The Squeeze: Oil, Money and Greed in the 21st Century. Tom Bower

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СКАЧАТЬ one third of Mars’s income. In May 1991, Shell struck oil. ‘Getting Mars was a bonanza in 1988,’ said Bob Horton, BP’s chief in America. ‘Mars saved BP from bankruptcy.’ Dean Malouta, Shell’s skilled Greek-Italian inventor of sub-sea technology, would bitterly agree: ‘We are crazy to give BP a lifebelt. They brought nothing to the table except money.’

      Shell’s discovery, and the introduction of new engineering techniques, washed aside a whole lexicon of uncertainties and prejudices which had gripped the Gulf’s explorers. Not only had Shell’s engineers drilled deeper than anticipated, but the gush of oil was far greater than anyone had expected. Even before the rig for Mars was built and towed from Italy, Shell had broken another world record. In 1993, using a rig tied to the sea bed by barn-sized anchors in 2,860 feet of water, the company’s geologists had found a giant reservoir called Auger 5,000 feet below the sea bed, while in 1995 at the nearby Mensa field, abandoned in 1988 as technically too difficult, Shell’s new technology and about $290 million enabled oil and gas to be extracted from 5,400 feet.

      Finding those big reservoirs of oil had been coups for the geologists. In their Houston office, John Bookout’s team had plotted and recreated an area of the Gulf called the Mississippi Basin. Located just beyond the mouth of the Mississippi river, they traced where the river’s sand had been deposited 25 million years earlier, and deduced the sites of potential oil reservoirs. Their findings were confirmed in 1995. Predictions that production at Mars would peak at 3,500 barrels a day were far outstripped as it hit 13,500 barrels a day, with the promise of 30,000 in the future. Dean Malouta was an equal architect of that success. At Auger’s wellhead, 5,412 feet below the sea’s surface, Shell installed a production system and pipeline to bring the oil onshore. The production rig was held in position by six thrusters on its hull, linked by computers to acoustic beacons on the ocean floor which transmitted signals to hydrophones on the rig. Shell’s triple success reinforced the entrenched despondency in BP’s offices across town.

      Ever since David Rainey arrived in Houston in 1991, the gloom in BP’s headquarters had been seared on his mind. After three years’ work, BP had hit yet another dry well. ‘Sycamore’ in the Gulf’s KC Canyon had wasted $20 million. Jack Golden had taken the failure personally. ‘Every time we hit dry hole,’ the wizened American explorer told Rainey, ‘we look back and see that we didn’t have to do this.’ In the race for survival, Golden was as conscious as others that the oil majors’ share of the world’s reserves had fallen to 16 per cent, and the national oil companies, driven by politics rather than economics, were less inclined to give them access to their oilfields. Five years later, BP’s continuing depressing record imperilled the company’s existence. At least BP could rely on its share of the profits from Shell’s success at Mars – where two more reservoirs would be found at deeper levels, promising to deliver 150,000 barrels a day – and learn lessons from Shell’s success, replicated in ‘Bongo 1’, 14,700 feet below the sea off Nigeria’s coast. ‘We’re taking two years off and focusing on learning,’ Golden declared.

      In 1996, Shell’s success turned sour. The company struck a succession of dry holes in the Gulf, as did their rivals at BP, Texaco and Amoco. After the seventh dry well, everyone stopped. Exxon’s explorers congratulated themselves for their refusal to risk millions of dollars just as oil prices were falling, and for waiting until others had neutralised the hazards. The failures coincided with the US government’s announcement of a second auction of leases for deep-water exploration in the Gulf. Shell’s breakthrough should have triggered a boom to buy new leases, but the rash of dry wells caused head-scratching across Houston.

      The explorers gradually realised that a mile-thick layer of salt beneath the sea bed, below the silt that had poured out of the Mississippi river and above the oil-bearing rocks, was causing scientific mayhem. Finding oil relies on plotting formations of rock created up to 60 million years ago. Based on a century’s experience, geologists know which rocks are likely to contain oil. Their knowledge guarantees some predictability in the Middle Eastern deserts, the Siberian tundra and the North Sea. In those areas, the question was not whether oil would be found, but whether the quantity was sufficient to make its exploitation commercially viable.

