HISTORICAL DICTIONARY of the
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`PETROLEUM
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`INDUSTRY i |
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`MARIUS S. VASSILIOU
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`SECOND
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`HISTORICALDICTIONARIES OF
`PROFESSIONS AND INDUSTRIES
`
`Jon Woronoff, Series Editor
`
`Journalism, by Ross Eaman, 2009.
`
`U.S. MaritimeIndustry,
`by Kenneth J, Blume, 2012.
`Librarianship, by
`Mary Ellen Quinn, 2014.
`
`Japanese Busin
`ondEdition, by Stuart D. B. Picken, 2016.
`Fashion Industry
`cond Edition, by
`FrancescaSterlacci and Joanne Arbuckle, 2017.
`PetroleumIndustry, Second Edition, by Marius S. Vassiliou, 2018.
`
`Historical Dictionary of
`the Petroleum Industry
`
`Second Edition
`
`MariusS. Vassiliou
`
`ROWMAN& LITTLEFIELD
`Lanham¢ Boulder * NewYork * London
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`Published by Rowman & Littlefield
`Animprint ofThe Rowman & Littlefield Publishing Group,Inc.
`4501 Forbes Boulevard, Suite 200, Lanham, Maryland 20706
`www.rowman.com
`
`To my wife, Cynthia K. Vassiliou,
`to my mother, Avra S. Vassiliou,
`and
`to the memory ofmyfather, Simos G. Vassiliou.
`
`Unit A, Whitacre Mews, 26-34 Stannary Street, London SEI] 4AB
`Copyright ©2018 by MariusS. Vassiliou
`Ail rights reserved. Nopart ofthis book maybe reproducedin any form or by any
`electronic or mechanical means,including information storage andretrieval systems,
`without written permission from the publisher, except by a reviewer who may quote
`passages in a review.
`British Library Cataloguing in Publication Information Available
`Library ofCongress Cataloging-in-Publication Data
`Name: Vassiliou, Marius S., author.
`Title: Historical dictionaryof thepetroleum industry / Marius S. Vassiliou.
`
`
`Description: Secondedition, | Lanham:Rowman & Littlefield, 2018. | Series: Historical dictionaries
`ofprofessions and industries| Includes bibliographical references
`Identifiers: LCCN 2017061840(print)|LCCN 2018001876 (ebook)| ISBN 9781538111604 (elec-
`tronic) | ISBN 9781538111598 (hardcover: alk. paper)
`Subjects: LCSH: Petroleum engineering—History—Dictionaries.
`| Gas engineering—History—Dic-
`tionaries.| Petroleum industry and trade—History—Dictionaries.
`Classification: LCC TN865(ebook) | LCC TN865 .V38 2018 (print)|DDC 338.2/728203—de23
`LCrecord available at htps://Icen.loc.gov/201 7061840
`
`Om Thepaperused in this publication meets the minimum requirements of American
`NationalStandard for Information Sciences PermanenceofPaperfor Printed Library
`Materials, ANSI/NISO Z39.48-1992,
`Printedin the United States ofAmerica
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`Chronology
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`¢. 1875 BC References to an oil trade in ancient Sumeria appearin official
`records of King Hammurabi’s government.
`¢. 450 BC Greekhistorian Herodotus describesoil and salt production from
`springs and wells in Persia.
`c. 400 BC Bamboo pipes wrapped with waxed cloth are used to transport
`naturalgas for lighting in China.
`211 BC Natural gas is discovered in Chi-lui-ching, Szechuan, China, while
`drilling for salt and is used for heat andlight.
`¢. 50 BC Greek historian Diodorus records roaring gas seeps at Kirkuk and
`presence oflarge quantities ofasphalt in Babylonia.
`347 Wells are percussion-drilled in China using bamboo poles with attached
`bits. Depths of almost 800 feet are achieved. Someof these are salt wells
`with incidental oil discoveries.
`642 Byzantine emperor Heraclitus destroys a number of temples near Baku
`wherelocals worship before burning gas wells.
`885-886 Premodernoil industry in Azerbaijan and the North Caucasus. Ca-
`liph of Baghdad grants revenues from oil springs to the citizens of Darband
`(Derbent).
`1132 Wells in China reach 3,000 feet in depth.
`1184 Ibn Jubayr recordslarge oil seeps near Mosul.
