On Aug. 3, 1966, Continental Oil Company’s Fateh-1 wildcat came in at a rate of approximately 100,000 barrels of oil per day, but with little fanfare in the oil world. Located offshore 55 miles north of the port of Dubai, the discovery was the result of a chain of events that were initiated in the early 1950s by two driven executives with different backgrounds but a shared vision of the future.
L.F. McCollum
Born on a Tennessee farm, Leonard F. McCollum studied geology at the University of Texas, then joined Humble Oil and Refining Company, an Esso (Standard Oil of New Jersey, now ExxonMobil) subsidiary as a scout. He transferred to Carter Oil Company, another Esso subsidiary, as exploration manager, and he rose rapidly through the ranks to become president of Carter at age 39. He was one of the youngest chief executives in the oil business at the time. When Dan Moran, the president of Conoco who steered the company conservatively through the Great Depression and World War II took ill, the company made a “very compelling” offer to “Mr. Mac,” as he was referred to by his admiring co-workers.
McCollum’s management style was drastically different from that of Moran. His was an open communication style with an emphasis on exploration, research and new techniques such as vibroseis, which remains the main onshore seismic exploration tool after the phasing out of dynamite. He surrounded himself with a team of innovators and vigorously embraced international exploration, pledging to make Conoco “the best damn oil finder” in the business.
Take the Big Bite
In 1948, Conoco organized Conorada, a consortium with Ohio Oil Company (now Marathon) and Amerada (later Hess, now a part of Chevron), aiming to explore in the Middle East. This effort enjoyed the assistance of Fred Penniman, an ex-State Department Middle East expert and Chris Daum, an experienced and dynamic international consultant. The exploration branch of Conorada was managed by Nestor J. (Doc) Sander a senior American geologist with a doctorate from the Sorbonne (France), who had brilliantly served in intelligence with the Allies during WWII, and Jean Pierre Jaccard, an experienced Swiss geologist. In 1953, Conorada obtained a major oil concession in the Western Desert of Egypt with Cities Service as a partner.
After drilling nine dry holes, Conoco faced its first experience with political risk. When Egypt nationalized the Suez Canal and an international conflict ensued, Conoco abandoned exploration in Egypt in 1957.
McCollum told Fortune magazine, “... you must have the audacity to ... take the big bite.” Undaunted, McCollum and Conoco’s partners pursued exploration in the Kingdom of Libya where Conorada had been granted an extensive acreage position in 1955. The first discovery was the Dahra field, whose production grew rapidly from 120,000 barrels per day to more than one million barrels per day. By 1962, Conoco had become an international player and was on its way to fulfilling McCollum’s vision of becoming the 8th Sister among the existing giant multinationals.
Albert Hrubetz
Born in 1929 in the coal town of Maryville, Ill., Al Hrubetz said he grew up during the late days of the Great Depression in a saloon. His early life included riding in railroad cars and listening to radio shows around a pot-bellied stove. After Pearl Harbor, he served in the Marines, got married and scraped his way through St. Louis University under the G.I. Bill of Rights, graduating in geological engineering.
Oil was overtaking the dominance of coal, and Hrubetz joined Continental Oil Co. in 1953 as a geophysicist, working his way through the compulsory phase of field training. He became party chief of a seismic crew and was promoted in 1963 to chief geophysicist, international. Hrubetz was based in the new Conoco headquarters at 30 Rockefeller Plaza in New York when the company’s international expansion phase was in full swing, according to McCollum’s plan.
A New Technique
The astute Conoco exploration group included some foreign professionals hired by McCollum, among them J.R. (Randy) Strong, John F. (Terry) Mason and Quentin M. (“Q”) Moore. Conoco formed Dubai Petroleum Company, a wholly-owned subsidiary that partnered with Dubai Sun Oil Co and Deutsche Erdöl. They approached British Petroleum and Compagnie Française des Pétroles to farm-in to an offshore Dubai concession in which these two firms had little exploratory interest. The exploration teams of the two European companies felt that there was little chance of oil production east of Abu Dhabi where they already had vast production holdings. Conoco was able to negotiate an attractive participating interest.
As part of Hrubetz’s responsibilities, he was entrusted by McCollum with the development of the Dubai acreage. Mr. Mac was much attuned to exploration, but his directives were very strict, based on his U.S. experience: “Do not talk to me about a prospect unless you have acquired the land rights.” Acquiring land rights is always a sensitive issue but, in 1963, it was further complicated by the fact that in the Middle East the international majors had a proprietary approach to exploration data in order (among other reasons) to limit the expansion into overseas exploration by independents such as Conoco. Contrary to the present, no specific geological, engineering, operational or financial data were released or authorized by the majors. Exploration and production data were simply “off limits” to newcomers. How do you evaluate the acreage once you have it and pertinent data acquired by other companies are unavailable?
Exceptionally, Hrubetz managed to look at the BP seismic data in London but was little encouraged by what he saw. It consisted essentially of “multiples” – a well-known phenomenon observed while acquiring seismic data over a calcareous sea bottom layer that reverberates the seismic waves back to the surface.
Through his past business experience and contacts, Hrubetz approached Booth Strange of Western Geophysical and signed a contract for a crew that was finishing an Iran offshore project. Western had developed a new technique called “common depth point” to eliminate sea bottom multiples. Both Hrubetz and Strange were excited about using this new CDP technique for exploring the Dubai concession.
Conoco’s Ponca City, Okla., geophysical research group was headed by John Crawford, with Frank Searcy following operations and Dave Godschalk serving as head of seismic processing. As often happens in large corporations, the group expressed reservations about the new technique. One of their previous research papers had concluded that Western’s CDP method was theoretically impractical.
