The Annexation of Austria as an opportunity for DEA

In Austria, oil exploration was left to private investors after the First World War. In order to boost their activities, the Austrian government enacted an exploration permit (Freischurf) allocation law in 1921 and modified the Mining Act in 1922 by excluding oil and gas from land ownership. A “Freischurf” covered a circular area with a radius of 425 metres, the centre of which was the location of the mining mark. The owner had to pay an annual levy to the mining authority and was obliged to drill at least one well in this area. If the well was successful, the owner could apply for a mining concession. In this case, a provisional right became actual ownership. 

In the summer of 1934, a larger oil field was developed for the first time in the Vienna Basin. This success aroused the interest of foreign oil companies, whose subsidiaries subsequently acquired the majority of the exploration permits. Germans interested in speculations also attempted to obtain exploration permits and were supported in their efforts by the Reich authorities. DEA, or rather its subsidiary Deutsche Petroleum AG (DPAG), was not interested in oil prospecting in Austria at that time.   

DEA reluctantly engaged in prospecting in Austria

Immediately after the annexation, the so-called “Anschluss”, of Austria by the German Reich in March 1938, the Reich Ministry of Economics urged DEA to take over exploration permits that had previously been acquired by the dubious Berlin businessman Karl Eugen Schmid. The DEA management agreed rather reluctantly, but soon recognised the opportunities that presented themselves, mainly due to the enactment of the Bitumen Act on 31 August 1938. 

When the act came into force, it stipulated that existing mining rights should expire in July 1940 at the latest. The deadline pressure left the companies with only two options: they either increased their development activities or sold their mining rights. The National Socialist state sought the latter. The Bitumen Act was aimed at expropriating foreign companies. The main beneficiaries were the German oil companies, while Austrian drilling pioneers mostly lost out. 

DEA concluded oppressive contracts with van Sickle

DEA benefited from the preliminary work of the English deep drilling pioneer Richard Keith van Sickle and concluded an oppressive contract with his company in February 1939. Van Sickle’s company received a loan, but in return had to pledge all its exploration permits and operating facilities and sell the entire oil production to DEA at 15 per cent below the respective market price. DEA made a profit of around 11 million Reichsmarks from the loan agreement. After several wells were drilled in the area previously owned by van Sickle, DEA became the most important oil producer in Austria.  

The Group consolidated its position in the summer of 1939 by acquiring the “Nova” refinery in Vienna-Schwechat from French owners. DEA thus not only acquired the most modern refinery in Austria but was also able from then on to start processing the crude oil on site.  

Dubious activities in Austria ensure upturn in the oil sector

The acquisitions in Austria were decisive for the merger of DPAG, “Nova” and DEA in the spring of 1940 and for the fact that the crude oil sector, after lagging far behind the coal companies for two decades, now shifted back to being at the heart of DEA’s business policy. The renewed focus on oil was therefore a consequence of the war economy.  

At the start of 1942, the Reich Ministry of Economics initiated the foundation of Niederdonau Erdöl GmbH, in which the Gewerkschaft Elwerath, Wintershall, Preussag, Donauchemie AG and Ammoniakwerke Merseburg (a wholly-owned subsidiary of I.G. Farben) were involved. DEA wanted to maintain its newly won top spot in the “Ostmark” and tried to also secure it within Niederdonau Erdöl GmbH through a dubious demarcation of exploration permit areas. That led to tensions between the owners until the end of the war.  

The most important player in DEA’s expansionist business policy until autumn 1942 was director Karl Große. As head of DEA’s crude oil operations and head of the crude oil division, he was responsible for the Group’s activities in the “Ostmark” right from the start. He had greater influence than the directors of the other German oil companies. Große was down to earth and combative. 

Use of forced labourers at the Ebensee refinery

In August 1944, DEA was commissioned by the Reich Ministry of Economics to operate “Dachs II” in Ebensee. The project involved the construction of an underground refinery. The horrific conditions under which thousands of concentration camp prisoners built the underground tunnels must have been visible every day to all DEA employees there.  

The refinery went into operation on 6 February 1945. By the end of the war, only around 15,400 tonnes of crude oil could be processed. In February 1946, the German management staff of DEA in Ebensee was replaced by an Austrian trustee. The DEA managers returned to Germany. In both western Germany and Austria, the refinery experts were able to continue their professional careers without interruption, either with their old employer or at other companies. Dr Fritz Staiger, previously Director of the “Nova” refinery and Director of the Ebensee refinery, took over the management of the DEA refinery in Heide and was a DEA board member from 1955 to 1964.