`1188 Giraldus Cambrensis describes rocks in Wales that appear to be oil
`bearing and speculates on the possibility of extracting oil from them some-
`how.
`1298 Marco Polo observesthe exploitation ofoil from surface seeps on the
`Abseron Peninsula. He notes that
`the oil
`is used for fuel and medicinal
`purposesandis transported on camels.
`1460 Francisco Ariosto writes of surface oil springs near Modena,Italy. The
`oil is used for medicinal purposes.
`1526 G. Fernandez de Oviedo y Valdéz uses pitch to caulk his ships near
`Havana, Cuba.
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`xxvi * CHRONOLOGY
`1539 Spanish ship Santa Cruz transports a barrel of Venezuelanoil to Spain,
`reportedly to help treat King CharlesI’s gout.
`1543 Hernandode Soto describes oil seeps in Mexico.
`1545 Georgius Agricola mentions oil seeps near Hanover, Germany,near the
`site of the modern oil fields of Reitling and Hanigsen, He describes the use of
`oil for illumination, lubrication, and waterproofing.
`1594 Aninscription inside a 115-foot oil well in Balakhany on the Abseron
`Peninsula identifies the proprietor as Allah Yar Mammad Nuroghlu.
`1595 Walter Raleigh observes the pitch lake in what is now Trinidad and
`Tobago.
`1596 Jan Huygen van Linschotenreports oil seeps and a primitive oil indus-
`try in Sumatra.
`1625 Johan Volck discusses possible uses ofoil in the Pechelbronndistrict of
`Alsace, but no commercial developmentoccurs.
`1636 German diplomat Adam Oleari observes 30 oil wells in the Baku area
`and remarks that some ofthem are gushers.
`1683 Engelbert Kaempfer, secretary of the Swedish embassy in Persia,visits
`Baku and observes the extraction, use, transport, and export of Abseron
`Peninsula oil.
`1702 Russian Tsar Peter I (the Great) orders oil samples to be sent to him
`from Siberia and orders further exploration of the vast region.
`1717 Tsar PeterI’s physician Gottlieb Schober describes oil sources in Rus-
`sia’s Volga—Urals area.
`1732 A small rudimentary refinery is built at Baku, Its products serve the
`local area.
`1734 Jean-Théophile Hoeffel completes a doctoral thesis in which he de-
`scribesthe results of distilling light fractions from Pechelbronn bitumen and
`oil sandsin Alsace.
`1737 Fifty-two hand-dug wells are producing oilatthesite of the present-day
`giant Balakhanyfield on the Abseron Peninsula.
`1746 Louis Pierre Ancillon de la Sablonniére and Jean d’Amascéne Eyrénis
`begin mining oil sands in the Pechelbronn area of Alsace. Oil sands are
`broughtto the surface, and the oil is washed out of them. An oil company is
`formed, with 40 shares issued. Fyodor Pryadunovy builds a rudimentary in-
`stallation to collect oil from the surface of the Ukhta River in Russia’s
`Timan-Pechora area.
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`CHRONOLOGY * xxvii
`1748 Peter Kalm of Sweden publishes a map showing oil seeps in Oil Creek,
`in what is nowPennsylvania.
`1788 Peter Pond reports that natives in the area of the Athabasca oil sands
`(present-day Alberta) use bitumento caulk their canoes.
`1795 M.A. Symesvisits the Yenangyaungoil field in Burma, a country with
`a large oil industry that has existed perhaps for centuries by this time. He
`describes the export ofoil via boat.
`1806 David and Joseph Ruffnerdrill a salt well using a spring pole, drive
`pipe, casing, and tubing near the Kanawha River in western Virginia (today
`West Virginia) andstrike oil instead.
`1813 Manualresearch drilling is conducted at the Pechelbronnfield in Al-
`sace to depths of 640 feet to guide development of the oil sands mining
`operation.
`1815 Oil is remarked as an undesirable by-product from Pennsylvania brine
`wells.
`1821 A natural gas well is drilled in Fredonia, New York, and somelocal
`residences are served with gas for lighting.
`1825 An order from Russian finance minister Yegor Kankrin placesall oil
`wells underthe controlofthe state.