The Shuaiba Snake
Hrubetz, however, proceeded with the logistics of operations in Dubai, setting up the Shoran station for offshore ship navigation and dutifully making several trips to Dubai during the acquisition phase. Meanwhile, the International Interpretive Group was organized in Houston. It was headed by Tony Scanlan and staffed with three senior geophysicists: Dick Wissing, Fred Howe and me, plus a younger geophysicist and quality control specialist, Jim Rooker. Quentin Moore of the New York office followed the project from a geological standpoint using both Randy Strong and Terry Mason as scouts for obtaining additional data within the industry. The field data were processed both by Western and Conoco in Ponca City (Godschalk).
Although dereverberation (processing to reduce or eliminate multiples) had been successfully accomplished, scouting information pointed out that Conoco faced a very tough technical and geological challenge. The main objective was to find the eastern extension of the so- called “elusive Shuaiba snake.” This was a reef trend extending 185 miles along the eastern portion of a Cretaceous basin in Abu Dhabi with very temperamental characteristics and no well control in or near Dubai. The type locality for the Shuaiba is the Bu Hasa oil field, discovered in 1962, with porosities of 18 to 25 percent and permeability over 100 millidarcies. It produced oil from nine reservoirs.
Fortunately, Conoco had experience with mapping reefs, and Hrubetz was favorable to re-applying some of the interpretive techniques he and I had developed earlier. Extensive wavelet analysis of the reef was done with the cooperation of the Godshalk team, focusing on stratigraphic interpretation of seismic data eleven years before it was recognized as an effective exploration tool (AAPG Memoir 26). This created, in effect, an analog to the Horseshoe Atoll reef trend of West Texas. The Atoll had been discovered in 1939, and Conoco had shot several reconnaissance lines across the reef to establish the reliability of vibroseis as a viable seismic exploration tool to replace dynamite. The interpretive process was long and tedious and required a close cooperation between geology and geophysics to reconstruct the indications of the seismic wavelet as compared to the stratigraphy to delineate the various zones of maximum porosity and permeability.
Finally, a drilling location was chosen by the technical committee and, by then, Hrubetz had been promoted to higher positions within Conoco. I was transferred for a short duration to Dhofar where Conoco had farmed-in to a John W. Mecom concession located south of the Saudi Arabian Rub Al Khali (Empty Quarter) desert, part of the Sultanate of Oman. After supervising a seismic survey and the drilling of a dry hole by Mecom, I was repatriated to Houston and subsequently transferred to London where Conoco was increasing its exploration effort in the North Sea due to encouraging developments.
Follow-up on the Fateh Discovery
The name “Fateh” – chosen by Sheikh Rashid, the ruler of Dubai – was in reference to “Al-Fatiha,” the first surah in the Quran, meaning “the Start” or “the Key” as a symbol of a new beginning for Dubai. To develop the field, Conoco transferred Lou Ripley from the Libyan operations to Dubai as general manager. Harry Vest, a senior geologist with vast experience in carbonate reservoirs, oversaw the geological development phase of Fateh. On the engineering side, Lawrence “Buck” Curtis (the vice president of engineering with Conoco, later production president) and the E&P team designed the Khazzan “inverted champagne glass” storage tank in 150 feet water depth. This was a totally new concept which saved considerable installation costs as well as pipelines and storage facilities onshore. Two additional storage tanks were installed offshore for further production storage. (Curtis went on to design the revolutionary tension leg platform used to produce the North Sea Hutton field in 1987, which earned several professional nominations for Conoco’s expertise in deep water production.)
As a result of the pioneering efforts of Conoco’s E&P team with its discovery and initial production in 1969, Dubai continued to prosper with further oil discoveries (SW Fateh 1970; Falah 1972; Rashid 1973; Al Jalilah 2010; Aqam 2018). Peak production was reached in 1991 at 410,00 barrels of oil per day. Estimated oil reserves of Dubai are 4 billion barrels. Dubai Petroleum became totally independent in 2007 and is now staffed by Dubaian workers and engineers. A separate national company called Dubai Gas, created in 1977, is entrusted with the engineering and construction of onshore and offshore gas complexes in the UAE as well as worldwide. With the inauguration of the Jebel Ali plant in 1980, it became a major producer and exporter of liquefied natural gas.
The Prize
The Dubai discovery generated little industry interest at the time, but in view of several other significant discoveries in the Emirates, the technical, operational, economic, social and human consequences can be better evaluated with the passage of time. The discovery was the result of determination, creativity and hard work on the part of the Conoco team to prove the validity of an exploration concept contrary to that of the experienced operators in the area. The Dubai discovery was a major step in Conoco’s overseas development, both for the company and its personnel.
The Conoco team worked closely with Dubaians. The concept of giving back to the host country and teaching its nationals to become trained technicians and manage their own resources was established early in the game. Sheikh Rashid, following the advice of trusted oilmen that petroleum was a finite resource subject to depletion, proceeded with the prudent management of this new discovery.
With the sustained efforts of Sheikh Rashid’s sons, Sheikh Maktoum and Sheikh Mohammed, Dubai has divested into other sources of income and ensured economic prosperity after the depletion of its oil resources. As a result of its spectacular growth and position as a major financial center, Dubai is often referred to as “the Hong Kong of the Emirates.”
To cite Sheikh Rashid’s own words: “You came to us as guests rather than conquerors, you developed our natural resources, teaching our nationals to exploit them for our own benefit and you left leaving our future in our own hands while remaining our friends.”
Acknowledgements
Many thanks for advice and guidance to Albert Hrubetz, author of “A Geophysicist’s Memoir,” published in 2016, and to Matthew Silverman.