Shownotes
1980 was one of the largest booms ever in the oil and gas business, and David Allard was in the right place at the right time. David just got out of college with a Geology degree and was lucky enough to get a job with only a BS degree and covered twenty plus countries over a twenty plus year period of exploration around the globe that comes with being a geologist in the oil field. Over his career, David has survived five major downturns. David chronicles 30 years of being a geologist in a book called A World of Culture, Oil and Golf which is journal of his life lessons, and business and cultural experiences. David said it’s key to the success for the business to engage the host country and follow the rules and create value for everyone involved.
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Exploring A World of Culture, Oil and Golf with David Allard
We’re fortunate to have David Allard. He is a chief geologist and author of A World of Culture, Oil and Golf. I went through the book and I would encourage you to go through. I think there’s no place on the planet that this guy hasn’t either landed on, been in or been over, or so highly traveled. Thanks so much for taking time.
Thank you, Bob. It’s my pleasure to be here.
Let’s start with the story that got you into the oil and gas business.
A World of Culture, Oil and Golf
That’s fun because growing up I knew I was going to be an Earth Scientist from junior high during the sand experiments with little rivers. I grew up and went to college. In the first orientation day, I was going to be a forestry major. I met some professors and they said, “That would be a good thing if you’ve got a PhD, but then you probably wouldn’t get a job. Why don’t you be a geologist?” I changed right there and I’ve been a geologist ever since.
Where did you go to school?
Edinboro University of Pennsylvania.
Geologists in Pennsylvania in the oil field, I usually hear Colorado School of Mines, South Dakota or the Dakotas and elsewhere through Pennsylvania with the kind in mind but the Marcellus kind of brought that in.
Back in 1980 when I graduated, it was one of the largest booms ever in the oil and gas business. They needed a geologist and my professor said you can work anywhere. I went to California and I ended up with Sohio initially in San Francisco. I was lucky enough to get a job with only a BS degree. I call myself a Boom Baby, if you will.
You graduated in ’80s while the oilfield began puny not long after that.
I maybe not so proudly say I’ve survived five major downturns and the first one you’re speaking of about 1985, ’86. There was some disruption in the force of OPEC and Saudi, a commitment of the oil reserve and it just changed the world demand and we had our first downturn. We went from thinking we’re going to have $100 oil forever. A lot of business leaders bet the farm on that future income. Many of them went by the wayside in the ’80s because of it.
You went to San Francisco. Were you married at that time or when did you meet your bride?
I met my bride at Midland, Texas in the mid ’80s.
Thinking about folks who have different thoughts, what does a geologist do in the oil field?
Our job as geologists, the bottom line is we say, “Here’s where you drill to find more oil and gas production or reserves,” whatever the objective of your company model is.
You point the drilling rig?
Essentially, and we do that with a series of tools. Of course, we map the subsurface and try to identify structures are traps for the oil and gas. That technology’s evolved quite a bit. In recent years real improvement and success rate came from 3D seismic.
Does it follow along with the computer capability? I can remember there were a few companies that started out in that 3D graphic world way back then. Let’s talk about the book because I think most people have no idea about how much travel and exploration around the globe comes with being a geologist in the oil field. Going through the book, how many countries did you say you’ve been through?
The book covers twenty plus countries over a twenty plus year period. I personally visited 40 or more countries, but I focused on the business aspect of experiences in the book. My very first move was with a major oil company. I did several years in the US space with a variety of jobs, production, exploration. I joined the international group and within a couple of weeks I found myself in Turkey and riding up the mountains with a guy that spoke very little English and he had one cassette tape.
He said, “You like music?” He played Michael Jackson for five hours. I’ve got to the rig and the geologist who was relieving said, “That’d be a great thing for your journal.” It hit me from that point forward for the next twenty plus years and I kept a journal. I distilled that down to a readable novel format that is the book now. I feel like it’s a message to share my business experiences. A lot of the book talks about cultural experiences and reviews have picked up on that very in tuned with the local culture. It’s key to success for the business, to engage the host country and follow the rules and create value for everyone involved.
Be prepared to adapt to change.
I think about now when you hear Michael Jackson come on to the radio, does it take you back to your ride in Turkey?
On occasion, it does.
As you’re with me here domestically and then you get the word that you’re going to Turkey, you’re going to China, when you get that type of heads up, what’s your thought process when you’re going to a country?
As a geologist, the first thing we do is make maps and say, “Drill here,” but we have to understand the history of that geologic basin. We talk about how the rocks, sand, shale or whatever the target is, what are the risks of the oil business? We work that together with the engineers. We do a lot of homework on these subsurface, if you will. The surface is a whole other world.