`1827 British geologist John Crawfordinvestigates the Yenangyaungoilfield
`in Burma. He describes the hand-dug wells as shafts about four feet square,
`cribbed with wood. Crawford estimates annual output at the equivalent of
`250,000-300,000 barrels. He notes seeing about 200 boats waiting to load
`oil. Oil is used in the area for many purposes,including illumination, pre-
`serving wood, and boat building.
`1830 Johann Lenz investigates the Baku oil industry for the Imperial Acade-
`my ofSt. Petersburg. He reports annual production equivalent to 30,145
`barrels from 80 wells or springs.
`1833 Benjamin Silliman (Senior) performs an experimental distillation of
`crudeoil.
`1835 Nikolai Ivanovich Voskoboinikov of the Corps of Mining Engineersin
`Baku designs and implementsa ventilation system to improvetheefficiency
`and safety of hand-dugoil pits.
`1836 Gian Bianconi studies the geologyofoil and gasin Italy. Natural gas is
`used to light the bathsat Poretta.
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`xxviii ¢ CHRONOLOGY CHRONOLOGY»xxix
`1837 A pilot refinery designed by Nikolai Ivanovich Voskoboinikovis built
`1858 Seneca Oil Company of New Haven, Connecticut, is formed as a result
`near Baku.
`of disputes within the Pennsylvania Rock Oil Company and takes over the
`petroleum exploration effort in Pennsylvania. Seneca hires Edwin Drake.
`1838 Oil is produced on ChelekenIsland in the Caspian Sea from 3,500
`The world’s first modern natural gas company, the Fredonia Gas and Light
`hand-dugpits or surface seeps.
`Company,is established.
`1844 A report detailing ideas developed by Nikolai Ivanovich Voskoboini-
`1859 Successful oil wells are drilled in West Virginia by Robert Hazlett’s
`kov ondrilling for oil rather than digging pits by hand is presented to the
`Virginia Petroleum Company and by Charles Shattuck. Edwin L. Drake
`Russian governmentin the Caucasus by Vasili Nikolaevich Semyonov.
`strikes oil at a depth ofabout 69 feet with his well near Titusville, Pennsylva-
`1845 Prince Mikhail Vorontsov, first viceroy of the Caucasus, authorizes
`nia, for the Seneca Oil Company.
`fundsforoil drilling based on Voskoboinikov’s ideas.
`1860 The steamboat Venango carries the first load of petroleum to Pitts-
`1846 A 69-foot well is drilled to explore for oil in the Bibi-Eibat area near
`burgh.
`Baku andstrikes a small quantity of crude. The well
`is drilled under the
`1861 Thomas Sterry Hunt and E. B. Andrews independently elucidate the
`commandof Major Alexeev,based on the ideas of Voskoboinikov.
`anticlinal theory of petroleum trapping in geological formations. McClintock
`1849 Samuel Kier establishes a small refinery in Pittsburgh to process and
`No. 1, the oldest continuously producing oil well in the world, begins pro-
`bottle oil that
`is a by-product from his family’s brine wells at Tarentum,
`ducing near Oil Creek in Pennsylvania,notfar from the Drake Well.
`Pennsylvania. He markets “Kier’s Rock Oil”as a patent medicine.
`1865 Latin America’s first successfuloil wellis drilled in Peru’s northwest-
`1850-1856 Andrés Pico distills oil from hand-dug pits in southern California
`em coastal region, discovering the Zorritos oilfield.
`to produce lampoil and illuminate the San Fernando Mission.
`1866 Atlantic Petroleum Storage Company,the ancestor of Atlantic Refining
`1851 Abraham Gesnerdevelopsa distillation process yielding an illuminat-
`Company(eventually part of Atlantic Richfield), is established. Vacuum Oil
`ing oil from Trinidad asphalt.
`Company, an ancestor of Mobil, is established. Oil is collected from tunnels
`dug at Sulphur Mountain in Ventura County, California, by the brothers of
`1853 Ignacy Lukasiewicz distills kerosene from crude oil and develops a
`railroad baron Leland Stanford.
`lamp to burn it. On 31 July, one of his lamps provides light for an operation
`in Lvov’s hospital. Over the next several years, Lukasiewicz produces and
`1868-1873 The world’sfirst giant oil field, La Brea (also called Negritos), is
`refines oil from hand-dug wells in the Bobrka Forest (present-day Poland).
