Meaner Than a Junkyard Dog
Oilman Oscar Wyatt reveals how his world really works—from freeing the hostages in Iraq to doing deals with China and keeping up with his jet-set marriage.
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I asked Wyatt what motivates him, and he wasted no time in idle introspection. “Fear of failure,” he stated flatly. “Failure is the only thing I’m terrified of.” Others say that it’s not exactly fear of failure that drives him but fear of scarcity. No matter how many airplanes, companies, houses, or wives he acquires, Wyatt always seems to be battling his way out of his internal poorhouse. One of his best friends put it this way: “In his life, he’s been really poor and really rich. He’s scared to death of being poor again.”
His father was a utility-company trucking supervisor who had a drinking problem. When Wyatt was a young boy, his father left his mother, a somber, purposeful woman, and later the two divorced. Wyatt was on his own financially from the age of thirteen. A physician in Navasota gave young Wyatt a job as his driver and assistant. To this day, Wyatt is a frustrated doctor. Those close to him keep their various illnesses a secret for fear that Wyatt will either diagnose them himself or telephone his good friend Houston doctor Michael DeBakey and recommend them for a heart bypass operation.
On December 7, 1941, Wyatt was studying for a trigonometry exam when two of his friends told him that the Japanese had bombed Pearl Harbor. “I just felt this jolt of electricity inside myself,” recalled Wyatt. “My country had been attacked, and I wanted to get up in an airplane and do some damage.” He had gotten his pilot’s license at age sixteen, when he worked as a crop duster for cotton farmers. So when the war began, he joined the Army Air Corps. In 1945, while delivering supplies to an air base in the Pacific, Wyatt’s plane crashed. Both of his legs were crushed, his jaw was broken, and he had seven fractures to his head.
“When we first got married,” Lynn Wyatt said, “every bad dream Oscar had was about the war. He would relive the crash night after night and wake up in a sweat.” Part of the reason Wyatt was taking the war in the Persian Gulf to heart, Lynn theorized, was that he was still preoccupied with his own World War II experience. “The night they announced on television that twelve American Marines were lost, Oscar just sat in front of the TV and grieved,” she said. “He knows this area of the world like the back of his hand, and he takes each event in the war very personally.”
After World War II, Wyatt attended classes at Lamar Junior College in Beaumont. He saved enough to lease a 640-acre rice farm near Beaumont and used the proceeds from his crop to transfer to Texas A&M, where he graduated in 1949 with a degree in mechanical engineering. Then he headed to South Texas, where he went to work as a salesman for the Reed Roller Bit Company and learned the history of every gas field in the region.
In the oil and gas business, Wyatt has always operated like Jett Rink. He mortgaged his 1949 Ford to raise $800 to form his first producing company, which he named the Hardly Able Oil Company. By 1955, he had founded Coastal States Gas Producing Company, and soon he went into the gas-pipeline business as well. Big companies such as United Gas dominated South Texas, but Wyatt, starting with 68 miles of pipe to reach fields that were too small for the big companies to worry about, eventually took away business from the big companies by paying producers higher prices.
In 1960 Wyatt formed Lo-Vaca Gas Gathering (named for two South Texas counties, Live Oak and Lavaca) as a wholly owned Coastal subsidiary that would be the intrastate supplier of natural gas to public utilities. In 1962 Lo-Vaca began supplying gas to San Antonio. By 1967 it was also supplying Austin, Corpus Christi, Laredo, and Brownsville. Wyatt was the head of a corporation with a split personality—Coastal was a high-growth gas-gathering company that became the darling of Wall Street as its stock tripled in value from 1966 to 1972, and Lo-Vaca was a small public-utility-oriented company that supplied five Texas cities with natural gas. All was going well until the energy crisis of 1973 escalated the price of natural gas. Wyatt was trapped by long-term, low-priced contracts and higher gas prices at the same time that supplies were diminishing, and soon Coastal found itself embroiled in six years of legal battles. In San Antonio, which suffered brownouts because Lo-Vaca couldn’t deliver enough gas, Wyatt became the most hated oilman in Texas.
