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ExxonMobil in Alaska: Strike #1 at Susie for new partners
Petroleum News
In the summers of 1963 and 1964, at least six oil industry helicopter-supported field parties, including Richfield Oil (predecessor to Atlantic Richfield,) were fanned out across the North Slope.
The abandoned Navy camp and airstrip at Umiat, located on the Colville River in NPR-4, served as a base of operations. Wien Airlines had a station agent and several bush pilots based there, as well as three-day-a-week scheduled flights from Fairbanks on its route to Barrow.
In the summer of 1963, Richfield sent geologists Garnett Pessel and Gil Mull, two youngsters with several years of experience, to the North Slope to build on the data acquired by field parties in 1959 and 1960 and U.S. Geological Survey reports from the 1940s and 1950s.
Late in the season after two months of exploring, Pessel wrote a letter to Richfield’s district geologist Ben Ryan, conveying their conclusions and describing a promising outcrop he had seen on the banks of the Sagavanirktok River.
“It was Cretaceous sand that just crumbled in your hand,” Charlie Selman, Richfield’s division geophysicist, said at a banquet in 1988. “He (Pessel) got all excited and wrote, ‘If we can’t find an oil field in something like this, I give up.’”
Selman added to Pessel’s letter, recommending Richfield send a seismic crew up north.
“As luck would have it,” said Selman, “a drilling operation had been canceled somewhere else, so ... Jamison (Harry Jamison, Richfield’s Alaska district manager in Los Angeles) got the funds to put a seismic crew on the North Slope.”
Great deal for Humble Despite Richfield’s growing enthusiasm for North Slope exploration, limited budgets probably would have quashed the company’s oil hunting efforts in the Arctic were it not for a strategic partnership it entered with Humble, then a subsidiary of Exxon, in preparation to bid on leases in the State of Alaska’s first North Slope lease sale in December 1964.
“That partnership has to have been one of the all-time great deals for Humble,” said Mull, who went to work for Humble in 1967. “It bought into half of everything Richfield had done to that point (which included surface field mapping, seismic data, and federal leases Richfield had previously acquired) — all for $1.5 million in cash and an obligation to pay for another $3 million worth of seismic data.”
In 1966, ARCO and Humble spent more than $4.5 million (in 1968 dollars) on the Susie No. 1 well, just north of the Brooks Range foothills on the Sagavanirktok River. The well had oil shows but not enough to be deemed commercial. The partners abandoned it on Jan. 9, 1967.
Still, from that great loss came one of the biggest triumphs in business history: The discovery of oil at Prudhoe Bay.
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