Colombia 

59 blocks for bids in oil auction

(Reuters) – Colombia will have 59 blocks on offer in its next round of oil bidding, the national hydrocarbons agency (ANH) said, as the country steps up efforts to encourage more investment in the sector.

The ANH debuted the blocks, located throughout the Andean country but concentrated near its northern Caribbean coast and in its eastern plains, during a private event with oil companies.

Six companies won 11 contracts in an oil round earlier this year, which the ANH said would generate some $500 million in investment.

“The offer of blocks in this second auction is aimed towards ensuring energy self-sufficiency in Colombia, increasing reserves and generating critical resources to maintain fiscal and trade balances,” the statement said.

Five of the blocks are off-shore and 27 of them are areas which have been requested by already pre-qualified companies, the first time that mechanism has been available.

Nine of the areas were included in the previous auction while thirteen of the new areas have gas production potential. A final list of qualified bidders will be published on Oct. 21 and companies will deposit initial offers on Oct. 31.

GeoPark oil discovery in Llanos 34 block

GeoPark, a leading independent Latin American oil and gas explorer, operator and consolidator with operations and growth platforms in Colombia, Peru, Argentina, Brazil, Chile and Ecuador, announced the discovery of the Guaco oil field in the Llanos 34 block (GeoPark operated, 45% WI) in Colombia.

GeoPark drilled and completed the Guaco-1 exploration well located along the third and most western major fault trend in the Llanos 34 block. This is the first oil discovery along this trend and potentially opens up a new play. The well was drilled to a total depth of 11,936 feet. Similar to other Llanos 34 fields, it appears to be both a structural and stratigraphic trap. Oil shows during drilling and petrophysical analysis indicated the potential for hydrocarbons in both the Guadalupe and Mirador formations.

A production test conducted with an electric submersible pump in the Guadalupe formation resulted in a production rate of approx. 960 barrels of oil per day, 24.6 degrees API, 0.3% water cut, through a choke of 35/64 inches and wellhead pressure of 50 pounds per square inch.

Additional production history will determine the stabilized flow rates of the well. Further appraisal and development drilling will determine the extent of the field. Surface facilities are in place and the well is already in production. The Guaco discovery represents the fourteenth oil field discovered and put into production by GeoPark since acquiring Llanos 34, an exploration block with zero production in 2012.

James F. Park, CEO of GeoPark, said: ‘Congratulations to GeoPark’s oil-finding team for continuing to look out beyond the prolific already-discovered producing oil fields and formations to search for and discover new opportunities. This result underscores the exciting potential still remaining in the Llanos Basin and the attractiveness of GeoPark’s recently-acquired exploration blocks surrounding Llanos 34.’

Source: GeoPark

Amerisur Resources reserves update

Amerisur Resources, the oil and gas producer and explorer focused onshore Colombia, provided a reserves update for its production assets as at 31 July 2019 covering the Company’s Indico and Mariposa fields (together CPO-5) and Platanillo field.

Reserves Update Summary

• The independent reserves report was completed by McDaniel and Associates Consultants, a leading independent oil and gas industry expert
• Undertaken as part of the ongoing Formal Sales Process
• Total Company reserves estimated to be 15.04 MMBO 1P, 21.80 MMBO 2P and 31.13 MMBO 3P (as at 31 July 2019), with 1.2 mmboe produced in 2019 to end July
• CPO-5 2P reserves estimated to be 9.5 MMBO (as at 31 July 2019)
  • • Increased to reflect production history that indicates larger oil in place and higher recovery factors
    • Further drilling activity on CPO-5 is scheduled for H2 2019, commencing with the Indico-2 appraisal well. The 30-day well is planned to increase production and reserves with the potential to extend the Oil Water Contact
    • Production started from the Indico discovery in the CPO-5 block in January
    • 2019 Working Interest Production to end July of 0.43 MMBO
• Platanillo 2P reserves estimated to be 12.3 MMBO (as at 31 July 2019)
  • • Lower to reflect a more conservative approach to economics late in the life of the field
    • Working Interest Production to end July of 0.78 MMBO

Strategic Review and Formal Sale Process (‘FSP’)

• Multiple parties participating in the FSP following the signing of confidentiality agreements
• Management presentations with interested parties currently being held in Bogotá

John Wardle, CEO said: ‘We are pleased to complete the update to our reserves and transition the review of our full portfolio to McDaniel and Associates. We have had feedback from participants in the FSP that they value the new independent assessment from McDaniel. The report highlights the near-term value of the Company’s CPO-5 asset.’

