Before the discovery of oil in Mexico, the Low Countries—whose imperial interests included South Africa, Japan, Indonesia, the Caribbean Islands, and northern South America—had surprisingly litde activity in Mexico. Mexican mineral wealth was not located near the sea and Mexico did not have a strongly developed export economy of coastal crops. Thus before the twentieth century Dutch maritime expertise never became a significant factor in helping the Low Countries add Mexico to their empire, nor was Mexico targeted for major Dutch investment. During this same period relations between the Low Countries and Mexico were scant, although on a ceremonial level they were occasionally successful.
The discovery of oil changed all this and two oil firms quickly came to dominate relations between Holland and Mexico. The first was the predominantly Dutch Royal Dutch/Shell, with 60% Dutch capital and 40% British. Management of this company was also dominated by the Dutch. In 1912, Royal Dutch/Shell established La Corona, an affiliate for its Mexican operations, which were limited to a minor role in the Mexican oil industry until 1919, when Royal Dutch/Shell obtained a minority share and managerial control of El Aguila, then the second most important oil firm in Mexico.
Although various parties considered sending a Dutch ship to Mexico during the Mexican Revolution, Dutch interests were instead placed under the protection of the U.S. Navy, in line with the Monroe Doctrine. In 1916, the Mexican secretary of foreign relations instructed the military commander in Tamaulipas to offer guarantees for La Corona’s properties. At the same time Carranza seemed to favor the reimposition of an earlier mining code similar to one that the Dutch had established in Indonesia. The Dutch believed that their existing rights would not be harmed by the proposed legislation and did not oppose Carranza. Subsequently, La Corona was able to continue its oil operations by agreeing to abide by new (although at the time still not promulgated) mining laws. Then, under Mexican pressure, La Corona was established as a Mexican affiliate. It originally existed in the shade of larger companies, a situation that could be expected to change as a result of Royal Dutch/Shell’s acquisition of El Aguila.
Despite these investments, political turbulence in Mexico led foreign oil companies to seek other sources of oil and locations for refineries in the Caribbean. Dutch investment shifted to Curaçao and Venezuela. Although Latin American absorption of Dutch exports rose from 1.75% in 1921 to 5.25% in 1939, in Mexico the figures rose from only 0.07% to 0.17%. Around 10% of Dutch imports came from Latin America; the share coming from Mexico fell from 0.65% in 1921 to 0.29% in 1939. Moreover, imports of oil and derivatives fell from 14.4 million florins (U.S. $4.88 million) in 1921 to 0.5 million in 1939 ($US 0.1 million), and Mexico’s share fell from 98.9% to 10.8%. The precipitous decline of oil imports as a share of total trade reflects the fall of world oil prices. Dutch oil imports reached a low point in 1936, but despite the boycott by the oil companies of purchases of Mexican oil, imports increased over the next few years, although at lower prices. In 1947 and 1948, a decade after Mexico nationalized the oil companies in 1938, accords were reached; indemnity would be paid over a 15-year period starting in September 1948.
Van Vuurde concludes that “even though the Dutch government was disposed, up to a certain point, to defend the interests of Royal Dutch/Shell, this never caused a crisis in the relations between the two countries” (p. 133). Moreover, the Dutch government mainly stayed out of disputes between oil companies and the Mexican government. “On the contrary, bilateral relations were notably cordial” (p. 136). The 1947 accord paved the way to even better relations, culminating in 1954 in the elevation of the Dutch legation to an embassy, which encompassed multiple interests.
Rob van Vuurde’s use of new sources has led to a book that is a useful contribution to the history of oil diplomacy.