from its rivals across town, Rainey was confident of success, even though the whole Mississippi Canyon area covered 5,000 square miles.
‘Everyone in the Gulf is making the same mistake,’ Rainey said in 1996. ‘The model’s wrong. We’re focusing on the geophysics.’ Rainey was convinced that his unique understanding of the Gulf would enable him to pinpoint a reservoir: ‘Shell and Chevron are fixated by seismic tests. They’re too rigid. They’re forgetting about the geology.’ While Alaska’s rocks had taken three years to master, the complications in the Gulf took 40 years to understand. ‘Everyone in the Gulf is focused on “top down”, relying only on the seismic and forgetting the rocks! It should be “bottom up”.’ Rainey insisted that BP’s rivals were looking at seismic images corrected by computers, and not at the rocks themselves. In their quest to find the rocks which 10 to 20 million years ago had heated up and generated oil, they had ignored the key factor: less dense than rock, oil attempts to escape. ‘The deeper I go, I can see the traps, but I can’t see the hydrocarbons,’ said Rainey. ‘We need to find the plumbing’ – shorthand for the ‘migration pathway’ where the oil had flowed and become trapped.
Peering at the 3D images generated by the computers in the HIVE, Rainey reminded his team: ‘The Gulf is the most complex area on the planet. You’ve got to stay humble because you can never crack the Gulf. Just as you think you have mastered it, some rocks come up and kick you in the backside. Science is helpful but in the end success depends on human understanding.’ The team debated whether the white columns spiralling out of the rocks on the screen were salt or sand. If they were sand, the oil would have leaked away and a $100 million test drill would be wasted. ‘Follow the salt,’ Rainey urged. The salt was an obstacle, but also an asset. The secret was to find a lump or hill rising within the rock: that would be the trap where the oil would gather, unable to leak out, sealed by the impenetrable salt. ‘I need people who think like a molecule of oil – where will it go into the rock?’ said Rainey. In his efforts to resolve the problem he had abolished the demarcation between geologists and geophysicists. Working together, they could determine whether the rocks had ever contained oil and whether the oil was still trapped. Like the pioneers in the space race, Rainey sought innovations, but the best he could hope for was an informed guess.
Risk is the oxygen of oil companies. Success and survival depend on tilting the risk in the company’s favour. In January 1996, Jack Golden told John Browne that BP’s explorers had understood the lessons of Sycamore and the salt. The corporation, he urged, should make the leap. His team calculated that, rather than their rivals’ estimates of 10 billion barrels of oil within the rocks below the Gulf, there were probably 40 billion barrels. In the second round of bidding for ten-year leases in the Gulf, BP should outbid Shell and Chevron. Browne agreed: the company would buy more acreage in ultra-deep water than any of its rivals.
The investment coincided with the industry’s slide towards disaster. 1998 was a dog year in the oil trade. The price of oil slumped below $10 a barrel, the lowest in 50 years. There was surplus of production, and cut-price petrol was being sold across America and western Europe. The protection enjoyed by vested interests was crumbling. Thousands of experienced engineers were fired, rigs lay unused or could be hired for 25 per cent of the old rates, and bankruptcies ravaged the industry. ‘I can’t tell you absolutely this is the bottom, but we haven’t seen anything like this,’ admitted Wayne Allen, the chairman of Phillips Petroleum. Potentially, the only profitable activity was deep-water drilling in the Gulf of Mexico, but hiring rigs to drill to a new record 7,625 feet below the sea bed and bore down to 12,000 feet cost $200,000 a day. New rigs were being designed to moor in over 10,000 feet of water and drill nearly 30,000 feet into the rock. The 3D image of Block 778 suggested there was oil somewhere four miles below the sea bed. A test bore in Block 778 would cost $100 million. The unanswered question was, where precisely to drill a 12-inch hole four miles through the rock?