Feuding is endemic to the politics and business of South Texas. Earlier, while building Lo-Vaca, Wyatt conducted a celebrated feud with former ally Lyndon Johnson, who, first as vice president and then as president, failed to give Wyatt the help he thought he deserved. Over the course of the past thirty years, he has befriended, feuded, sued, and countersued Clinton Manges, the South Texas rancher and anti-establishment power-broker. His best friends have been independent oilmen like John Mecom, who drilled wildcat wells all over South Texas. When Mecom was near bankruptcy in the early eighties, Wyatt was so distraught that he devised a plan to pay off all of Mecom’s debts. One night Wyatt went to Mecom’s mansion in Houston and presented his idea. “I think this will get you out of debt and give you about $2 million a year to live on,” Wyatt said. Mecom looked up at him and shook his head no. “If all I had to live on was $2 million a year,” Mecom told him, “I’d rather go broke.” Wyatt admired Mecom’s attitude. “Just think of it,” Wyatt said. “Old Man Mecom was looking at bankruptcy and still thinking like a wildcatter.”
By 1974 it was clear even to Wyatt that he couldn’t save Lo-Vaca. During a meeting with his lawyers and top company officials, Wyatt looked around the room and announced in disgust, “This thing is out of my hands. It’s up to the lawyers now.” Eventually they settled $1.6 billion worth of lawsuits with Lo-Vaca’s customers to keep Coastal from going bankrupt. Meanwhile, Wyatt shifted his emphasis away from Texas to the entire world of oil. Coastal had already made its first major out-of-state purchase when it acquired Colorado Interstate Gas in 1973. With the Arab sheiks controlling the world price of oil, Wyatt realized that securing a steady supply of oil was far more important than producing it. It was then that he began to roam the world, buying oil from foreign sources and either transporting it to his own refineries or reselling it to others. In 1976 he bought a refinery in San Francisco and, the next year, an oil company in Florida. Coastal prospered in the eighties by concentrating on refining and brokering oil, rather than on production and pipelines. He had become a trader.
Some of the countries that Wyatt chose to buy crude from, such as Libya and China, had shaky relations with the United States. In order to reduce the risk of doing business in the Middle East and elsewhere, Wyatt acquired an Austrian passport but never renounced his U.S. citizenship, as was widely rumored in international circles. “I did it for protection,” Wyatt told me. “In a raid in the Middle East the first thing they look for is a U.S. passport. I did it as a matter of survival.”
In 1979, when the U.S. established diplomatic relations with China, Coastal became the first U.S. company to import crude oil from mainland China. Wyatt dealt with the Chinese exactly as he had dealt with producers in South Texas—by educating himself in the history of their fields and establishing direct contact with the principals who had the authority to make the deal. “There was no sitting by the telephone, waiting for the officials to call you back, because there were no telephones,” Wyatt recalled. “We just stood around in offices and waited until someone got around to talking to us.” His biggest problem was not in making the deal—that was easy, since he was buying only one thousand barrels a day—but in shipping the crude out of the country. At the time, the U.S. government was still leery of encouraging commerce with China, for fear of alienating Taiwan, our ally in the region. Naturally, Wyatt had no such worries: “I didn’t give a damn what the Taiwanese thought of the deal.”
The same year that he was negotiating with the Chinese, he also purchased oil from Libya. In return for a steady supply of oil, Coastal agreed to explore in Libya, but the exploration was stopped in 1986 because of U.S. sanctions against Muammar al-Qaddafi’s government. But Coastal still has contacts, albeit distant ones, with Libya. A foreign subsidiary of Coastal’s is the holding company of another company that, along with a Libyan oil company, is a shareholder of a German refinery that refines oil supplied by the Libyan company. Wyatt insists that this transaction is legal because it’s all done through foreign subsidiaries.
Meanwhile, agencies in the U.S. government were benefiting from Wyatt’s relationship with Libya. When an American pilot was shot down in that country in 1986, Wyatt was asked by an intelligence officer to find out if the body had been recovered by Libya. Using his network of sources, Wyatt provided the U.S. government with a confidential report within 48 hours: The body was in Libyan hands. “I won’t talk about that,” Wyatt snapped when I asked him about the incident. “All I will tell you is that I am a patriot and have always been willing to use my commercial relationships around the world to benefit my country.”
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