`discovered in the northwestern coastal region of Peru.
`1854 Pennsylvania Rock Oil Companyis established by George Bissell and
`1870 Standard Oil Companyis founded by John D. Rockefeller in Cleveland,
`Jonathan Eveleth. This is one of the first modern oil companies. Natural gas
`Ohio.Oil City Oil Exchangeis established in Pennsylvania.
`from a water well
`in Stockton, California,
`is used to light the Stockton
`1871 Bradford field is discovered in Pennsylvania near the NewYork border.
`courthouse.
`Rangoon Oil Company(antecedent to Burmah Oil)is established.
`1855 Benjamin Silliman Jr. of Yale University reports to the Pennsylvania
`1872 Tsar AlexanderII establishes new rules for the oil industry, auctioning
`Rock Oil Companyonhisdistillation experiments on Pennsylvania crudeoil.
`oil leases to private investors, including foreigners. A boom beginsin the
`He concludes that crude oil can be distilled to obtain a range of useful
`Russianoil industry.
`products, including keroseneforillumination.
`1874 Atlantic Refining becomesaffiliated with Standard Oil.
`1 well, Ennis-
`1857 James Miller Williamsstrikes oil with the Williams No.
`killen Township, Ontario, and beginsrefining the oil to produce kerosene in
`1875 Continental Oil and Transportation Company is founded in Ogden,
`1857 or 1858. Some call Williams No.
`|
`the first modern well in North
`Utah. This company eventually becomes Continental Oil, Conoco, and Co-
`America,but it is not clear from Williams’s records if his early wells were
`nocoPhillips. The Nobel brothers (Ludvig and Robert, with Alfred of Nobel
`drilled or were dug by hand and cribbed. Michael Dietz invents a kerosene
`Prize fameasa partner) begin activities in Bakuoil industry.
`lamp.
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`* CHRONOLOGYxlii_ CHRONOLOGY=»xiii
`1980 Averageoil price nears $37/b, a level not again reached in nominal
`1988 Aramco changes its name to Saudi Arabian Oil Company, or Saudi
`terms until 2004 (in 2016 dollars, 1980 prices averaged over $107/b). U.S.
`Aramco. The “Aramco” name continues to be used informally. Iran-Iraq
`Warends.
`Congressestablishes Arctic National Wildlife Refuge (ANWR). Most ofthe
`refuge is closed to petroleum exploration and development, with the excep-
`1989 Exxon Valdez oil spill occurs in Prince William Sound, Alaska. Soviet
`tion of the “1002 Area” near the Beaufort Sea. Saudi Arabia completes
`Ministry of the Gas Industry is reorganized into a company named Gazprom.
`acquisition of Aramco. Iran-Iraq War begins whenIraq invades Iran. Iran
`Egyptis reinstated in OAPEC. Aubrey McClendon and Tom Ward establish
`acquires the assets ofall four successful joint ventures (SIRIP, IPAC, LAP-
`Chesapeake Energy with aninitial investment of$50,000.
`CO,and IMINOCO)that were outside the frameworkofthe 1954 consortium
`agreement. The assets are taken over by the newIranian Oil Offshore Com-
`1990 Iraq invades Kuwait, precipitating the 1991 Persian Gulf War. A $120
`pany (IOOC). Elf Aquitaine begins tests of horizontal drilling in European
`million judgment is issued against Amocoin the case of the 1978 Amoco
`oil fields.
`Cadiz oil spill. PAVSA acquires Citgo.
`1981 Aramco completes construction of the Petroline pipeline from Abqaiq
`1991 US-led coalition drives
`Iraq out of Kuwait. Total Compagnie
`to the Red Sea port of Yanbu.
`Frangaise des Pétroles becomes Total. USX (formerly U.S. Steel) creates a
`separate stock for its Marathon Oil subsidiary, USX-Marathon. Mitchell En-
`1982 Exxon and Tosco’s Colony Oil Shale Project in Colorado is canceled
`ergy under George P. Mitchell performs the first horizontal fractured well in
`because oftechnical difficulties and falling oil prices. U.S. Steel acquires
`the Barnett Shale in Texas.
`Marathon Oil Company. Occidental Petroleum acquires Cities Service Com-
`pany. Tunisia joins OAPEC.
