A harbinger of things to come…Communist influence in Venezuela is reportedly growing and control of its critical oil industry is likely high on the list. (In another 40 years it will all culminate in Hugo calling the shots.) $ Interest in pursuing once-promising oil zones in northeastern Montana begins to fade. (Too bad that a time-traveling driller could not return to this era and drill one of them new-fangled horizontal wells in the Bakken.) $ Petrobras is reportedly close to obtaining much-needed long-term financial aid from ENI. (What a difference 50 years has made for the Brazilians.) $ An interesting cooperative water flood project kicks off in California…While Shell and Union independently flood adjacent leases, four injection wells are used to build a water barrier to protect against migration of oil across the lease line.
East Texas crude oil - $3.25/bbl; U.S. active rig count – 1,921
France and Italy are at it again…selling industry technology to Russia…and even Great Britain is threatening to defy the U.S. embargo against such sales. President Reagan is not a happy camper! $ How many of you knew that Amoco was once in the fertilizer and pesticide business? Well, it won’t be for much longer, as they are reportedly looking for a buyer. $ The operating company of Oklahoma State’s favorite alumnus breaks the Oklahoma production depth record with the completion of the Mesa Petroleum Tipton 2-29 well at a perforated depth of 24,928-969 ft. $ The DOE goes shopping for a contractor to operate it’s Bartlesville, Okla. Energy Technology Center.
U.S. active rig count – 2,676
Venezuela is thwarted in it’s attempt to market it’s patented boiler fuel, Orimulsion, in the state of Florida, as Florida’s Governor Chiles declares that Florida does not want to be the guinea pig for this experimental fuel that Venezuela won’t use. $ Russia’s Deputy Prime Minister Boris Nemtsov vows that Rosneft’s privatization will occur “in the presence of many journalists in an open and clear manner with no behind-the-scenes dealing.” (Did anybody check to see if he had his fingers crossed?) $ Following in the footsteps of Enron, Japan’s oil companies reveal plans to become electric power suppliers. (Might want to look for another role model.) $ Mitsubishi reports to have developed a process that uses Red Sea green algae to produce fuel ethanol by changing a starch produced from CO2 through photosynthesis into ethanol. (Don’t let the moonshiners get wind of this!)
Light sweet crude oil - $19.41/bbl; Natural gas - $2.78/MMBTU; U.S. active rig count – 993
The Rest of the Yarn
This month we resume a series of articles profiling international public figures that have significantly impacted the petroleum industry in the 20th and 21st centuries.
In the early 1900’s the British Royal Navy was fueled by coal. John Fisher, First Sea Lord of the British Royal Navy, tried to get the fleet converted over from coal to oil, but most of the British admirals felt more secure using their own Welsh coal.
Enter a 35-year old Conservative turned Liberal Party parliamentarian named Winston Churchill, who in 1910 had risen to the position of Home Secretary. He too believed that the Navy should convert both new and old vessels to oil fueled.
By July 1911, Churchill became convinced that the growth of the German fleet represented a threat to Britain and that Germany did intend to make war. He thus became very concerned about the capacity of the Royal Navy. By the end of September that year, he had been appointed First Lord of the Admiralty, the top civilian post in the Royal Navy.
The Navy was building 56 destroyers and 74 submarines that could run on oil, but the backbone of the fleet, the battleships, still burned coal. A study commissioned by Churchill reported that oil-powered ships could travel at 25 knots, faster than coal-powered ones. Oil would allow higher speeds, greater rapidity in getting up to speed, and, it would open up extra space on board, allowing room to store more gun powder. Thus, the battleships built in 1912-14 were all fueled by oil.
Churchill appointed Admiral Fisher head of a commission to study the question of finding adequate and secure oil supplies. The commission found overwhelming advantages in favor of oil fuel over coal, and it maintained that sufficient supplies existed throughout the world. The decisions that were being made here would have ramifications in the political world and in the petroleum industry for years to come.
Next month, we examine the relationships that developed between the British Admiralty and their principal oil suppliers, Royal Dutch Shell and Anglo-Persian Oil.
Shortly before the 94th birthday of this oil industry titan and philanthropist, his son wrote the following about his father: “…In all these years of effort and striving, your own life and example have been to me the most powerful and stimulating influence. What you have done for humanity and business on a vast scale has impressed me profoundly. To have been a silent partner with you in carrying out these great constructive purposes and benefactions has been the supreme delight of my life.”
Name this oil industry titan and philanthropist.
If you would like to participate in this month’s quiz, e-mail your answer to email@example.com by noon, September 15. The winner, who will be chosen randomly from all correct answers, will receive a $50 gift certificate to a nice restaurant.
Answer to May’s Quiz
The Canadians claim that the true father of the oil industry, circa 1858 (one year prior to Colonel Drake), was James Miller Williams whose strike was at Oil Springs, Ontario.
Answer to April’s Quiz
The discovery well drilled in 1905 near the small village of Tulsa, Indian Territory that spawned a state, several major oil companies, and made Tulsa the oil capital of the world was the No. 1 Ida E. Glenn.
Congratulations to April’s winner – Victor Blanco with Valence Operating