At first, the debate among the 13 explorers was sterile. Red dots from lasers darted around the screen, identifying strengths and weaknesses for the drill’s path. At last the discussion became animated, and a route was chosen. The privilege of naming Block 778 was given to Cindy Yeilding, an attractive blonde geologist – an unusual sight in a male-dominated world. Having a passion for Neil Young’s music, she chose ‘Crazy Horse’, the name of his band. Protests soon arrived from the Sioux Indians, defending the memory of their chief, so the plot was renamed ‘Thunder Horse’.
On 1 January 1999, Rainey and Yeilding sat in a bland, windowless second-floor office, dramatically named the ‘Operations Room’, following the progress of a computer-guided drill gouging 29,000 feet through silt and salt towards the porous sandstone and shale where they believed oil had been trapped for eight million years. Only two rigs in the world were able to drill to such depths. Fortunately one of them, Discoverer 534, had already been hired by Amoco, which had just been bought by BP. The cost was $291,000 per day. Reservoir engineers had produced a computer programme to steer the bit around perilous flaws, after which it was hoped that oil would gush through the metal casing to the surface. Several drill bits were broken and replaced, but the geologist on the rig reported that the rocks brought up from the depths were the right age. ‘We’re at 13.6 million years,’ he told Houston, hoping that fossils 14.7 million years old, indicating the possible presence of oil reserves, would soon appear. In real time, Rainey and Yeilding scrutinised the constantly changing numbers flashing on a bank of screens for evidence of oil. One sensor attached to the drill reported whether gamma rays detected clay – a negative reading indicated oil. Another sensor measured resistance to electricity – a positive reading indicated oil and gas, because neither conducts electricity. For the next 186 days other members of the team followed the drill’s progress on their laptops, at Starbucks or in their beds at night.
‘Our sandbox has just got bigger,’ Rainey exclaimed on 4 July, as the drill’s sensors reported oil. Nine months later, the size of the reservoir was confirmed: one billion barrels of oil, the biggest ever discovery in the Gulf of Mexico. ‘The prize was beneath the salt,’ said Rainey, ordering everyone to secrecy until all the neighbouring acreage had been signed up by BP. After weeks of around-the-clock work, the explorers and their families discreetly celebrated their success with champagne and dinner.
Around Houston, BP’s triumph was greeted with mixed emotions. In normal times, the city fathers would have been thrilled. More oil would mean a boom, but at $10 a barrel, that was not going to happen. The American public, seemingly prepared to pay more for a bottle of water than for a gallon of petrol, were manifestly ungrateful for any Big Oil success. Unaware of the technological achievements involved, the oil industry was taken for granted by a generation of Americans who had grown up regarding cheap gasoline as their God-given birthright. Filling their petrol tank did not make anyone feel good. Ever since nearly 11 million gallons of oil had spilled from the tanker the Exxon Valdez into Alaska’s pristine waters in March 1989, the public’s antagonism towards Big Oil had become entrenched. Big Oil had overtaken Big Tobacco as a focus of hatred. Within the American public’s DNA was a belief that oil was a decrepit rust industry unfairly extracting tax from honest citizens. Few appreciated that Thunder Horse would fractionally reduce America’s dependence on imported oil, which provided 60 per cent of its daily consumption. ‘Guns, God and Gasoline’ may have represented freedom for many Americans, yet the oil companies, apparently ambitious for ever more power while remaining unresponsive to the public, were neither understood nor trusted.
In that hostile environment, BP’s achievement was acknowledged only by its rivals. The company’s reputation had been soaring since 2000 because of aggressive acquisitions. Exxon, Shell and Chevron anticipated their own successes, although the timing was uncertain. While the kingdoms of the major oil companies were diminishing, BP, the largest oil producer in America, was more admired than hated. David Rainey was proud to have met the architect of that success, BP’s chief executive John Browne.
As the guest of honour at a packed dinner in Houston in August 2002, Browne had been hailed as a hero. BP’s dapper chief executive, regarded as an idealist and a maverick, was loudly applauded for describing the