`1992 Ecuador suspends its OPEC membership. Gazprom becomesa joint
`stock company in Russia. Argentinean governmentbeginsprivatizing YPF.
`1983 Ali al-Naimi becomesthe first Saudi president of Aramco. Oil and Gas
`BPdiscovers Cusianafield in Colombia.
`Journal begins the OGJ400 (later OGJ300 and OGJ200)tabulation of the
`largest U.S.-based petroleum companies. The journal will also publish the
`1993 Russia establishes Lukoil, formerly the Soviet Union’s first integrated
`OGJ100 list of the largest petroleum companies headquartered outside the
`oil company,as a joint stock company. Russia establishes Yukos, combining
`United States. Union Oil Company ofCalifornia becomes Unocal.
`a numberof Soviet-era assets. Russia forms Rosneft from assets previously
`held by Rosneftegaz, the successorto the Soviet Ministry ofOil and Gas.
`1984 Standard Oil of California acquires Gulf Oil Corporation and changes
`its name to Chevron. Pennzoil agrees to acquire three-sevenths of Getty Oil.
`1994 Gabon suspends its OPEC membership. Russia signsits first-ever pro-
`Texacosteps in and acquires all of Getty, Pennzoil sues Texaco for tortuous
`duction-sharing agreement with a consortium led by Royal Dutch Shell to
`interference. This will result in a record jury award of $10.5 billion in dam-
`develop oil and gas off Sakhalin Island. The license will be issued in 1996. In
`agesto Pennzoil.
`2007 Gazprom will take majority control of the project. Exxon is ordered to
`pay $287 million in compensatory damagesand $5billion in punitive dam-
`1985 Compagnie Francaise des Pétroles becomes Total Compagnie
`ages for the Exxon Valdez oil spill. A scandal breaks out in France involving
`Frangaise des Pétroles. Standard Oil Company of Indiana becomes Amoco.
`corruption and embezzlement at Elf Aquitaine(later part of Total), unfolding
`Petrobras discovers Marlim and Marlim Sulin the offshore Camposbasin.
`over several years and eventually reachingto the highest levels ofthe French
`government.
`1985-1986 Oil Countershock: Saudi Arabia gives up singlehandedly trying
`to defend the price against market pressures.
`It
`increases production and
`1995 Venezuela begins the Apertura Petrolera by launching a suite of new
`offers attractive netback pricing. Oil prices drop to a low of about $8/b
`policies meantto attract foreign investmentin the country’s upstream petro-
`during 1986.
`leum sector. Russia forms Sibneft by combining the Soviet-era oil company
`1986 Iraq bombs Iran’s Kharg Island oil installations and damages them
`Noyabrskneftegaz, the Omskrefinery, a distribution network, and other en-
`severely. Tunisia requests suspension of OAPEC membership. First success-
`tities. Loans for Shares scheme begins in Russia under the government of
`ful multifracture horizontal wellis drilled in Wayne County, West Virginia.
`Boris Yeltsin.It will allow a small groupofoligarchs to gain controloflarge
`state enterprises, including petroleum companies,for relatively small sums.
`1987 BP completes acquisition of Sohio. Pennzoil settles with Texaco for
`Sibneft and Yukos, among others, pass into private control in this fashion.
`about$3billion.
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`146 * DRAKE, EDWIN L. (1819-1880)
`his father, James C. Donnell, was then vice president and general manager.
`Herose rapidly through the ranks. When his father becamepresidentin 1911,
`Donnell became a director of the company. Whenhis father died in 1927, he
`succeeded him as president. He remained president until 1948, when he was
`succeeded in turn by his own son, James C. DonnellII.
`Donnell began a major expansion program in 1930. He bought a majority
`interest in Transcontinental Oil Company as well as several interests from
`other oil companies. He also purchased service stations. By 1948, he had
`nearly doubled Ohio Oil’s assets. Donnell increased annual profits by nearly
`a factor of 10 during his tenure, to $68 million. In 1936, he absorbed a former
`subsidiary, Marathon Oil Company,
`into the parent company. Ohio Oil
`would adopt Marathon as its company name in 1962, Otto Donnell died 9
`April 1961.
