Fifty years of BLACK GOLD
Five decades ago, BP struck oil in the North Sea, triggering an epic multi-billion industrial boom in Scotland. And this Mail writer was there when the very first jam jar of crude was brought ashore...
It’s given to few to be present at the making of history. And history was the last thing on my mind that evening in October 1970 exactly a week after I’d moved to Aberdeen to join Grampian tV as a news reporter.
I was leaving the office for the day when Bill Mackie, the deputy news chief, stuck his head round the door. ‘Fancy grabbing a taxi and heading out to Dyce airfield?’
A British Petroleum spokesman would be arriving in a helicopter from something called an oil rig drilling in the North sea, and there was to be an announcement.
More experienced colleagues had gone for the day and Bill clearly did not think it was important enough to justify overtime for a film crew.
When the cab reached the ramshackle group of Portakabins around the singlestorey terminal building that was later to become Aberdeen International Airport there were already about a dozen journalists milling around – local journos representing the main scottish media as well as a handful of Fleet street hacks flown up specially for the announcement.
Even this rookie could tell something bigger than expected was afoot.
soon we heard the thump, thump of an incoming helicopter rotor. As the chopper landed and we gathered round, a burly character wearing a hard hat, checked shirt and Us Red Wing workboots clambered down. With all the flourish of a magician pulling a rabbit from his hat he produced a pickle jar containing what looked like flat Guinness. ‘this, gentlemen, is North sea oil,’ he declared.
the first indication of oil under the North sea had been somewhat less dramatic. Dated October 7, 1970, BP’s press release ran to three paragraphs and mostly talked about where the rig was drilling and the depth it was drilling in (350ft).
However, it did contain the crucial words ‘indications of hydrocarbons have been found’.
But bad weather halted helicopter traffic to and from the drilling rig and it wasn’t until the following Monday evening, October 13, that the first sample of the black stuff was landed.
By next morning the dramatic news of oil under the sea bed 110 miles off the scottish coast had flashed around the world and Aberdonians were waking up to the prospect of their Granite City becoming a boom town.
StICklERs ERs will claim that the he first oil strike ke in the Uk sector ctor of the North sea ea had actually been made by Amoco, nearly y a year earlier. But for r ‘com‘ commercial reasons’ ns’ the Chicago-based d company chose not to announce what hat was the much smaller ler Montrose strike.
BP, with close links to the Uk Government rnment and rumours already driving up its s share price, did not have the luxury of secrecy. cy. As it turned out, the he Forties field, named after the he long Forties Bank, well known wn to North sea trawlermen, was as the biggestever oil discovery in Uk waters. Within weeks imported lincoln Continentals and Chevrolets were purring up Union street and grizzled veterans from the texan and Oklahoma oilfields were giving the red light bars along the dockside a new lease of life.
‘ Fit l i ke’ and t he l ocal response ‘ Aye chavvin’ were being replaced by ‘Howdy’ and ‘Mighty fine’ as oil patch wannabes from all over the NorthEast adopted American accents and deserted their trades as electricians, carpenters and plumbers for the more glamorous work offshore.
It became nigh impossible to find a local tradesman as they and thousands of workers from all over the Uk were drawn by the megabucks to train as roughnecks and roustabouts.
Virtually overnight, Dyce became Europe’s biggest heliport, transporting workers to and from the semi-submersible rigs miles out in the North sea. Discovery followed discovery from waters off Dundee all the way north to shetland. Prices for office space in Aberdeen soared as oil and service companies vied for the most prestigious addresses.
BP and shell built giant complexes on opposite sides of the city. Us majors like texaco, Conoco and Occidental, along with Elf and total from France, and Italy’s Agip joined dozens of ‘Indies’ and international drilling and service companies like Halliburton, Baker and Weatherfield. American stores selling everything from popcorn and ‘ bloody mary- mix’ to t o mahawk steaks appeared. An American s c hool was quickly followed by a Us-style country club.
I interviewed an American toolpusher, or rig boss, at the time and asked how he was enjoying life in Aberdeen. ‘Aberdeen, that where we are?’ he drawled. ‘seems just like Houston to me. ’Cept for the weather weather.’ ’ But senior oilfield execs and their families were also transferring from the Us to the leafy suburbs along Aberdeen’s Deeside, to places l i ke Bieldside, Cults and Milltimber. ‘It’s like waking up and finding yourself in heaven,’ a company vice-president enthused in one tV interview. ‘I get out of bed in the morning and there are deer at the bottom of my garden and salmon jumping in the river. I’m never gonna leave.’ Meanwhile, tradit i onal Aberdeen companies were beginning to recognise the new business opportunities. A young psychology graduate from the University of Aberdeen
had recently taken the reins of his family fishing business.
I’d known Ian Wood as a highly competitive second row rugby forward. Now, I found myself renewing acquaintances on a business mission to the Offshore Technology Conference in the world oil capital, Houston, Texas.
From the outset Wood recognised that unless Scottish businesses learned ‘downhole’ oilfield technology they would be left with a service role which would disappear whenever the oil started to run out. He argued that Scottish engineering companies had to learn the sub-sea technology being pioneered in the North Sea, which was every bit as innovative as that being developed for the space race at the time.
Nowhere else in the world was oil being produced from such depths or in such hostile conditions. It was happening on our doorstep and we had to be part of it. Soon the oilfield business spun off from his family’s fishing firm had opened offices in Houston and was buying US companies with the ‘downhole’ expertise he sought.
Half a century later the Wood Group is a major international oil player and Sir Ian is Scotland’s wealthiest individual with a personal fortune of £2billion. Not bad for a guy whose original ambition was to be a psychology professor.