Key Reserves and Resources data

Table 1 – A summary of the Reserves attributed to Amerisur’s assets as at end July 2019

McDaniel’s independent reserves report undertaken using standards set by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers, certified 1P (Proven) working interest field reserves were 15.04 MMBO, 2P (Proven and Probable) working interest reserves were 21.80 MMBO and 3P (Proven, Probable and Possible) working interest reserves were 31.13 MMBO.

Standard: These assessments are made in accordance with the standard defined in the SPE/WPC Petroleum Resources Management System (2007).

Source: Amerisur Resources

Ecopetrol deploys subsea exploration drones off La Guajira peninsula

Ecopetrol will employ unmanned underwater gliders to navigate an extensive area of the Caribbean Sea to acquire information on physical-chemical variables of the ocean.

These underwater drones will be responsible for oceanographic and geochemical exploration at sea to support the search for hydrocarbons and generation of knowledge of the marine environment. The drones will be put into operation between August and December, the most favorable weather conditions for sailing in the vicinity of the La Guajira peninsula.

Since their appearance in early 2000, these unmanned systems have opened up new possibilities for ocean observation and monitoring. They have allowed data to be collected for weeks or months, such as measurement of currents, temperature, salinity, pressure, concentrations of components such as dissolved oxygen, dissolved organic matter and chlorophyll, over large areas and at significant depths of the water column.

The variables analyzed are important when drilling at sea, as they contribute to identify and reduce risks in oil operations. They also allow the detection of natural oil leaks, which are indicators of areas with high potential and perform acoustic monitoring during seismic operations. Four drones, two in operation and two in relief, will sail in an area of 10,000 km2 in a water column up to 1000 meters deep.

SPEC LNG Expands

Shailaja A. Lakshmi September 17, 2019

The additional services planned to be provided directly from the FSRU Höegh Grace include, among others, cool down of conventional LNG carriers and reloading of small LNG cargoes for onward distribution throughout Latin America and the Caribbean.

Jose Castro, General Manager of SPEC LNG, said, “Due to SPEC´s strategic location and capabilities, this collaborative agreement will enable us to play a key role in the development of the LNG industry in Latin America and the Caribbean, including small-scale LNG.

According to Alfredo Chamat, General Manager Calamari LNG S.A. E.S.P: “For Calamari LNG is a pleasure to be part of this Joint Agreement with important players of the LNG market. Cartagena provides the best access to the Caribbean for which we expect to attend all markets that have requirements for small scale LNG.”

Sveinung Stohle, CEO and President of Höegh LNG and Board Member of Avenir, said: “I am very pleased with this agreement as it confirms Höegh LNG’s strategy to leverage its FSRU platform to offer jointly with its customers and Avenir additional revenue generating services to the LNG market.”

Andrew Pickering, Chief Executive Officer of Avenir LNG Limited, said that this Joint Development Agreement reflects one of the main strategic principles of connecting Avenir LNG’s distribution capabilities with large scale FSRU reload economics.

Vopak stake in LNG import facility

Dutch tank storage company Vopak acquired 49 percent shareholding in Sociedad Portuaria el Cayao (SPEC) in Cartagena, Colombia, the country’s only LNG import facility operating since 2016. The LNG import facility consists of an LNG jetty, onshore infrastructure and a 9.2 km gas pipeline which connects SPEC to the national gas grid.

PEC chartered Höegh LNG’s FSRU Höegh Grace that has the capacity to transport 170,000-cbm of LNG and has a regasification capacity of 500 mmscf/d. The FSRU contract is for twenty years, but includes options for SPEC to reduce the term to five, ten or fifteen years. SPEC holds long term contracts with three local gas-fired power plants.

Eelco Hoekstra, chairman and CEO of Royal Vopak, said, “This is another growth step in our LNG portfolio and it fits very well in our ambitions to grow and diversify our service offering in LNG.”

Following the acquisition, the shareholders in SPEC are Promigas (51 percent) and Royal Vopak (49 percent).

Shearwater GeoServices wins first Isometrix survey

Shearwater GeoServices announced the award of a 3D Isometrix seismic survey by Ecopetrol. It will be the first Isometrix survey in Latin America with marine acquisition starting in Q4 2019.

The survey covers 2,000 sq. km of 3D seismic offshore Colombia on Ecopetrol’s Block COL-5 in the Caribbean. It will acquired by the SW Amundsen equipped with Isometrix multisensor streamer technology.

Isometrix streamer technology is a true 3D multisensor system that can record the full seismic wavefield enabling better receiver deghosting and improved seismic images. The survey is expected to take 1.5 months to complete.