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`DRAKE, EDWINL.(1819-1880). Superviseddrilling an early oil well near
`Titusville, Pennsylvania, helping to launch the modern Americanoil indus-
`try. Drake’s well
`is popularly considered the “first modern oil well,” al-
`thoughthis is an oversimplification. There were contemporaneous and even
`earlier efforts (see FIRST OIL WELL), but Drake’s well and its conse-
`quencesare regarded as moreprototypical of the modern industry than most
`of the other efforts, importantas they also were.
`Edwin Laurentine Drake was born 29 March 1819 in Greenville, New
`York, and grewup in Castleton Corners, Vermont. Heheld several different
`jobs before becoming a conductor for the New York and New Haven Rail-
`road, In 1857, hefell ill and resigned from that job, settling in New Haven to
`recuperate. During this period, he bought somesharesofstock in the Seneca
`Oil Company. Seneca wasan offshoot of George Henry Bissell’s Pennsyl-
`vania Rock Oil Company, one of the world’s first modern oil companies.
`The Pennsylvania Rock Oil Company had obtained samples of crude oil
`from surface seeps near Titusville and sent
`them to Yale University for
`analysis. Professor Benjamin Silliman Jr. had reported in 1855 that the
`crudeoil could be distilled to obtain useful products, including kerosene for
`illumination. The depression of 1857 stalled the company’s plans. Several of
`the shareholders organized a new company, Seneca, and leased land near
`Titusville from the old company.
`Drake accepted a job with Senecato travel to Titusville and report on the
`site to the stockholders. He madea brieftrip in December 1857 and reported
`positively, having witnessed the skimmingofoil from Oil Creek. The stock-
`holders sent him back in May 1858 as the general agentof the Seneca Oil
`Company, with thefictitioustitle of “Colonel”to lend him moreprestige. His
`mission was to find a way to produceoil in quantity. Drake spent several
`weeks digging in the mainoil spring on the Hibbard farm. Unfortunately he
`only struck water. Deciding to drill for oil, he traveled to Tarentum, near
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`DRESSER INDUSTRIES + 147
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`Pittsburgh, to observethe drilling ofsalt wells. He acquired a six-horsepower
`steam engine to power the drill, which was a cable tool that operated via
`percussion and not the modern rotary type (see DRILLING TECHNOLO-
`GY). Drake spent the winter of 1858 constructing a derrick to support the
`drill. He hired William A. “Uncle Billy” Smith, a blacksmith and experi-
`enced salt driller. Their first efforts were stymied by groundwaterflooding,
`until they cased the well by driving cast-iron pipe downthe hole with an oak
`battering ram. They resumed drilling in August 1859, by which time the
`companywasnearly out of money and wanted to shut downthe operation.
`On 27 August 1859, work stopped after the drill slipped through a crevice
`at a depth of 69 feet. The next day, Uncle Billy noticed oil floating at the top
`of the well, confirming that they had made a discovery, Drake drilled a
`second well nearby,striking oil at 480 feet. The first well produced about 20
`bpd, the second one about 24, which are extremely low rates of production
`by the standards that would soonbe established. A frantic oil boom followed
`Drake’s discoveries, launching the modern U.S.oil industry.
`Drakeleft the oil industry in 1863. He had served for a timeas president of
`the Seneca Oil Company but was not a good manager and hadbeenforced to
`resign in 1860. Although he had paved the wayforothers to become wealthy,
`he made only a modest sum, and he managedto lose even that through poor
`investments. In 1873, his friends in Titusville convinced the Pennsylvania
`legislature to provide him with a pension in recognition of his contributions
`to the state’s economy. Drake lived with debilitating muscular illness in
`Bethlehem, Pennsylvania, until his death on 8 November 1880.
`
`DRESSER, SOLOMON ROBERT.See DRESSER INDUSTRIES.
`
`DRESSER INDUSTRIES,Oil field services company; later part of Halli-
`burton. Dresser was founded by Solomon Dresser (1842-1911), who invent-
`ed the Dresser cap packerto keep oil and water separated in a well. He did
`not invent the first packer, but he used rubberfor a tight fit and received a
`patent in 1880. Hesold his productin the industry surrounding the Bradford
`oil field in Pennsylvania. In 1885, he invented the Dresser coupling for
`joining pipes so that gas would notleak. Again he used rubber. The Dresser
`coupling helped enable long-distancepipelines for natural gas.
