Oklahoman Bucks the Trend : Indian Leader Buys Oil Refinery

SHAWNEE, Okla. — John Barrett has devoted recent years to working with his Potawatomi Indian tribe, but he has the oil business in his blood, too, and he couldn’t pass up an opportunity to try a new aspect of it.

Barrett, who became the highest elected officer of the Citizen Band Potawatomi Tribe in July, signed a lease-purchase agreement for a defunct oil refinery in August, 1985.

In October, the 41-year-old Barrett became one of the few American Indians to obtain a Defense Department contract--to supply 64 million gallons of military jet fuel.

First to Own a Refinery

He says he is the first Indian to own an oil refinery--a purchase that came as many oil refineries around the world have been forced to close because of hard times.

Thirteen refineries operated in Oklahoma during the height of the oil boom at the end of the 1970s and in the early 1980s, but only five large refineries continue in operation. Barrett is the first to bring back one of the refineries to fail during the bust, said Perry Brinlee, vice president of Barrett Refining Corp.

Barrett says full production should get under way in February, a month’s delay he blamed on recent price volatility in the crude oil market.

Barrett, who goes by the nickname Rocky, symbolizes two sides of Oklahoma’s past. His future, he hopes, is one that brings the two together.

He was born with oil in his blood--one fourth of which is Potawatomi. On one side of the family, he is descended from generations of oilmen who have drilled for crude during booms and busts. On the other, he is descended from Indiana Indians forced south before statehood.

And like the Boomers and Sooners of his father’s family, who staked a claim to a patch of Oklahoma land at the turn of the century and of the oil men who followed, Barrett says he is attracted to the risks of the oil business in which he began working as a roughneck at age 15. He talks fondly of risking money to drill and the physical dangers of climbing up and down an oil rig.

Barrett, who attended Princeton University, says he was reading in Chapter 11 of the U.S. Bankruptcy Code of the proceedings of Oklahoma Refining Co. one day at the Potawatomi tribal headquarters south of Shawnee when he first thought of an Indian-owned refinery.

Drilling at Low Ebb

It didn’t matter that more than 100 refineries around the country have closed in recent years and that drilling activity has been at an ebb since the early 1980s, he says. The dream was worth pursuing.

The going was not easy in the beginning, he said. A federal bankruptcy court judge overseeing the Oklahoma refining proceedings approved the $2.7-million lease-purchase agreement in August, but Barrett’s one-year contract with the Defense Department did not come through until Oct. 16.

AWACs and fighter jets will run on Barrett’s oil, which will be distributed to several Air Force installations in western Oklahoma and southern Kansas. He also plans to produce other types of fuel.

He called on his seven years’ experience in working with the tribe--two years spent as its administrator--in negotiating the details of applying for a federal contract. He is relying on a lifetime in the oil patch to run his refinery.

“I feel I’m providing a marketing opportunity for western Oklahoma producers that’s vital to them and I’m providing an alternative source of jet fuel to the government. Hopefully, I’ll be providing long-range employment opportunities to American Indians,” said Barrett, who serves as president of Barrett Refining Corp. and is a stockholder in his father’s business, Barrett Drilling Co.

He plans to purchase his crude oil primarily from independent and some major producers in a 50-mile radius of the Custer County refinery.

CoSts to Be Lower

Barrett says transportation and marketing costs will be lower for western Oklahoma producers because the refinery is near their drilling operations.

“We see ourselves as having a unique situation both from a marketing standpoint and a crude purchasing standpoint,” Barrett said.

Barrett said he bought the refinery despite the troubles that have plagued the business since the oil glut began because the price was right--$2.7 million for a refinery built in the early 1980s at a cost of about $14 million.

But there were other reasons: an opportunity to keep western Oklahoma oil producers in business and to provide Indians with jobs.

Currently, five people including Barrett are employed in his Shawnee office and 13 work at the refinery. When production gets in full gear, an additional six employees will be hired.

“We’re going to make it because it’s right,” said Brinlee.

“We may not be No. 1 in size, but we’re No. 1 in heart and No. 1 in morale,” he added.