      Identifying rock formations 70,000 feet below the Gulf’s surface was technically feasible. Ships dragging seismic equipment were regularly criss-crossing the Gulf, firing sound bops to the sea bed and, every millisecond, recording the pattern of echoes zooming back from below. Old-timers recalled watching pallets of magnetic tape of seismic data being unloaded by forklift trucks: processing them through nine-track computers took three months. Twenty years later, all that information could be stored on an iPod and analysed by computer within two hours. But either way, the results in the Gulf were notoriously inaccurate. As the seismic soundwaves passed through the salt, the ricocheting bops from the rock strata were grossly warped. ‘Recording the sound through salt,’ Rainey realised, ‘is like photographing through frosted glass. The image and the sound is distorted.’ Identifying the location of oil through salt was impossible. Shell’s early successes had been due to nothing more than luck. ‘Don’t worry,’ David Jenkins, BP’s head of technology, assured John Browne. ‘You’ll find more Mars-like oilfields once we can see through the salt.’

      Texaco and Amoco had developed computer programmes to show two-dimensional images of rocks, slightly reducing the risk of dry holes. During the 1990s the experts predicted that 3D, and even 4D, images would further reduce the risk but only drilling produced conclusive evidence. On the grapevine, BP’s executives heard Shell’s boasts about its success with Chevron at the Perdito field in the Gulf, which it claimed was the result of superior seismic processing. ‘It’s a strong indicator of our success,’ said Dean Malouta. Rainey was dismissive about Shell’s reliance on seismic evidence rather than ‘human experts’. In wild frontier areas, Rainey believed in geology. He could cure the salt problem, but the cost would be $100 million. BP could not commission any trials unless a rival corporation agreed to share the expenditure.

      At the time, BP was a junior partner with Exxon in unsuccessfully exploring a block in the Gulf called Mickey. Faced with poor seismic images, Rainey tried to persuade BP’s richer associate to finance more expensive tests. The latest computers producing three-dimensional images of the rocks were being fed seismic data recorded by ships travelling half a mile apart. BP had financed the development of software using seismic echoes recorded from cables just 12 metres apart, considerably improving the 3D image. But gathering raw data across a 300-square-mile block would be hugely expensive. ‘We need to go back from geophysics to geology,’ Rainey explained to Exxon’s geologists. ‘We need to put everything back in its proper place.’ Renowned for their technical excellence, Exxon’s executives are also infamous for believing that anything not invented by Exxon is certainly wrong. Ideas offered by an enfeebled, recently denationalised British operator were thus automatically suspect. Unlike BP, Exxon had focused on finding oil in West Africa, especially Angola, and with its enormous spread of interests the corporation lacked the financial imperative to find oil in the Gulf of Mexico. However, Exxon’s technicians were eventually convinced to finance the experiment, and Rainey’s idea was proven to be correct. Other oil companies were spurred to adopt the enhanced seismic measurements, reducing the cost for BP.

      By itself, the intense mapping of rocks was worthless. Identifying the location of oil depended upon producing accurate geological maps. The oil companies raced to recruit mathematicians and geophysicists to compose computer programmes based on algorithms to rectify the seismic data. Rainey’s challenge was to recruit better mathematicians than his rivals, especially Amoco, the masters in this field. The breakthrough coincided with BP leasing a nine-square-mile block called Mississippi Canyon 778 off Louisiana, recently abandoned by Conoco after a succession of dry wells.

      The opportunity to buy the block arose after Conoco had failed to find oil at Milne Point in Alaska. As oil prices slid, the company needed to cut its losses, and BP agreed to trade Milne Point for acreage in the Gulf of Mexico. Nonchalantly, the BP negotiator said, ‘There’s a value gap in the deal. We’ll agree if you throw in Block 778.’ Conoco’s negotiator was happy to СКАЧАТЬ