Petrobras and ‘The Most Famous Geologist in the World’

Walter Link and the beginning of exploration on Brazil’s continental shelf

During the 1950s, Walter Karl Link was considered one of the world’s best oil exploration geologists, often compared to Wallace Pratt, John E. Brantley, Everette Lee DeGolyer, Lewis MacNaughton and A. I. Levorsen. His renown aroused the interest of a newly created oil company in Brazil, called Petrobras.

Link was born in La Porte, Ind., on Oct. 26, 1902, graduated from the University of Wisconsin in 1924 with a degree in geology and gained experience over the decades with Standard Oil Co. of New Jersey, working in several places around the world, including in Latin America.

In Brazil, the state monopolization of the oil industry was authorized with the creation of Petrobras in 1953, after a long dispute between the so-called “nationalists” and “entreguistas” (a term meaning “servile” or “giving-in” – those who advocated opening the oil sector to external capital). The newly formed company decided to invest mainly in the exploration and production sectors.

One of Petrobras’ goals was to organize a Department of Exploration, based along the lines of the most successful international companies. To investigate the possibility of finding oil in great quantity in Brazil, Petrobras recruited Link in 1954, who was by then considered one of the most highly reputable petroleum geologists in the world. He was hired as chief superintendent of the Department of Exploration and charged with the responsibility of finding oil and assuring the highly-desired goal of national self-sufficiency in petroleum.

National Pariah

Despite his renown and proven reputation, to the Brazilian nationalists, the hiring of Link was an affront to the nationalist fervor of the period and antithetical to their idea of a state monopoly established for Petrobras. Link was regarded as an enemy even before he began, and the feeling intensified during his work in the company. The national newspapers highlighted his high salary and complained that he was at the beck-and-call of the international oil companies. While some Brazilian newspapers ran favorable headlines such as “North American Technician Plans the Rush of Brazilian Oil” and “Leading the works of Petrobras, the most famous geologist in the world, Walter Link,” others published disparaging headlines like, “The hiring of Walter Link and the boycott of Petrobras” and “Mr. Link receives $125,000 to prevent the discovery of oil.”

Best Exploration Team Money Could Buy

Link began his work with the intention of implementing a program never undertaken by any oil company in any country outside the United States and Canada. In the beginning of his tenure, Link reported the precarious conditions of the Brazilian oil industry, such as the lack of equipment and of highly qualified professionals, as well as the incomplete knowledge of the vast Brazilian geological basins.

Image Caption

Petrobras’ offshore and onshore production basins. Image courtesy of Petrobras

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During the 1950s, Walter Karl Link was considered one of the world’s best oil exploration geologists, often compared to Wallace Pratt, John E. Brantley, Everette Lee DeGolyer, Lewis MacNaughton and A. I. Levorsen. His renown aroused the interest of a newly created oil company in Brazil, called Petrobras.

Link was born in La Porte, Ind., on Oct. 26, 1902, graduated from the University of Wisconsin in 1924 with a degree in geology and gained experience over the decades with Standard Oil Co. of New Jersey, working in several places around the world, including in Latin America.

In Brazil, the state monopolization of the oil industry was authorized with the creation of Petrobras in 1953, after a long dispute between the so-called “nationalists” and “entreguistas” (a term meaning “servile” or “giving-in” – those who advocated opening the oil sector to external capital). The newly formed company decided to invest mainly in the exploration and production sectors.

One of Petrobras’ goals was to organize a Department of Exploration, based along the lines of the most successful international companies. To investigate the possibility of finding oil in great quantity in Brazil, Petrobras recruited Link in 1954, who was by then considered one of the most highly reputable petroleum geologists in the world. He was hired as chief superintendent of the Department of Exploration and charged with the responsibility of finding oil and assuring the highly-desired goal of national self-sufficiency in petroleum.

National Pariah

Despite his renown and proven reputation, to the Brazilian nationalists, the hiring of Link was an affront to the nationalist fervor of the period and antithetical to their idea of a state monopoly established for Petrobras. Link was regarded as an enemy even before he began, and the feeling intensified during his work in the company. The national newspapers highlighted his high salary and complained that he was at the beck-and-call of the international oil companies. While some Brazilian newspapers ran favorable headlines such as “North American Technician Plans the Rush of Brazilian Oil” and “Leading the works of Petrobras, the most famous geologist in the world, Walter Link,” others published disparaging headlines like, “The hiring of Walter Link and the boycott of Petrobras” and “Mr. Link receives $125,000 to prevent the discovery of oil.”

Best Exploration Team Money Could Buy

Link began his work with the intention of implementing a program never undertaken by any oil company in any country outside the United States and Canada. In the beginning of his tenure, Link reported the precarious conditions of the Brazilian oil industry, such as the lack of equipment and of highly qualified professionals, as well as the incomplete knowledge of the vast Brazilian geological basins.

In 1955, to solve some of these problems, Link went to the United States with the goal of hiring American professionals, mainly geologists and geophysicists. The lack of professionals was a huge problem in Brazil, so Petrobras began investing more heavily in training its own workforce.

That is how they planned and organized the Department of Exploration – to allow Link to create and lead the best exploration team money could buy. Link’s optimism and enthusiasm about the possibilities of finding oil in Brazil eventually made an impact in the press, who described him as “a true technician” and “real man of science.”