Either there’s a surface risk, political, military, terrorism and just things like that that you have to consider. I was lucky enough to work for larger companies that had the resource to research the security risk above ground risk, political and fiscal risk well in advance. By the time we got there to drill wells, there had been a lot of homework. There would been a deal made and negotiated contract and that kind of thing so there are many aspects of it.
We were talking about that you’re a runner and you’re a golfer. I think about trying to stay in the running game when you’re out in some of these remote sites and yet you still ran.
I took a few jogs around the perimeter of our jungle of boats in Guatemala. I didn’t leave the perimeter in Chad, Central Africa. My very first trip to Turkey was when I took off into the mountains but that was my first trip and I didn’t understand the security as well as I do now.
You go to these foreign locations and people don’t have an idea of the duration of your time on the ground in those days. Talk a little bit about how long you were on ground and why that was done that way?
Typically, an international venture starts with the company deciding to enter that country and they’ve portrayed the chance for success, the geology, the potential reserves, whatever fiscal terms and political risks. You enter the country and you may win a license. That license may be a bid round sale with the government where you obligate to drill a couple of wells, shoots and seismic, hire some local labor, some engagement locally.
You may get a license and not drill the well for say a year or two as you digest the data and you make an exploration discovery, especially if it’s a remote away from facilities. It may be years of going back and drilling appraisal wells and then finally deciding to make that jump to a development, which is an incredible amount of money to move into an oil and gas business. The amount of years, investment and risk taken on by these companies long before they ever see the profit is part of the reason I wrote the book, to try to tell some stories and I was in different stages of development for different countries and different places.
For the folks up and down the front range of Colorado, we’ve seen seismic crews doing their work in the big wheeled vehicles, thumping around on the ground. In the jungles of Guatemala, Chad and other places, how far behind is it once you get the contract? Is seismic the next step? Once seismic is shot, is there a general timeframe between when they shoot seismic to when you elect to drill?
Yeah. Typically, it may take months or a year to acquire the seismic data. It depends how large of a footprint and what kind of seismic. If you’re remote working through a jungle that does not have roads, then that just add months and months. Typically, it may be a year cycle to permit, acquire, process and interpret the seismic before you ever have data that goes into the geology.
A World of Culture, Oil and Golf: The focus of geologists is the rocky outcrops or where there’s data with the hard data, rock data, oil and gas shows.
It may be a year or more to get to the point where the maps are becoming clear and then you present that to the leadership of your company, the decision makers and they may go, “Next year we’re going to drill.” There may be cycles of windows of opportunities to drill. For example, in Alaska you can only draw in the winter because it’s an onshore North Slope. There is some place to work in there but you can only drill in the winter because you want the ground frozen so you don’t damage the permafrost tundra layer.
You were on the receiving end of those budgetary decisions early in your career. Later in your career you were involved more about the decisions on budget, where to send and what to do?
That’s correct. Early in my career, I was the guy that went out to the well site and made sure that we’re capturing the rock samples, running logs to collect data and understand if we have a discovery well or not. Then later on, I moved into management at GM and my final position was the chief geologist. You see the budget, you see the strategy, and you’re working together as a leadership team to decide, “Do we want to take some more risk and go further in this country or do we want to stay in the US?”
You’ve seen a tremendous swing with the onset of horizontal drilling. Horizontal drilling and fracking is a labor intensive, investment intensive but at a lower risk. Once you’ve established a play that’s horizontally drilled, oil company leadership likes that because it’s repeatable. Generally, there’s more geology variation than people portrayed and we’re learning that. That changed the focus of a lot of companies. When I was in the international exploration game in the ’90s or early 2000s, that was a very popular target for companies for growth that we’re of decent size because there was marginally very little exploration in some prolific areas.
When you were working on the rig and you were looking at samples, I don’t think people understand very well that aren’t in the industry were those samples come from and how you got your hands on it.
As the drilling bit is going down through the Earth through hard rock into a basin that’s mature enough, deep enough and hot enough to generate oil and gas, you drill through a lot of layers and these rotary bits churn up tiny little samples that are about as big as your pinky fingernail or smaller. You’re looking under a microscope at these little chips or rock and you might have a trace of oil.
You’re also monitoring these rotary rig systems having contained a fluid system. There are fluids on the spinning drill bits and those fluids lift those cuttings up around the drilling to essentially spit out at the surface. People collect the samples, bring them in, the mud loggers, look at those, and we get that data. At the same time that fluid system has gas monitors all over it for safety reasons.