`As the gas industry expanded, so did the company’s fortunes. Dresser’s
`descendantsran thefirm after his death in 1911, and by 1927 annual reve-
`nues were $3.7 million. In 1928, the company wentpublic. In the 1930s,it
`acquired a number of companies making valves, pumps, and other mechani-
`cal equipment. After World WarIL, it diversified into other oil field prod-
`ucts, including drill bits, drilling mud, and derricks. In 1950, the company
`movedits headquarters to Dallas, Texas.
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`148 + DRILLING TECHNOLOGY
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`DRILLING TECHNOLOGY «+ 149
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`the 1980s, when the
`Acquisitions and diversification continued until
`downturn in the petroleum industry (see OIL COUNTERSHOCK)forced a
`refocusing ofthe organization. Dresser Industries divested divisions in areas
`such as insurance, construction equipment, and mining. But after 1987-1988,
`it resumed acquisition and diversification.
`In 1987,
`it entered into a joint
`venture with Litton Industries to form Western Atlas, whichoffered clients
`the full spectrum of upstream services from exploration to production, in-
`cluding geophysical prospecting and well logging. In the early 1990s, Lit-
`ton bought back Dresser’s share of Western Atlas and in 1993 spun it off as
`an independent company(later to be acquired by Baker Hughesandstill
`later to be partially acquired by Schlumberger).
`In 1988, Dresser acquired M. W. Kellogg and entered into a joint agree-
`ment with Komatsu of Japan to manufacture construction equipment.
`In
`1994, it acquired oil field services firm Baroid Corporation and pump manu-
`facturer Wheatey TXT. In 1998, Dresser Industries merged with Halliburton.
`
`Thesaltdrilling industry was where the early petroleum industry obtained
`its drilling technology.In the 1830s and 1840s,in what is now West Virginia,
`salt and oil drilling operations were sometimes water powered. Edwin
`Drake,the driller of an early oil well near Titusville that sparked the Penn-
`sylvania oil boom,traveled to Tarentum to observe salt drilling techniques.
`Healso tapped thesalt industry for an experienceddriller, William A. “Uncle
`Billy” Smith,to act as a rig mechanic and blacksmith.
`Drake’s cable tool was descended from the spring-pole technique and the
`methodsof ancient China. A wooden derrick, “Drake’s yoke,” about 30 feet
`tall, supportedthe tools. Thesteel bit, chisel pointed and aboutfourfeet long,
`was suspended from rope (“cable”) and was raised and dropped repeatedly to
`pulverize the rock. The raising of the bit was accomplished by rocking a
`“walking beam,” driven by a steam engine. Every three to eight feet drilled,
`the bit was raised anda bailer loweredinto the hole to removedebris. Drake
`also employed casing in the hole to guard against flooding by groundwater
`and to keep the sides of the well from collapsing. Cable tools continued to
`dominate throughoutthe 19th century and are still used in some applications
`DRILLING TECHNOLOGY.Drilling technology originated in ancient
`today. The “Pennsylvania” type rig had a wooden derrick, eventually stan-
`times, motivated by the search not for petroleum but for water. Percussion
`dardized at 72 feet or 82 feet in height. By the early 20th century, cable tool
`drilling methods were developed in China about 2,000 years ago. Bamboo
`rigs were more often a kind used in California. The “California” type had
`frameworkstructures, similar to modern derricks, were employedto lift and
`iron and steel derricks supporting heavier tools for deeper drilling. Pennsyl-
`drop a heavy chiseling tool. The modern cable tool operates on the same
`vania-type rigs could drill to about 2,000 feet, whereas California-type rigs
`basic principle. The Chinesedrilled wells as deep as 3,000 feet, although
`could drill down to 10,000 feet. Cable tool rigs were effective andrelatively
`completion may have takenseveral generations.
`simpleto operate, but they were slow. They averaged about 25feet per day,
`At Pechelbronn (Alsace, France), as many as 140 manual wells were
`depending on the type ofrock.
`drilled in 1813 at an early oil sands mining operation that had been operating
`In the 20th century, rotary drilling largely supplanted cable tool drilling.
`since the 18th century. The wells were not drilled to obtain oil directly but
`Rotary rigs eliminated the laborious bailing process and could drill faster and
`rather to guide the development of oil sands mining. In the 19th-century
`deeper. Rotary rigs can drill hundreds or even thousands of feet per day.