BUT it’s sad that so few others i n the Scottish busi ness c o mmunity seemed able to follow his advice or example. Indeed, in the early days the rest of Scotland scarcely seemed to notice what was going on around Aberdeen.
The local wealth created had allowed Grampian TV, the commercial station serving the North and East of Scotland, to punch above its weight at the network table, and I was cutting my teeth as a documentary producer telling ITV viewers throughout Britain the way the winds of industrial change were blowing in Scotland.
About that time, Andrew Neil, a perceptive young business journalist, wrote a piece for the Economist titled ‘Eastward Ho, Westward Woe’, which argued that the industrial heart of Scotland was moving North and East away from Clydeside.
The rest of Britain, concerned with looming industrial strife, neither seemed to know nor care. The historian Chris Harvie wrote ‘the impact of oil on the metropolitan intelligentsia was practically zero’, despite the country having ‘seen no greater construction project since navvies built 500 miles of railway in the late 1840s’.
With the nation suffering under Prime Minister Jim Callaghan’s winter of discontent, US Secretary of State Henry Kissinger told President Ford that ‘Britain is a tragedy. It has sunk to begging, borrowing and stealing until North Sea Oil comes in’. The Forties field had actually started pumping oil in 1975 but the North Sea was nowhere near full production when Margaret Thatcher came to power four years later. But the Iron Lady was quick to recognise the potential of oil revenues in the new future she planned for Britain.
In her first year in office the oil take was only £565million, but the f ollowing year r evenues had increased to £2.3billion. By the tax year 1984-85 they had risen to a staggering £12billion –more than 10 per cent of the UK economy at the time.
The Thatcher revolution would have been unsustainable without oil revenues to pay for the benefits and welfare bills brought on by the miners’ strike and unemployment.
In truth the defeat of the unions, the champagne-swilling Big Bang City traders, the reclaiming of the Falklands and the peace and plenty of late-period Thatcherism owed more to oil money than ideology.
Nationalism and oil are tradit i onal bedfellows, as events as far apart as the Middle East and
Mexico bear witness.
‘ It’s Scotland’s Oil’ was the new slogan for the revitalised Scottish National Party, previously the political home for poets, poseurs and assorted kilted eccentrics. Norway, with its population of four million and nearly as much oil as the UK, became the role model for those now demanding an independent Scotland.
The fact no one had suggested that the gasfields discovered off East Anglia a decade earlier were exclusively English didn’t faze the Nats. Nor the inconvenient truth that if you continued the slanting Bor d e r between Scotland and England out into the North Sea, the Forties and all fields to its south were arguably in English waters.
Shetlanders, who had little truck with nationalism, argued that if an accident of geography in the North Sea made it Scotland’s oil, surely those who wanted to remain part of Britain were entitled to claim it as Shetland’s oil.
After losing the 2014 independence referendum the SNP had to face the embarrassing truth that their budget for an independent Scotland, worked out on an oil price of over $100 a barrel, was an economic laughing- stock. By 2020 it had slumped below $30.
AS ‘ wildcatters’ had been discovering since 1901 in Texas when the giant Spindletop strike ushered in the modern energy age, oil is a fickle mistress, with prices constantly fluctuating.
It made millionaires such as John D Rockefeller, HL Hunt and Paul Getty, all of whom were the richest men in the world in their day. But it bankrupted many and brought misery to others, with regimechange, wars and revolutions.
There were also major catastrophes like the Piper Alpha Disaster,
the explosion on BP’s Deepwater Horizon platform off the Gulf of Mexico and the Alaskan ecological disaster caused by the Exxon Valdez tanker spill.
A decade ago, with production falling, BP sold the jewel in its crown, the Forties Field, to a Houston independent, Apache, for $812million. At its peak the field had produced 500,000 barrels a day, more than any other North Sea discovery. It must have been galling for BP when Apache, with advanced seismology and updated drilling techniques, found another 800million barrels in the field, extending its l i f e by more than 20 years.
On a personal note, oil played a key part in my career. Promoted to Grampian’s head of news and current affairs, I negotiated a coproduction with NRK, the Norwegian state broadcaster, to make a definitive TV series, not just about North Sea oil, but world oil. Channel Four’s Jeremy Isaacs came up with the funding and Bjorn Nilssen, my NRK coproducer and I, embarked on a three-year global odyssey to tell the TV story of the world’s biggest business.
In eight hour-long episodes we told how the story started in Scotland, where James es ‘Paraffin’ Young pioneered d the technique of producing g oil from shale. In 1868 his Addiewell refinery in West Lothian was the biggest in the world.
We also revealed Scotland’s role in a secret plan to ‘ fix’ the world oil price when the bosses of the seven major oil companies, the socalled Seven Sisters, gathered at Achnacarry Castle, clan seat of the Camerons, in the autumn of 1928. Ostensibly they were there to shoot grouse, but their real purpose was to set the maximum price ‘the sisters’ would pay the n new Middle East producers for their oil. Arguably, that decision set the pattern for the West’s worsening relations with the
Middle East for the next century. Entitled simply OIL, the series was a critical and financial success, selling in 50 countries.
I would go on to produce many more films, among them documentaries about the environment, alternative energy, fisheries, and the Gaelic diaspora. There would be travel to more exotic film locations, a belated career in politics and later still a university degree (studied for, non- honorary!). But I firmly believe little of this would have come to pass had I gone home a few minutes earlier on that Monday evening in October 1970. The Mexicans have a saying: ‘The Devil gave us oil’. The Brahan Seer predicted that Scotland’s tribulations would begin with the coming of the black water. I prefer to believe that the nation’s greatest gift of nature in the last century came from a benevolent deity with the best interests of the whole of Britain at heart.
And I still can’t thank Bill Mackie enough for sending me out to greet the guy with the bottle of flat Guinness all those years ago.