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THE $2BN BET

July 23, 2007 3:17 PM

Leslie Blair has been an oilman for 30 years.  Originally from Aberdeen in Scotland, he has worked in Africa, Asia and the Middle East as well as Britain’s North Sea oilfields, and has pretty much seen it all.  His job is exploring for new deposits -- an expensive and risky pursuit with as many tales of woe as of success.  He spent eight years in Vietnam and found nothing -- “imagine my frustration now that I hear they have begun finding oil there after I left.”

Leslie is full of Scottish charm, irrepressible, and well able to laugh at himself –  crucial survival skills in the roller coaster industry of oil exploration, I suspect.  He is now having fun in his new job -- running a Canadian-Turkish joint venture looking for oil in Kurdistan in the north of Iraq.  He has 1,000 men working for him in the Taq Taq oilfield, and about $2bn to spend.  Oil companies apparently do nothing on a small scale.

The environment is not ideal.  They have poisonous vipers -- one recently bit one of his workmen -- a constant emission of hydrogen sulfate gas (the main component in stink bombs), and a total of 12 uncleared minefields in their concession area.  But oilmen are nothing if not tough, and Leslie loves it in Kurdistan.  He has even brought his Filipina wife to live with him, rare among expats living anywhere in Iraq.

They have heavy security around the oil field, but since they started drilling in May 2006 they have not had a single incident – Kurdistan’s territory is still mercifully free of the violence that afflicts the rest of the country.  But what excites Leslie most is the fact that of the eight wells they have sunk, every one has produced oil.  Virtually unexplored under Saddam, it now appears that Kurdistan may have significant oil deposits, under land that for centuries has seen only grazing sheep.

There is the slight problem that Leslie’s company, TTOPCO, does not have a license to drill from the Iraqi government – they have come in on invitation from the local Kurdish authorities.  Should Baghdad decide to pass an oil law which does not allow foreign exploration, Leslie and his company could lose their entire investment.  But Leslie says that oilmen love risk -- the chance to be one of the first into a new oil producing area is too good to pass up.  And what is $2bn to an oil company, with oil at $70 a barrel?  A little venture capital?

Leslie’s company is betting that eventually the central government will realize that Iraq’s dilapidated oil industry cannot modernize itself without foreign expertise, and their oil contracts in the north will be honored.

And if not, Leslie will move on to another country, with the same sense of humor and another great story to tell: “Vietnam was bad, but guess what we did with $2bn in Kurdistan...”

July 23, 2007 | Permalink | User Comments (1)

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Posted by: kurdistan | Sep 1, 2007 10:50:22 AM

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