`United States, salt drove the development ofdrilling technology. Between
`Elementary rotary drilling techniques were used as far back as Egyptian
`1806 and 1808, David and Joseph Ruffner completed a 58-foot salt well near
`times. In 1844, Robert Beard obtained a U.S. patent for a rotary drilling
`the KanawhaRiver, not far from Charleston, in whatis today West Virginia.
`system with hollow drilling rods and circulating fluid to removethe cuttings.
`They usedaspring pole. This consisted of a long timber pole, anchored at
`The idea underwent many improvements during the 19th century, and a
`one end and propped on a fulcrum.A rope holding heavy chisel-type drilling
`rotary tool was used in Corsicana, Texas. One was also employed by An-
`tools was suspended from the free end ofthe pole. An operator would use
`thonyLucasat Spindletop.Initially, rotary rigs could only be used in soft
`stirrups to mount the pole and push it down withhis legs, so that the drill bit
`rock formations. This problem wassolved by the invention ofthe roller cone
`would hit the target. The spring pole would bring the tools back up, so a new
`stroke could bestarted.
`drill bit by Howard HughesSr. in 1908. The bit used 166 cutting edges
`distributed over the surfaces of two opposingly mounted metal cones. The bit
`The Ruffners ushered in a vigorous salt well industry that inspired the
`ground the rock rather than chipping or scrapingit and could be used in hard
`petroleum industry. For one thing, oil was sometimes an undesirable waste
`formations.
`productin salt drilling. Samuel Kier, who began marketing petroleum as a
`The 20th century saw many innovations in all areas of rotary drilling:
`patent medicine in 1848, obtainedit from his family’s brine wells in Tarent-
`collars to prevent well deviation from vertical, advances in drilling fluids,
`um, Pennsylvania, near Pittsburgh.
`blowoutprevention and control, and techniques of well cementing. The abil-
`ity to control blowouts enabled deeper wells. In 1938, a depth of 15,000 feet
`
`IWS EXHIBIT 1044
`
`EX1044009
`
`IWS EXHIBIT 1044
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`EX_1044_009
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`

`

`174 * FIRST OIL WELL
`opened the taps and allowed all available production in Texas. However,
`there waslittle spare capacity left in Western countries. Thefirst oil from
`Prudhoe Bayin Alaska wouldnotbe shipped until 1977. In the North Sea,
`Ekofisk and Brent had only been discovered in 1969 and 1971 and had not
`yet entered commercial production. Mexico’s Cantarell field would not be
`discovered until 1976, and the major deepwater discoveries in the U.S. Gulf
`
`of Mexico were
`still
`in the future. The early 1970s were thus a time of
`decreasing flexibility in the major Western consuming nations.
`At the same time, OPEC was becoming moreassertive, even before the
`Yom Kippur War. The Tehran Agreementof 1971 raised producer country
`profit shares. Individual OPEC countries began leapfrogging each other to
`gain additional concessions from the majoroil companies. OPEC members
`nationalized their industries. Algeria expropriated 51 percent of foreign oil
`interests between 1968 and 1971. Libya began expropriation in 1971. Iraq
`completed its nationalization process in 1975. Venezuela had been squeez-
`ing foreign companiesharder and harder for two decadesand nationalizedits
`industry in 1975-1976. Arab Gulfcountries were beginningto take overtheir
`oil industries through participation agreements. Added to all this was a
`U.S. foreign policy that somewhat favored high oil prices because these
`helped strengthen the shah in Iran,seen as a majorpillar of anticommunism.
`This potent mix created the conditions for the First Oil Shock, which was
`an importantturning pointin the world oil market. It ended a relative stability
`that had existed since the end of World WarII and undermined the Western
`presumption of an easy and guaranteed prosperity fueled by cheap petrole-
`um. See also OIL COUNTERSHOCK; SECOND OIL SHOCK; THIRD OIL
`SHOCK.
`
`FIRST OIL WELL.The question of whodrilled the first modern oil well is
`not an easy one to answer and depends to a great extent on definitions.
`Edwin Drake’s 1859 well near Titusville, Pennsylvania, is popularly con-
`sidered the first modern oil well. But there were contemporaneous and even
`earlier efforts elsewhere. Drake’s well is most likely singled out becauseit
`had several key attributes: (