Colonel Qadhafi issues severe tongue-lashing to Soviets for failing to provide technical aid following Libya’s nationalization of BP’s oil concession. $$ Libyan Premier Jallud’s request for such aid has fallen on deaf ears. $$ Crude oil imports hit a record volume of 2,541,000 bbl/d. $$ U.S. active rig count – 1,055
Oklahoma Senator Don Nickles (No, not Don Rickles) presses for a $0.30/bbl tax on imported crude oil in order to finance an additional 2 million bbl/yr for the Strategic Petroleum Reserve. $$ Conoco begins construction of the world’s first tension leg well platform, to be set on Green Canyon Block 184 offshore Louisiana. $$ Baker International rejects a merger proposal Hughes Tool Company claims would avoid Justice Department consent decree provisions. $$ Nymex President Rosemary McFadden predicts that natural gas futures will begin trading by the fourth quarter.
U.S. active rig count – 801
Shell E&P shuts in production from the Gulf of Mexico Brutus tension leg platform (2,985 ft water depth) for repairs and production capacity expansion. Upon completion of the work, its production capacity will expand from 60,000 b/d of oil to 130,000 b/d. $$ Marathon proposes the construction of a regasification complex to be built in Tijuana, Mexico that will take LNG from Indonesia’s Pertamina, regasify it, and export it for use in southern California. (A local shale gas reservoir sure would make things simpler in LA-LA land.) $$ Who had the most winning bids in the latest central Gulf of Mexico offshore lease sale? Chevron? BP? BHP? Would you believe…Spinnaker Exploration and Magnum Hunter Production?
Light sweet crude oil - $24.37/bbl; Natural gas - $2.98/MMbtu; U.S. active rig count – 753
The Rest of the Yarn
This month we continue our look-back at the life and times of Clint Murchison, one of the “Big Four” oilmen who laid the foundations of a flamboyant lifestyle that would come to define the image of Texas Oil.
Once his natural gas franchises were secured, the challenge became building a pipeline 150 miles across the Continental Divide to link Santa Fe and Albuquerque with the gas wells in the mountains. It was an engineering effort that would have daunted lesser men. Murchison surveyed the route from an airplane, dropping flag-tipped bags of flour to mark the route he wanted. Roads needed to be laid across canyons and mountainsides, then huge sections of pipe trucked in and buried, often in rain and snowstorms. The pipe alone cost three million dollars, all of which Murchison got on credit. He had hoped his brother Frank could raise money to repay the loans in Chicago, but their brokerage firm, Peabody & Co., ran into management problems, and Frank was forced to step in and actually run Peabody himself. Still, Murchison was confident that once the pipeline was complete, gas sales would allow him to repay the banks and his main trade creditor, the Oilfield Supply Company.
Construction had just begun in the fall of 1929 when the stock market crashed. In a matter of weeks America sank into a national depression. Murchison watched in dismay as his cash flow sputtered, coughed, and then finally stopped altogether. He couldn’t pay his workers, endangering the entire pipeline project. One week he made payroll only by borrowing forty thousand dollars from one of his father’s friends. When the pipeline reached a point seven miles outside Albuquerque, they ran out of money once more. Only when Wofford Cain appealed to the mayor to return a portion of their cash bond was the pipeline finally completed.
All through the worst months of the Depression during 1930 and 1931 Murchison signed up new customers for Southern Union, and barely two years after its founding, he could boast of service to forty-three towns in six states—this despite the weekly struggle to meet payroll. What saved him was the fact that he knew more about banking than any other oilman in Texas. He coaxed every last dollar he could out of the Dallas banks, then pushed back repayment, all but daring the bankers to foreclose. By 1932 his debt had grown to more than four million dollars, far more than his net worth. “Aren’t you concerned about owing all this money you can’t repay?” Ernest Closuit asked him. “No,” Murchison said with a smile. “If you’re gonna owe money, owe more than you can pay, then the people can’t afford to foreclose.”
Next month, A look at how Sid Richardson fared during the Depression years. (Article excerpted from “The Big Rich.”)
In what state was the world’s first horizontal oil well drilled? If you would like to participate in this month’s quiz, e-mail your answer to email@example.com by noon March 15. The winner, who will be chosen randomly from all correct answers, will receive a $50 gift card to a nice restaurant.
Answer to February’s Quiz
In 1959, Texaco overtook Standard Oil of New Jersey as the nation’s largest crudeproducer. Answer to January’s Quiz In 1962 the world’s deepest LPG storage involved Dakota Salt and Chemical’s salt-layer storage operations which were conducted through a trio of wells at 8,400 to 8,500 ft near Williston in Williams County, North Dakota (surrounded by all that Bakken oil!).
Congratulations to January’s winner – Fred Growcock with Occidental Oil & Gas