.


Several indications suggest that the USSR and thc Soviet Embassy may belor future sabotage operations. The Ambassador himself (accredited sinceetroleum geologist, and hetaff sufficient to direct any agents that may have slipped In. As earlyrained agents are reliably reported to have entered the country, and, though their primary purpose at that time was to stir local Communists to action, it Is entirely possible that they could be used in sabotageas well. Immigration from Russia and satellite countries has greatly increased; the records show no Slavic migrants priorincluding non-Slavs from satellite countries)hile every effortwith the Venezuelan government cooperating in every respecthas been made to screen these people, it is quite possible that well trained agents may have been included among theigrants.

In spite, therefore,enerally favorable situation In governmentalin labor, it must be assumed that expert saboteurs are In Venezuela at present,they have the capabilities,uch more comprehensive protectivewhich US assistance would almost certainly be necessary, of seriouslyoil production. It is probable that this group could also carry out, orassist with, simitar activities In Aruba and

ARUBA AND CURACAO Aboutercent of thc total Venezuelan production of crude oil is refined on Curacao and Aruba. where two of the largest oil refineries in the world arche production of these refineries amounts to about eight percent of the world total or the approximate equivalent of the oil allotments to thc Marshall-plan countriesonsequence these refineriesrimary enemy strategic Western Hemisphere target, especially since their destruction would not only create an immediate shortage of refined petroleum products but would also nullify the utilityarge percentage of Venezuelan crude, since neither the tankers nor refinery capacity would be available to transport and process this oil elsewhere.

In the event ofurther deterioration in the relations between the US and the USSR,ecision by either the US or the USSR lo begin hostile operations against one another or against powers allied to one another by ties of friendship or treaty, intensive efforts to sabotage these icfineries by the USSR are to be expected.

Because or highly favorable working conditions, the friendly attitude of the native population toward the US, and the absence of Communist-directed labor organizations, the possibility of subversive action arising from local Communist penetration of labor Is unlikely. The Netherlands Colonial Government has cooperated with the oilin refusing admission to known Communuis and labor agitators On two recent occasions it has deported those who succeeded in gaining7 Venezuelan crude productionillion baneli.illion were refined in Venezuela,

illionexported Of the exported crude ISO million went to Aruba and Curacao.

li milljon io the US.illion to Prance, and smaller quantities lo vsrloui other countries.

More Uianercent of ihe crude received at Aruba and Curacao is from Venezuela, ihc balance

l* from Colombia.

templated changes in the political status of Curacao and Aruba might temporarily affect the ability of the US to safeguard the security of the refineries. However,arising fromhange could rapidly be solvedanner satisfactory to US strategiche oil companies themselvesirm control over labor and have encouraged the growth of employees' advisory committeesevice to combat the rise of labor unions. On Curacao, such unions as exist are sponsored by the Roman Catholic Church and concern themselves primarily with welfare problems. On Aruba, the labor union is primarily the personal creationingle individual, Hcnny Eman, and is designed to maintain his political power. There has been no notable labor unrest on either island

In thc absence of Communist penetration of labor organizations, Soviet sabotage activities will therefore be confined to direct operations against the refinerythemselves by trained Soviet operatives. These agents will, it is estimated, enter thc colony in the guise of either migrant laborers or commercial travelers from Venezuela and/or other Caribbean areas (Soviet agents are reported to have been among recent DP arrivals inr directly from Soviet submersible craft ordered to the area for thc purpose of transporting operatives to their targets.

Present security measures for protecting the refineries from direct sabotage by Soviet agents are inadequate. Although employees wear number-picture badges, there is no patrol of property lines or fences. Intelligence coordination between the Colonial Government and company management on the one hand and Western-powerservices on the other are not adequate to prevent the inadvertent hiring ofexperts. The US does not maintain security personnel on the islands. TheGovernment merelyolicy of denying entrance to Curacao and Aruba of all known Communist agitators as distinguished from specially trained saboteurs. In case of emergency, there are not sufficient Dutch troops on the Islands to afford adequate protection either to Uie refineries or to harbor installations, which are particularly sensitive to sabotage because of the geographic configuration and hydro-graphic condition.

Favorable factors for the protection of Uie refineries from sabotage are Uieof effective Ore-fighting organizations and equipment, the presence of guards throughout Uie refineries and at plant entrances, plans for Uie establlshmenl ofposts at strategic points, antisabotage and defense experience gained during World War II, and the friendly disposition of the Netherlands Colonial authorities toward whatever security precautions Uie US may elect to take.

Despite these favorable factors, however, and in the absence of additionalon the parthe Netherlands Colonialhe refineries themselves,he US government. It is estimated that Soviet sabotage onand Aruba would succeed in matcriul reduction of the productive capaelUes of Ihc refineries.



Secretary olt*

Cruet or Staff to Commander tu Chief

Secretary of Defense

Secretary of the Army

Secretary ot the Navy

Secretary of tho Air Force

Executive Secretary, National Security Council

Chairman, National Security Resources Board

Chief of Staff, US Army

Chief of Naval Operations

Chief of Staff, US Air Force

Director of Plana and Operations, Oeneral Staff, US Army

Deputy Chief of Naval Operations (Operations)

Director of Plans and Operations, US Air Force

Special Assistant to tbe Secretary of State, Research and Intelligence

Director of Intelligence, General Staff, US Army

Chief of Naval intelligence

Director of Intelligence, US Air Force

Secretary, Joint Chief* of Staff

Secretary, Joint Intelligent* Group

Secretary, State-Army-Navy-Air Force Coordinating Committee

Executive Secretary, Military Liaison Committee to the Atomic Energy Coromts&loD

Director of Security and Intelligence, Atomic Energy Commission

Chief, Acgulslnoo and Distribution. OICD, Department of State

Original document.

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