By: Donald V. Watkins
Copyrighted and Published on August 16, 2024
A Special Report on Black Entrepreneurship
My start in the oil and gas business began in 1977 when I met Mr. Charles Wallace in Tuskegee, Alabama. Wallace, who was Black, was attempting to build a $300 million oil refinery and a new town on 2,000 acres of what was once the Old Sharpe Airbase property in Tuskegee. Wallace was also building a 214-mile oil transport pipeline from the Port of Mobile, Alabama to the refinery site in Tuskegee.
I was impressed with Charles Wallace because I had never met a Black entrepreneur who owned a retail fuel oil distribution company and was expanding his operations to include a 150,000 barrels-per-day oil refinery in Tuskegee and a oil transport pipeline. This project was a massive undertaking and it was led by a confident, cool, brave, and wealthy Black businessman in America's oil and gas industry.
Charles Wallace, who was 45 years old when we met, started a multimillion-dollar oil company in 1968 named Wallace & Wallace Chemical & Oil Corporation with a single antiquated 1949 International-brand oil truck. The company's oil sales skyrocketed from $25.9 million in 1979 to $80 million in 1980 (which is $305.4 million in today's dollars). Wallace & Wallace advanced to second place on the 1981 Black Enterprise list of 100 Black-owned businesses from tenth place in 1980.
Wallace & Wallace had a long-term crude oil supply contract with Venezuela to lift at least 10,000 barrels-per-day and a processing agreement with Mobil Oil corporation under which Mobil agreed to refine the Venezuela crude oil during the period in which the Wallace & Wallace refinery was under construction.
Wallace & Wallace was NOT a minority “front” company for Whites in the oil supply and refinery business. In fact, Charles Wallace was featured in the February 23, 1977 edition of the New York Times as a solid businessman, a sophisticated operator, and a tough competitor in the retail fuel oil business. Wallace was quoted as saying:
"I make no excuses for doing whatever I am legally allowed to do in politics and I make no excuses for getting from the Government whatever I am legally entitled to and I make no excuses for using the white man's system to get for my people whatever the white men get for theirs. . . . .The Government has been holding my people back for 200 years, now it's time for the same Government to do everything possible to help my people.”
Charles Wallace's public statements and confident attitude angered many Whites in Alabama and some powerful ones within America's oil and gas industry. They viewed Wallace as an "arrogant, uppity, Nigger."
Surprisingly, Alabama Gov. George Wallace was a staunch supporter of the oil refinery project. The Governor saw the project as an econmic boom for Macon County and the state of Alabama. The refinery would provide more than 3,500 construction jobs and more than 8,000 permanent jobs when it was completed. Charles Wallace had arranged financing for the refinery from private sources in New York and government sources in Washington.
Site preparation for the Tuskegee refinery began in late 1973. Gov. George Wallace provided various state and local economic incentives to aid in financing the project. The Governor also arranged for the state to grant the necessary rights‐of‐way for a 214‐mile pipeline from the Port of Mobile to Wallace & Wallace's proposed refinery site in Tuskegee. Finally, Gov. Wallace supported a $40 million bond issue for dock improvements at the Port of Mobile to facilitate the pipeline for the refinery project.
After Gov. Wallace left office in 1979, obstructionists in Gov. Fob James's administration joined forces with White property owners in Tuskegee from 1979 to 1983 to derail Charles Wallace’s financing for the project, via time-consuming, costly, and adverse litigation. The obstructionists were motivated by a degree of racism that Wallace & Wallace could not overcome in the legal fights that snaked their way up to the Alabama Supreme Court in 1982.
As a result of this sustained campaign of obstruction, construction of the Wallace & Wallace oil refinery project never commenced.
Blacks in Alabama’s political establishment were powerless to help Wallace & Wallace. Many of them suffered from a severe form of "Crabs in a Barrel Syndrome" and were jealous of Charles Wallace’s demonstrated success in the retail fuel oil distribution business. Others privately mocked Charles Wallace for engaging in “White folks’ business.”
"If You Can See It, You Can Be It"
I saw what Charles Wallace was doing in the oil business and believed that I could do it, too. I loved his confidence, tenacity, vision, business preparation and execution, swagger, and wealth creation strategies.
In my talks with Wallace, I learned as much as he would teach me about the oil and gas business. Wallace graciously gave me his time and the sound advice I needed to enter and succeed in the oil and gas business. Over the years, I followed Wallace’s advice with passion, focus, and confidence.
First, I saved as much money as possible from my hugely successful legal career. I did not buy a big home in an exclusive neighborhood. I did not buy luxury cars and clothes. I did not waste money on VIP parties and expensive social events. I banked all the disposable money that I could get my hands on.
In 1986, I co-founded a full-service investment bank with Nathan A Chapman in Baltimore, Maryland. We took the bank public (along with its three affiliates) on the NASDAQ several years later. This event was my introduction to the world of high-finance and market-makers.
