Syria was "off-limits"
to Western oil companies for much of the 1950s, '60s and '70s;
Russian and Romanian oil companies shared exclusive exploration rights
in Syria with the Syrian Petroleum Co., without significant success. Technical
efforts included some high quality surface structural mapping that guided
the drilling of a number of unsuccessful wildcats on surface anticlines.
Shell Oil's international
subsidiary, Pecten International, became interested in Syria in the mid
'70s. Syria had a number of old heavy oil fields, little or no light oil
production, and the exploration techniques being used by the Syrians,
Russians and Romanians appeared to be 1940s and '50s technology.
Pecten had an investment
philosophy to invest only where its technology and money were needed,
not just wanted. Syria seemed to need new technology and investments.
Pecten discovered
that much of the well cuttings and electric log data from early exploration
in Syria resided in the warehouses of Reading University in the United
Kingdom, and was available for local research. Roger Vernon of Pecten
was offered as adjunct professor to Reading University for a year, and
his research was able to provide Pecten with valuable information about
the stratigraphic section, source rocks, reservoirs and basin temperature
history.
Igor Effimoff of
Pecten led a parallel study to understand the regional structural picture
in Syria. Hans Widmer provided an integrated picture of the prospectivity
of Syria.
Political risk experts
in the '70s were nearly universal in their view that Syria was an unstable,
unreliable country that would be very hostile to American involvement
in their petroleum business. Only professor James Bill, then at the University
of Texas, offered a knowledge-based alternative opinion.
Hearing of a relaxation
of restrictions against Western oil companies, in 1977 Pecten sent a senior
executive to Damascus to make an on-site assessment of political risk
and hydrocarbon prospectivity.
Great dissatisfaction
with the Russian presence in Syria was observed. Russian staff lived within
guarded compounds and behaved as an occupying force in a less developed
country.
No anti-American
reactions were observed during several weeks of direct interaction with
Syrians in the government, in the shops and in the countryside. Pecten
was courteously received by the Syrian government, and encountered a number
of American-educated professionals in the government. Pecten also had
a number of discussions with American diplomatic and commercial officials
who offered their help in assisting Pecten's operations in Syria.
Pecten decided the
political risk was substantial, but manageable.
Difficulties
Technical assessment was difficult.
No data could be reproduced or taken out of the country. The seismic
data were stored as dusty piles of paper, indexed by memory.
Since most surface anticlines
had been drilled, technical review focused on areas of deep structure
that was non-conformable to shallow, and to areas of substantial stratigraphic
thicknesses.
Most interesting was an area
of poor quality data under the Euphrates River alluvium, where seismic
hinted at deep structural events that were not conformable to shallow
structure.
On the basis of the pencil sketches
made from memory of the seismic data, Jack Threet, Charlie Blackburn
and John Bookout of Shell Oil approved entry for Pecten into an area
in southeastern Syria, near Iraq.
A joint team from Royal Dutch/Shell
and Pecten spent several weeks negotiating a contract with the Syrian
government when -- suddenly -- the deputy petroleum minister announced:
"I'm very sorry, the Dier ez
Zor block you have been negotiating for has been awarded to another
company ... You may have any other block."
Protests went nowhere, and Pecten
reluctantly accepted a lightly explored "similar" block (Rasafa) about
30 miles west of the desired block.
Pecten was operator for Pecten/RDS,
and Roy Stoesz began a major exploration program on the Rasafa block,
with operations handled by Lloyd Daugherty, a surface geology team led
by Lee Garrett, and several seismic crews under the direction of Roger
Baker. Hisham Yazighi became Pecten Syria's first and longest serving
employee.
Tom Velleca's staff in Pecten
Houston Office designed a seismic program for the Syrian Desert.
The seismic crews had many difficulties
and equipment and data quality -- but had no problems with water wells,
fences or access.
Crew directions went something
like: "Shoot 100 kilometers due north, go west 10 kilometers, and shoot
100 kilometers due south."