We look at that gas variation specifically what hydrocarbon contents are in it, and we see gas increases associated with productive oil and gas zone. These are the hardcore elements the rock, oil, and gas samples, the gas well drilling and the rate of penetration of the bit. If the bit hits some space in the rocket, it might drill faster. We call that a drilling break. After that, you’ll run wireline logs and those interpretations of density, resistivity, porosity and what saturation you think is in the rock, whether it’s water, gas or oil those are all key elements. That’s what the geologists bring. Then you marry that with the geophysical interpretation of seismic data.
The focus of geologists is the rock outcrops or where there’s well data with the hard data, rock data, oil and gas shows. The geophysics and the seismic strings that together to get a view of the whole basin if you spent the money to shoot seismic over the whole basin or a large area. Then you start seeing an image of the subsurface and we calibrate it with the rock data from the wells.
We then go on to make our maps of the joint effort and then we show the engineers. We have these traps. We think there’s this much oil and gas in place and the engineers typically take that and figure out the recovery system mechanism and the economics of the total project, not just a drilling a well. If you drill an exploration well, make a discovery and find this volume, is that going to be attractive economically?
I wanted to go through the detail because I think there’s a lot of confusion. People see a rig out there. They see a bunch of trucks around it and I don’t think they have any idea necessarily what goes on and how hard the work is in some of the places when you’re in a foreign country. It can be a multinational crew and living conditions can be interesting. In going from that, when you got the urging of one of your friends to write that down in your journal, you were thinking about writing this book, A World of Culture, Oil and Golf twenty plus years ago?
That’s correct.
Companies that are successful in international ventures put effort with the HR side to accommodate people and brief them what to expect.
When did you start writing this book?
I kept a journal for a number of years because I thought it was a good idea. As that volume started to grow, I thought this might be the content for a great book. I was lucky enough to travel a lot of business class, and I sat next to many very high powered executive types in various industries. We ended up talking about the concept, fiction, nonfiction, what should I focus on? I had a lot of years of evolving, but I finally decided to stop keeping a journal and start writing the book in 2010. I was working with a team and we were flying to Trinidad. We were going down there to look at a licensed round offered by the government, leases for sale.
We were evaluating those and whether the company was going to bid and decide to enter Trinidad or not. While we were flying over the Gulf of Mexico, I looked down and I said, “That’s Macondo.” If you don’t know in 2010, there was a well drilled and it blew out in the Gulf of Mexico called Macondo. BP was the operator that’s well-known publicly and spilled a lot of oil. It was disastrous for the entire industry because the government reacted harshly and constrained offshore drilling for a long time. A lot of people lost jobs while they figured out how to improve safety procedures and containment, which ended up being a good thing. There was a lot of involvement that way.
There I was flying at 35,000 feet. I looked down and I could see the rig and the drill ships around it. They were trying to drill relief wells to stop the flow of oil, which was still spilling into the Gulf of Mexico and I could see the sheen oil over the surface. I just thought, “I’m going to stop right now and write my book.” That was about 2010 and the book was published in November of 2016. I met a publisher and we found somebody to help me type up all the content. I eventually got a professional writer as a coauthor to change it from details of journal that nobody would care about into a flowing book that people would enjoy reading hopefully and so far, they have.
I think about the journey from all the travels and as you’re sitting out in the jungles of Guatemala, logging thoughts into your journal. I’ve got to imagine that your journals are rather interesting looking after all the trips and travels and locales. You still have all your journals?
We still have the original journals in a box somewhere for sure.
An insight what folks don’t know who haven’t looked in the book is the photos in there that you took along the way. Somewhere you were standing in some places that look sketchy.
Guatemala is a good one, which you brought up. We flew to Guatemala City in our own plane north towards the Tikal Mayan Ruins that people may know about, but it’s triple canopy jungle. We were making an exploration play for carbonate reservoirs, small structures over the northern parts of onshore Guatemala. That meant we flew in the small plane, about an hour, landed on a dirt strip, went down in trucks to a river, rode these longboats in another half hour up the river, got into another truck, and drove this location with a road that we carved into the jungle the company did. We were totally remote.
At that time, the leftist rebels were still fighting the government. We had a carved perimeter, barbwire security guards and everything. The rebels visited our location and they were heroes to the local people because they were fighting for their cause but that turned south, and the rebels took over the location while we were there. The regular army marched in 500 armies and they were patrolling the jungle after. The regular army were like Vietnam style there. I became...
