The "oil patch" - that cutthroat and lucrative world of American Crude - has never been governed by the rules of gentlemantly conduct, but rising prices have brought a new levell of intrigue and skulduggery to the patch.
Thefts, bribery, corporate esplonage and budding black markets are increasingly cited by the oil industry and law enforcement officials as methods by which the demand for equipment, technical information and business deals is being met.
In one of the two most stunning allegations to be made recently, Mobil Oil in a lawsuitttt has accused Superior Oil of an unprecedented "raid" in "wholesale lots" of key Mobil experts - hiring them away and using their knowledge to outmaneuver Mobil and win two oil tracts in the Gulf of Mexico that Mobil wanted.
In the other, a former draftsman here with the Union Oil Co. of California last week admitted that, for a fee plus royalties, he sold secret Union information to a local Oil man and a Michigan oil company. They allegedly one-upped Union on obtaining oil leases in Mississippi - and then brazenly offered Union a chance to join in the drilling.
In other recent instances, everything but the well hole itself was stolen overnight. Even crude itself gore - as in West Texas where a man was accused of making off with his booty in a truck nomally used for pumping out septic tanks.
At the same time, federal probers in several states continue major investigations into possible illicit oil sales used to disguise price increases that violate federal regulations.
On Friday Continental Oil and two other firms agreed to pay more than $3 million in fines and rebates on charges of selling petroleum products above prices set by the U.S. govenment in 1973-74. Earlier last week, a former Conoco executive was fined on related charges.
Many of the culprits in the widespread stealing of oil equipment have been identifled as knowledgeable roustabouts, roughnecks and toolpushers. But, as the Conoco case illustrates, wrongdoing has also extended to the executive suite. Takes, for example, the cases of people like the $1.2 million-a-year executive accused in a contract bribery scheme and large oil companies accused of wrongdoing in the drive for contracts, information, oil and, in the end, more money.
In the contract bribery case, the nation's foremost offshore drilling rig company, J. Ray McDermott, last spring admitted bribing a Tenneco Oil executive with $508,615 for a contract covering Tenneco's needs in the Gulf. The McDermott company forfeited more than $800,000 in profits it had reaped from the scheme.
While Tenneco was being victimized by McDermott's bribes, Tenneco itself, according to a federal indictment, was bribing a Louisiana sheriff. Tenneco's $2,000-a-month checks were being mailed out to the sheriff precisely at the same time McDermott was delivering cash bundlea overseas to the Tenneco executive.
On a different level, two armed and masked man held up a remote Arkansas drilling crew and escaped in a pick-up with all of the rig's drill bits; a Louisiana man was almost set afire when he tried to steal the "Christmas tree" of valves from a producing gas well and it ignited, and a man in South Texas lost his truck and its load of oilfield pipe while he stopped for coffee.
So it seems that no one in the oil patch is immune, and that many are tempted. And in the colorful, confusing and high stakes world of oil, the players may even be in simultaneous roles, victim and perpetrator.
Industry representatives and lawmen generally agree that oil patch crime took off about 18 to 24 months ago, just as higher prices were beginning tospur more and more drilling. Oil and gas drilling is now at its highest level in 20 years, and that increase has brought shortages of equipment, long deliveries, and higher prices for what is available.
"There's always a thievin' problem when there is a shortage," says Baker Littlefield, a drilling contractor who organized a reward fund to combat an estimated $10 million a year in thefts around Lafayette, La.
Six months ago, Littlefield lost $100,000 in equipment that eventually was recovered by a highway patrolman who stopped to help a heavily loaded pickup that had run out of gas.
"It's gotten worse," moans Earle Clark, who compiles a monthly report of stolen equipment for the Texas Mid-Continent Oil and Gas Association. He says the stealing of oil field equipment continues to rise and notes that his latest report includes 5,000 feet of 27/8-inch oil well sucker rods stolen recently from Bakersfield, Calif.
Tens of millions of dollars in stolen equipment passes yearly through this capital city of the oil patch, so much so that two years ago the Houston police department set up a special detail to deal with the problem.Stolen stuff comes in to be fenced through used equipment dealers, junkyards, rental companies, whatever. Stolen stuff goes out - to Louisiana, Oklahoma, Mexico, West Texas, the West Coast, even overseas.
It is a circuitous market, and it happens that a company ends up buying back its own equipment as stolen goods.
A $5,000 valve may bring $500 or more depending on the market, says Lt. J. B. Bradley of the Houston Police department. Bradley says his squad has recovered millions of dollars in stolen equipment and he expects to go to a grand jury soon with a major case.
Bradley says, however, that his detectives were not so fortunate in another case. A convicted thief drove into town with $60,000 in what Bradley said was clearly stolen equipment. But officers were unable to trace its ownership (many companies keep no records of serial numbers on supplies) and so the suspect was freed to leave town with his merchandise.
All of this has complicated a historically competitive industry where oilmen have never been reluctant to hire local "oil scouts" to spy on the opposition and where immediate departure replaces two weeks' notice for certain employees who announce their resignations.
Oaths of secrecy are as common in the oil patch as they are in espionage agencies. After all, it is a world where information, technical expertise and luck are what find crude oil.
One company maintains a virtual "war room" with zoom-in maps that show every well in the world that is known to have been drilled. One participant compares it to watching "Mission: Impossible," as first a map of a continent, then a country, then a province, then a locality, and finally an oil field fill a 20-foot screen. The company's diligence in rounding up information paid off with an early lead in the North Sea.
Two other companies pioneered an advanced seismic technology that gave them an advantage in an offshore leasing sale - but it listed only for one use because the competition figured out what happened.
Mobil's suit against Superior Oil has provided a rare public glimpse at the competitive and secret would of hunting for gas and oil, particularly in the bidding for offshore leases. There, the goal is to outbid competitors just enough to win but not to overdo it and waste money.
Mobil claims that, while it was responding to the energy crisis by developing equipment and procedures to locate possible oil "plays," or discoveries, Supperior Oil's president and chief stockholder, H. B. Keck, was allowing his company to fall "into a state of disorganization."
Mobil claimed that Keck and other Superior officers then conspired to rebuild Superior by stealing "in wholesale lots key people with unique talents who possess trade secrets."
First eight and then 28. More employes left Mobil for superior, the suit claims - people who were knowledgeable about Mobil's bidding strategy, its offshore lease sales simulated on a computer and its calculations leading to a decision on how much to bid on a 5,760-acre tract.
Two Mobil employes cited in the suit left Mobil on Dec. 12, 1976, and Feb. 11, 1977, after, according to Mobil, they had worked on an offshore lease sale. On June 23, 1977, Mobil said, it lost "by the narrowest of margins" two tracts to a competing bidding group that included Superior. The two employes, according to the suit, had worked on bidding of both companies.
"But for the unethical and illegal conduct of the defendants . . .Mobil would have been the successful bidder on these two tracts," the suit claims. Futher, Mobil claimed the former employes had worked for Mobil in preparation of yet another upcoming offshore lease sale.
Superior has denied that it acted improperly and has called the Mobil suit an attempt to keep Mobil employes from seeking opportunity elsewhere in an industry where job-hoping is common - yet feared inmany cases by management.
A hearing on the suit is set for state district court here in September.