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Oil Co. of Libya (National Oil) to drill oil wells in
Libya. However, National Oil was unable to secure drilling
rights. In 1966, petitioner dissolved Cracca Libya and
formed a new subsidiary called CRA International to
cooperate with other oil companies in exploring for crude
oil and natural gas in Canada.
By 1969, petitioner owned domestic oil producing
properties in Kansas, Oklahoma, Texas, Louisiana, and
Wyoming. These properties produced for petitioner a
combined average of approximately 14,000 barrels of crude
oil and 33.5 million cubic feet of natural gas per day.
Petitioner was contractually obligated to sell some of this
production to unrelated third parties. Petitioner used the
remainder to supply its refineries or to exchange with
other companies for crude oil more readily accessible by
its refineries. Such exchange transactions are common
among oil companies.
Petitioner was not able during the 1960's to achieve
its goal of producing 50 percent of the crude oil processed
in its refineries. The capacity of petitioner’s refineries
grew faster than its reserves of crude oil. In the late
1960's, petitioner’s treasurer, Mr. Donald Ewing, met with
an investment banker to determine how much money petitioner
would have to invest in crude oil production to achieve its
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