Pecten and RD Shell drilled
five or six unsuccessful wells on their Rasafa block and, after spending
nearly $30 million, considered exiting their Syrian play. Pecten's wildcats
had established that structural traps, thick reservoirs and light oils
occurred on their block, but Pecten could not find where all the necessary
components of a commercial accumulation occurred together.
Pete Lucas established a "one-last-look"
basin evaluation team, headed by Bob Heacock of Pecten and Phil Lovelock
of RDShell. After concluding a complex structural, stratigraphic and
geochemical study, the originally desired Dier ez Zor block some 30
miles to the east in the valley of the Euphrates re-emerged as the best
area for commercial accumulations.
Pecten/RDShell management took
a deep breath, abandoned their efforts on the Rasafa block, and in 1982
made an offer to buy out Samoco (Coastal) and partners in their four-million-acre
Dier ez Zor block. Pecten/RDShell purchased all of Samoco's interest,
and much of Deminex's interest.
Deminex was unable to obtain
government permission to transfer their final 37 percent interest, and
became a reluctant participant in Pecten's first wildcat in the Euphrates
Graben.
The first wildcat selected by
Jim McCliman's team was on a large, faulted structure named Thayem,
adjacent to a deep graben filled with Cretaceous organic-rich rocks,
which Franz Schoenagel expected to be mature and oil-expelling in the
graben. Primary objective reservoir was the Judea Limestone, but an
important secondary objective noted in regional work was the Rutbah
sandstone of Cretaceous age.
The Thayem wildcat became the
first significant discovery from the Rutbah, and was capable of producing
over 10,000 barrels of medium gravity oil per day from a very thick
pay section. Discovery
of the 200 MMBO Thayem field provided a new petroleum province to Syria.
When news of the discovery of
oil was conveyed by Pecten staff to President Assad, he exclaimed, "My
people said we should stay with the Russians; I said we should try American
technology -- and you have proven me right!"
Under the Syrian contract, all
production operations were to be conducted by a newly created joint
operating company. Lewis Stock of Pecten undertook the very difficult
job of creating an entirely new Syrian/American operating company (Al
Furat), while simultaneously supervising desert operations to produce
and transport several hundred thousand barrels per day of recently discovered
oil.
To accelerate cash flow, the
very first wildcat produced oil into a temporary pipeline that was borrowed
from the Syrian Army and laid on the surface of the desert. Later, a
fleet of trucks transported oil directly to Syrian refineries.
Finally, on completion of field
facilities in 1984, the oil was pipelined to a Syrian port for export
and sale.
Pecten, RDS, and Deminex continued
to explore and discover about 40 other fields in Syria, with production
building to 400,000 BOPD by 1992.
In 1986, Pecten was shocked to
be informed privately by the United States government that it would
invoke sanctions against any U.S. company operating in Syria; Pecten
withdrew its American staff from Syria and transferred its interests
to its parent and partner, Royal Dutch/Shell.
A year later those U.S. sanctions
were quietly withdrawn as a result of improved relationships between
America and Syria, but Pecten was already gone.
The Pecten/Shell/Deminex staffs
were among the first Western businessmen to have large-scale involvement
in the Syrian economy, and the group established a reputation for fair
and honest business dealings with suppliers, contractors and the Syrian
government.
Lessons From Shell's Syria Success
What lessons were learned from
this exploration success?
This play taught me that political
risk analysis is not a science, hardly better than guesswork. No political
risk analyst suggested that the largest political risk facing Pecten
would be the reversal of support by the United States government in
the middle of the play.
This play reminded me that the
"best" area for finding commercial accumulations is ten times better,
perhaps a hundred times better, than nearby "similar" areas. "On Trend"
areas are a dime-a-dozen. Oil fields are always a specialized local
circumstance.
This play taught me the virtue
of persistence in pursuit of a valid exploration concept. Early tests
did not invalidate the concept; they merely refined the location of
eventual success.
This play reminded me that LUCK
is the reward for being technically knowledgeable and well prepared.