In 1998, I entered the world of business on a full-time basis. I started by buying Pencor Orange Corp., a waste-to-fuels company in New York state, in an all-cash deal. My ownership of Pencor gave me a right of first refusal to buy the equity shares in OxyNol Solutions (formerly known as Masada Resource Group, LLC), which is Pencor's separately owned parent company.
In 2000, I co-founded and opened Alamerica Bank, a full-service commercial bank in Birmingham using the proceeds from a bank stock loan and the personal money I had saved from my law practice. My bank ownership expanded my credentials the world of high-finance and global commerce.
In 2007, I entered the world of international business with the first of forty planned $300 million OxyNol Solutions waste-to-fuel projects in global markets where the indigenous populations are peoples of color. This business strategy was a prophylactic measure that was designed to avoid, if possible, or minimize the racism Wallace experienced in the U.S. oil and gas business.
In 2011, I co-founded Nabirm Energy Service (Pty) Ltd., an oil and gas exploration company, with Olayinka Arowolo in Windhoek, Namibia. African-based GRAFFI DBA Investment Holdings (Pty) Ltd. became a Nabirm shareholder in 2014. U.S.-based Horizons, LLC (Huntsville, Alabama), became a shareholder in 2020.
Today, Nabirm is focused on the geotechnical work required to extract at least 522 million barrels of “unrisked” recoverable Brent crude oil and 583 billion cubic feet of “unrisked” methane natural gas from its assigned offshore oil block in the Walvis Bay.
Working in the energy production business outside the United States has allowed me to lessen the gravitation pull of the racism that obstructed the growth and expansion of Charles Wallace’s oil company in the 1970s and 80s.
From 2018 to 2022, White state and federal officials in Alabama tried to derail my energy businesses for the same reasons they sabotaged Charles Wallace’s oil refinery project -- they perceived me as an arrogant, uppity, Black businessman. Fortunately for me, Namibian oil and gas officials refused to become complicit in old Alabama-style racism.
Epilogue
Charles Wallace and Wallace & Wallace Chemical & Oil Corporation paved the way for my success in the international oil and gas business. What Wallace was able to accomplish in the U.S. oil and gas industry with limited capital, little to no industry support, marginal Black political support, engrained racism, and aggressive state and federal governmental obstruction was truly remarkable.
Wallace, the adopted son of sharecroppers, became the first known Black millionaire from Thomasville, Georgia. He died at age 53 on June 5, 1986.
Each day that I work on Nabirm’s oil block in Namibia, I think of Charles Wallace and what he was able to accomplish in the face of Alabama-style racism. I am thankful that Wallace freely shared his industry knowledge, business acumen, vision, and strategies for success with me.
For these reasons, I dedicate the work we are doing at Nabirm Energy Services in honor of Charles Wallace and Wallace & Wallace Chemical & Oil Corporation. "If you can see it, you can be it," truly works.
[Author’s Note: We acknowledge the photos and content made available for this article from the Jack Hadley Black History Museum in Thomasville, Georgia. The Museum was established in 1995 to educate the public about the history and culture of African Americans locally and nationally. The Museum was founded by African American historian, James “Jack” Hadley, who preserved over 4,669 pieces of African American artifacts with emphasis on Thomasville’s first Black achievers and state and national achievers to commemorate their lives and accomplishments.]
For perspective, in 1980, the average NFL player's salary was $78,657, or $300,252 in today’s dollars. In 1980, Charles Wallace made $80 million, which is $305.4 million in today's dollars. The retail oil distribution business was making Wallace fabulously wealthy. An oil refinery in Tuskegee would have taken Wallace to billionaire status in the 1980s. Except for Gov. George Wallace, Whites in Alabama were having a conniption at the mere thought of strong, independent, Black businessman with that kind of wealth and power. After Gov. Wallace left office, they did everything within their power to kill Charles Wallace's oil refinery deal.
Olayinka Arowolo, my co-founder and CEO at Nabirm Energy Services in Windhoek, Namibia, reminds me such much of Charles Wallace. Olayinka, who is pictured below, has the same brilliance, drive, focus, confidence, and commitment to excellence in the oil and gas business that I found in Charles Wallace. Olayinka makes history with our oil and gas company everyday. I am so lucky to have been exposed to the best and brightest minds in the oil and gas business, both of whom were/are strong Black men.
This great entrepreneur had a big impact on the success of my business career.
Today, the "Crabs in a Barrel Syndrome" in Alabama is worse than it was when Charles Wallace was attempting to build his refinery in Tuskegee in the 1970s and 80s.
African-Americans are the only ethic group on the planet that does NOT practice networking with each other to develop, build, and grow economic empowerment and financial security within our communities. We take great pride in enriching White merchants and other vendors of goods and services.