January 1959

Desoto (as in the car Desoto) engineers are reportedly working on an “idea car” that will be driven by four high-speed electric motors receiving energy from the chemical interaction of hydrogen and oxygen gasses in what is being called a “fuel cell”. $ What is now a bad word in completing the shale plays in North Texas was actually the prime target in the biggest gas structure in West Texas in the mid-twentieth century, namely, the Ellenburger in Pecos County. $ As has become a practice in other oil-poor states, the state of Oregon is offering a $50,000 bonus for the state’s first oil-producing well. $ Would you believe that the median salary for 1958 petroleum engineering graduates was $5,875, as compared with 1949 graduates whose median salary was $8,600. (Post-WWII petroleum engineers were obviously a hot commodity.)

East Texas crude oil - $3.25/bbl; U.S. active rig count – 2,005

January 1984

Twenty-five years after offering a $50,000 bonus for the state’s first oil-producing well, the state now has its twelfth new gas pool discovery in the Mist field, its only source of commercial hydrocarbon production. $ Petro-Canada reports plans to build a 50,000-70,000 b/d tar sand processing plant near Fort McMurray in Alberta. $ Partners in one of the first U.S. commercial hot water geothermal projects reportedly take out a $5 million “reservoir insurance policy” in order to obtain federal financing for the project. In the case that production minimums are not met, the insurance policy would pay back to the lender part of the loan for “resource failure”. $ Ever wonder what U.S. energy companies pay outside directors. In the early 1980’s the energy companies paid an average of $16,420/year, well above the national average for all industries of $13,300/year.

U.S. active rig count – 2,745

January 1999

Russia’s lower house, the Duma, passes legislation enabling production-sharing agreements and thereby promising to change the landscape of oil industry investments in Russia. $ While trading of emissions permits is still a contentious issue in the global warming debate, BP takes the lead by trading permits internally, as the company’s Foinaven business unit buys tradable permits from its Forties Pipeline business unit. $ Nigerian independent Famfa Oil and partner Texaco announce a major wildcat oil discovery in the deep water off Nigeria. Texaco reports that their preliminary data indicate the reservoirs contain several hundred million barrels of recoverable oil. $ Pool Energy succumbs to Nabors Industries’ takeover attempt, while additional mergers begin to take shape between Santa Fe Energy and Snyder Oil; Saba Petroleum and Horizontal Ventures; and U.K. independents Lasmo and Enterprise.

Light sweet crude oil - $12.66/bbl; Natural gas - $1.93/MMBTU; U.S. active rig count – 600

The Rest of the Yarn

Continuing with our theme of examining the lives of international figures that have significantly impacted the petroleum industry in the 20th and 21st centuries, this month we conclude our series on Hugo Chavez by examining his confrontations with the U.S.

In 2002, after the White House praised the short-lived coup in Caracas as a victory for democracy, Chavez issued a public challenge to President Bush. Waving a dollar bill in the air, he proposed to bet which of them would last longer in office. Now that Chavez has outmaneuvered or outlasted almost every one of his opponents, it is a wager he appears certain to win. He has even suggested 2030 as the year when he might consider his revolution complete – a revolution that he believes will have altered the landscape of Venezuela as well as Latin America.

In actual fact, much less has changed, for better or for worse, than Chavez’s brash declarations and larger-than-life profile would suggest. Chavez is not the bold revolutionary who has turned back the tide of history; nor is he the evil-genius dictator who has subverted democracy and the market throughout the hemisphere. Despite his many well-financed, willfully provocative diplomatic initiatives in the region and elsewhere, the actual results of his foreign policy have been paltry. Most of Latin America has accepted his money without actually embracing Chavez as a leader or a model. Within Venezuela, unemployment remains high, poverty has fallen only with rises in the price of oil (just as it has in past oil booms), and the main human-development indicators are little changed. Most remarkably, inequality and corruption have, by most measures, gotten marginally worse. From here on, with all his enemies vanquished, Chavez will have no one but himself to blame for the empty promises of his revolution.

History Quiz

What famous Houston wildcatter, who passed away in 2004, was a major player in the early years of exploratory drilling on Alaska’s Kenai Peninsula?    

If you would like to participate in this month’s quiz, e-mail your answer to contest@spe.org by noon January 15. The winner, who will be chosen randomly from all correct answers, will receive a $50 gift card to a nice restaurant.

Answer to December’s Quiz

The individual who coined the word “kerosene” and patented a process for making it from coal and who was well on his way to raking in a fortune from this process until Drake drilled an oil well was Dr. Abraham Gesner.

Answer to November’s Quiz

First discovered in outer space, I fast became essential in building vehicles to traverse outer space. I am somewhat of a nuisance to the oil industry, while much sought after for use in industry, medicine, the military, and research. And in the mid-twentieth century, the Bureau of Mines was investing more than $12 million to produce me. I am helium.

Congratulations to November’s winner – Bill Dickson with Dickson International Geosciences