This July will mark the 28th anniversary of the 1983 discovery of the giant Caño Limón field (1.1 Billion BO reserves) in Colombia’s Llanos Basin by Oxy Colombia, a subsidiary of Occidental Petroleum.
This was the largest oil discovery of the 1980s in Latin America and might be considered the pinnacle of one of the most successful exploration streaks by an independent oil company the industry has witnessed, which began modestly in 1956 in California and continued with outstanding frequency and larger finds through 1992 under the leadership of Oxy’s skillful negotiator, philanthropist and autocratic leader Armand Hammer.
If leaders can influence the culture of a company, Dr. Hammer certainly influenced Oxy’s oil exploration drive with a touch of his maverick traits and ability to attract talent.
This account, however, is about Oxy’s talented people who made the Caño Limón discovery possible.
Oxy’s history of successes begins with geologists Richard Vaughn, Robert Teistworth and (past AAPG president) Bud Reid, who were responsible for Oxy’s first major find in 1961 – the Lanthrop field, discovered in acreage where Texaco and other companies had previously drilled unsuccessfully.
Discovering oil where others had failed almost became the trademark of the Oxy of the 1960s, ’70s and ’80s with its discoveries in Libya, Peru, Venezuela, the North Sea, Colombia Llanos, Ecuador Oriente, Malaysia and Philippines.
In 1980 the Llanos of Colombia was a vastly underexplored territory. However, at least four major oil companies had carried reconnaissance exploration in the Caño Limón area in years prior to Occidental. In fact, one of them had made a discovery in the deeper part of the basin, some way down dip from the eventual Caño Limón discovery, proving that oil had been generated in the northern Llanos Basin.
Ironically, this same company, against the geological wisdom of searching for oil up dip, rejected the Caño Limón prospect farm in offer from Oxy. As Oxy’s charismatic Latin America exploration leader of the ’80s John Carver would have said, “UP DIP, UP DIP is where the oil is!”
While the Caño Limón discovery was, as stated by James B. Taylor and Chuck McCollough , the result of the “favorable combination of exploration methodology, contractual and operational flexibility, financial and technical commitment, perseverance and an exploration approach unconstrained by past experience and models.” It also was the result of Oxy’s self-motivated, talented people who made up the exploration teams in home office and in Colombia and of their passionate dedication to the company goals inspired by the vision and professional skills of Oxy leaders of the time, inlcuding:
Had Hollenbaugh, with his endless enthusiasm and optimism, not convinced home office management to maintain a small office in Bogotá after the failed exploration campaign of Oxy in the Middle Magdalena Basin in the late ’70s, and searched for new acreage opportunities in the Llanos as a country manager, perhaps Oxy would have left Colombia and Caño Limón would have been another company’s discovery – and had he not “negotiated” with contractors to accept IOU’s until the discovery well AFE was approved, the Caño Limón discovery would have to wait or not be Oxy’s.
Chuck McCollough , as country exploration manager, and Don Conner, home office regional stratigrapher, led the initial geological Llanos evaluation that identified the preferred exploration areas in the Llanos Basin and resulted in the recommendation for the12 MM acre position Oxy acquired in five blocks in 1980. I still can remember the nervous laughter of managers John Carver and Jim Taylor when such a huge acreage recommendation was presented at a technical meeting at Oxy’s Bakersfield home office.
On the other hand, such vast acreage was a geologist’s dream “play ground” for Oxy home office geologists, Malcolm Allan, Victor Gabela and Earl Padfield, the trio, in support of the exploration effort carried out in Colombia by geologists Ismael Ramirez and Jaime Vargas – and under McCollogh’s able leadership – formulated exploration ideas based on regional concepts, existing seismic and well data, photo geology, satellite imagery, drainage patters, “creekology,” etc., to catalog identified anomalies and leads, however subtle, to test in 20 stratigraphic wells (of which 10 were completed as exploratory) that preceded the Caño Limón discovery.
Had this coordinated teamwork not existed, the discovery might not have happened when it did.
On a second exploration phase one key player was the very capable geophysicist Rodolfo Anzoleaga, who was responsible for timely mapping the incipient Caño Limón lead, which justified additional seismic acquisition when financial resources were dwindling. Rodolfo would go on to refine the structural interpretation of the discovery site’s relatively small fault controlled fold.
No less important was the contribution of non-technical personnel like Art Pereira, whose task was to organize the move of the rig via treacherous roads by the northern Venezuela-Colombia border to an island location, robbed to the Canio Agua Limón stream in a short-lived dry season, and literally drag rig components through muddy terrain unto barges to the Caño Limón location at the onset of the rainy season.
Pereira also is attributed to having suggested to McCollogh shortening the name “Caño Agua Limón” to Caño Limón in naming the discovery well.
On a humorous note, the eventual discovery was especially sweet for the original proponents, because of so much negativity by some experts – and the declaration by a well-respected petroleum research company that “the Llanos Basin does not have the potential for commercial oil.”
I believe Oxy was destined to make the Caño Limón discovery when efforts to farm out the Caño Limón prospect failed after showing it to almost 60 industry E&P companies. If opportunity is the combination of favorable circumstances, the Caño Limón discovery story embodies such definition, where a free spirit and creative company culture merged with talented people and destiny to make the oil find of a decade.
To take part in an exploration effort that results in a discovery the size of the Caño Limón and also participate in its development; live its reserve growth from an initial 60 MM BO to a 1 billion plus oil giant; witness the construction of a monumental trans-Andean pipeline and offshore loading facilities to bring the field production to export in a record time, and to work side-by-side with very dedicated, top notch professionals from Oxy’s ample pool of specialists, such as production geologists Cal Parker, George Kendall and Mike Cleveland; geophysicists Geoff Gates, Julio Perez and Neville Manderson; reservoir and operations engineers John Trahan, Ray Rivero, Guimer Dominguez and Carlos Mateus; Les Stewart, VP-engineering Leon Daniels, pipeline project manager Bernie Larsen, Derek Jones, Paul McInnes and many other brilliant people, is an experience that comes once in a career time for which I remain grateful to Oxy.
(Editor’s note: Geologist Victor H. Gabela succeeded Chuck McCollough as exploration manager Oxy Colombia after the discovery well, and became vice president of exploration and development for Oxy Colombia from 1983-89 and 1992-95.He currently is president of EL Dorado Energy SAS, Bogota, Colombia.)
Historical Highlights is a new EXPLORER series that celebrates the “eureka” moments of petroleum geology, the rise of key concepts, the discoveries that made a difference, the perseverance and ingenuity of our colleagues – and/or their luck! – through stories that emphasize the anecdotes, the good yarns and the human interest side of our E&P profession. If you have such a story – and who doesn’t? – and you’d like to share it with your fellow AAPG members, contact Hans Krause at email@example.com..