Agus Setiawan

• Competition for control over the exploration, exploitation, distribution and marketing of the world’s oil sources has been a key feature of 20th century history. Competition was usually fierce; oil is a highly sought after commodity and was an essential part to industrialization efforts. In Southeast Asia, in particular in the Dutch Indies in the late 19th and early 20th century, competition for oil was fought between three companies: the oil companies Standard Oil and Royal Dutch, and the transportation company – Shell Transport and Trading Company. The latter two companies would merge into one of the biggest oil companies in the world, and become Royal Dutch Shell. Competition between Standard Oil and Royal Dutch Shell would eventually involve not only the two companies but also the governments of the two countries they were headquartered in: that is the United States of America and The Netherlands. Washington and The Hague became involved once it was clear that the Dutch were attempting to prevent Standard Oil from operating in the Dutch Indies by refusing to grant oil concessions to the American company. The United States Government was concerned about the energy crisis at the end of World War I, and so supported American companies’ oil efforts, in particular Standard Oil of New Jersey, to obtain oil concessions abroad, including in the Dutch East Indies. At the same time, the Dutch sought to support the Dutch oil companies’ in their quest to dominate the oil industry in the Dutch Indies, and so issued the Dutch Indies Mining Act, also known as the Indische Mijnwet. The desire to expand their business interests into the Dutch Indies, and the Dutch’s attempts to restrict an influx of foreign capital into the Dutch Indies seem to indicate a conflict between American liberalism or free market, and Dutch protectionism. The United States conducted intense efforts through the State Department and American Consuls in The Hague and Batavia to persuade the Dutch government to provide equal opportunities for American oil companies who wanted to undertake oil exploration in the Dutch Indies. However, the political and economic independence of the Dutch from Washington made the United States’ diplomatic efforts difficult, and largely unsuccessful. The internal situation of the Dutch colonial government in the Dutch Indies, especially with the change in Governor-General in 1926,and the Dutch colonial government’s financial difficulties and lack of capital to fully exploit all the oil sources in the Dutch Indies, were the primary factors that eventually led the Dutch government to grant oil concessions to Standard Oil, via NKPM, one of their subsidiaries that operated in the Dutch Indies.