Petrobras and the Department of Exploration invested in paleontology, stratigraphy and sedimentology labs, which made huge advances in the fields of micropaleontology and palynology. Link created an ambitious program of exploration. He organized the Department based on industry norms in North America, gathered previous research and visited the Brazilian sedimentary basins. After that, he decided to invest in areas such as Bahia State (where the first oil well was discovered in 1939), the Amazonas Basin (due to its vastness and closeness to Venezuela) and the Paraná Basin (due to its geographic and economical value). Link placed a large number of geophysical teams in the field, who worked in areas still unexplored and drilled more exploratory wells than any other single company.

The Link Report

Historically, there had always been a great interest in exploring the Amazon Basin, but the difficulties with transportation due to vast rivers and wetlands, the geological problems imposed by intrusive rocks such as basalt flows and diabase, and inadequate logistical support – all of these factors challenged the attempts to map structures with seismic.

During this period, some 60 percent of the budget of the Department was invested in the Amazon Basin. Nevertheless, by the beginning of the 1960s, a sense of profound discouragement prevailed due to the numerous unsuccessful attempts.

In 1958, Link still insisted that the lack of professionals and the difficulty of recruiting qualified professionals were among the key problems of the Department of Exploration. Thus, Petrobras invested in different courses that were given by foreign and Brazilian professionals to train Petrobras’ own workforce, including degreed courses in geology.

The next year, Link attended the Fifth World Congress of Oil to present his research on “The Sedimentary Framework of Brazil.” In this paper, Link affirmed that the only commercial oil in Brazil was in the Recôncavo Basin, where a reserve of more than a billion barrels had been discovered. This work officially presented Link’s first pessimistic results for finding oil elsewhere onshore, bringing negative economic effects for Petrobras.

After six long years working at Petrobras, Link sent a detailed report to the president of the company, Idálio Sardenberg in 1960. The report was the opinion of 14 well-known geologists (six Brazilians and eight foreigners), which affirmed the lack of oil deposits in the Brazilian intracratonic sedimentary basins. The “Link Report,” as it became known, suggested that the investments of Petrobras should be directed to other areas, such as the Continental Shelf and/or in other countries.

The “Link Report” fell into the hands of the press, and it was published without permission. Brazil did not expect such negative claims, and the results of this publication were detrimental to the national economy. Link was publically condemned, being called “Public Enemy No. 1,” “Saboteur No. 1,” “A ‘puppet’ of the Standard Oil Company” and “entreguista.”

In short, the early ‘60s were turbulent for both Petrobras and Brazil. In addition to Walter Link’s words haunting oil policy and economics, there was also enormous pressure from the populace. It seemed scarcely believable that a country with such a vast territorial expanse did not have marketable oil reserves.

Unsung Hero

Link stayed in the position until Dec. 31, 1960, when he went back to the United States, seemingly a failure. However, two years after Petrobras was founded in 1953, the average production was only about 6,000 barrels of oil per day. Five years later, after the era in which Walter Link headed the Department of Exploration, the daily production had increased nearly twelve-fold, to about 71,000 BOPD.

Link put into practice the best technologies of the day for geologic research and oil exploration in Brazil. This created a lasting impact on the organization of, and work produced by, the Exploration Department of Petrobras. Several articles and books mention only the negative aspects caused by the “Link Report” and forget Link’s innumerous contributions to the development of the oil discoveries in Brazil. He consolidated a national oil industry in the country and turned Petrobras into a model of exploration for other companies.

Link also suggested a focus on exploration of the Continental Shelf, which has proven to be prophetic. He left a legacy of vitally important work on the organization of the exploratory efforts of Petrobras. His recommendations were critical to the consolidation of the oil industry in Brazil.

On March 2, 1962, in a letter to Frederico Waldemar Lange, who had taken Link’s position the year before, Link mentioned his disappointment with the steps backward within the company. He questioned if the intensity of efforts, amount of money invested, quantity of technical training and developed expertise had all been for nothing. The newspapers carried innumerous attacks on his work at Petrobras, such as ,“The territory was not researched seriously,” “It invested in the wrong equipment” and even “This is a divine punishment.”

Link gave an interview to the newspaper Última Hora (Rio de Janeiro, May 20, 1961), in which he said that, “Oil is not Brazil’s biggest problem, it is politics.” Unfortunately, this statement remained true during the decades that followed, and it is especially true today, even with the discovery of world-class oil reserves on the Continental Shelf.

Offshore success has revolutionized Brazil’s energy economy. The National Petroleum, Natural Gas and Biofuel Agency in 2017 estimated that of the total national oil production, 47.3 percent came from post-salt fields offshore, 47.4 percent from the offshore pre-salt fields and only 5.3 percent from fields located in continental basins.

Comments (1)

An object lesson in the importance of investing in people
Truly an important lesson in the importance of investing in people. I still remember from my days as a graduate student in the 70's the very intelligent and dedicated Brazilian fellow students and post-docs at my university. Later in the 80's, as a young geophysicist charged with evaluating part of the Brazilian offshore, I visited the library of the University of Texas and found volume after volume of high quality doctoral dissertations written by Brazilians who had studied there, perhaps as a result of the programs Mr. Link instituted decades earlier. I may have had the largest xerox bill in the history of the company from that visit! Perhaps the most interesting and ironic aspect of this article lies in the biography of Dra. Peyerl which mentions an organization called the Petroleum History Institute. Once, after a particularly frustrating failure that could have been avoided had we known of my company's prior experiences in the same endeavor, I suggested to my boss that we needed a Company Historian. Her world-wise and perhaps world-weary response was: "God no, the LAST thing we need is a company historian, how could management ever cover up its failures!" Let's hope there are few more like Mr. Link and Dra. Peyerl floating around in the human race to save the rest of us.
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8/28/2019 1:14:59 PM

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