‘We continue to deliver on our strategy to expand our presence in Latin America. A cornerstone of that strategy is to leverage Shearwater’s unique technology such as our market-leading multisensor streamer solution,‘ said Irene Waage Basili, the CEO of Shearwater GeoServices. ‘We are very pleased with the award by Ecopetrol which will be our first survey in Colombia, the first project for a new leading regional customer, and the first-ever Latin American Isometrix project.’

Ecopetrol expects that the Block COL-5 will yield ‘additional gas reserves for the market’ in the medium term in exploration acreage over 399,426 hectares.

Shearwater experiences increased activity in Latin America and established a new Colombian branch to support this coming operation. This follows the recent opening of a branch office in Brazil to support Shearwater’s growth in the region.

Shearwater GeoServices Holding AS is a global, customer-focused and technology-driven provider of marine geophysical services. The company has the world’s largest fleet of high-end seismic vessels and a portfolio of proprietary technologies and software that provide customers with a full-range of geophysical acquisition techniques, effective surveys and high-quality data. Shearwater has approximately 600 employees, an industry-leading cost position and a strong balance sheet. Headquartered in Bergen, Norway, Shearwater is owned by Rasmussengruppen AS, GC Rieber Shipping ASA and Schlumberger.

Panama

Rosneft trades Venezuelan Oil
Bloomberg — Buyers of Venezuelan crude at the office near PDVSA headquarters in Caracas now visit Rosneft Oil Co PJSC in Panama City Three oil traders, two of whom are ex-employees of PDVSA, helped Rosneft to handle 70% of Venezuela oil exports in August. Rosneft has a more active role in trading Venezuelan oil after the U.S. tightened sanctions earlier this year against the OPEC founder nation in a bid to oust President Maduro. As China National Petroleum Corp. subsidiary PetroChina Co. Ltd., the main importer of Venezuelan crude prior to sanctions, halted loadings in August and September, Rosneft was allocated larger shares of Venezuelan crude, with Cuba and PDVSA’ subsidiary Nynas AB, which owns refineries in Europe.

PDVSA and Rosneft have been partners in oil-producing ventures in Venezuela. Since 2014 Rosneft has loaned about $6.5 billion to PDVSA in exchange for oil. After initial delays, PDVSA caught up with payments and reduced the outstanding debt to $1.1 billion in the second quarter. The crude loaded as payment is resold to refiners in China and India. Rosneft-backed Nayara Energy Ltd., based in Mumbai, adjusted its diet to take more Venezuelan barrels.
PDVSA’ trading staff are from the Housing Ministry, former home of Manuel Quevedo, oil minister and PDVSA president. Most PDVSA traders do not speak English, the language of oil business worldwide. Many struggle with common-place concepts such as arbitrage and freight rates. Phone calls and emails go unanswered.

Rosneft is following the law because all oil contracts, including those of loading crude oil or delivering gasoline, were signed prior to sanctions. Threats of imposing sanctions on Rosneft while the U.S. allows American companies to operate with PDVSA under waivers are seen as “unfair competition aimed at gaining advantages by American companies in the global oil market.”

Robbers Raid Tanker off Venezuela

Armed robbers boarded an anchored tanker at the Jose Terminal Anchorage in Venezuela on March 28, according to IMB Piracy Reporting Centre.

As reported by IMB, five robbers armed with knives and a pipe wrench boarded the tanker and tied up the aft watch keeper.

The robbers subsequently broke into the ship’s paint store, the IMB notice said. Once the alarm was raised and crew mustered, the robbers escaped with stolen ship’s stores.

This is the second robber attack on commercial ships to take place at the same anchorage within seven days. The first one occured on March 21 and saw three robbers board a crude oil tanker. The perpetrators threatened a crew member with a knife and stole his radio before escaping.

US deploys troops to provide humanitarian aid

Working with Colombia, Brazil and other regional partners the USA plans to crush Venezuela’s economy to force President Maduro to step down and install Juan Guaido.

US troops now virtually surround Venezuela. With US allies Brazil to the south and Colombia to the west, Maduro is under more pressure as citizens suffer in dire poverty. As influence of PRC and Russia grows, the deployment of US air force for the first time in a decade will strengthen the relationship with Guyana. New Horizons humanitarian outreach is a stepping stone towards a prolonged relationship with the Guyana military forces. The deployment for 4 months is led by the US Air Force The US also wants to counter the increasing totalitarian influence in the area.

As the major investor, US wants close ties with Guyana and its military.

The US Air Force said , “Guyana sits is in a strategic location on the north edge of South America and on the Caribbean. That’s what makes it important. Also, as political change happens in the nation and they become more aligned with us, it’s important for us to make those personal relationships not only through the embassy, but also through the military and the Guyana defense force, which is currently about 3,000 strong with the intent to nearly double it in the upcoming years.”

US troops will also serve as an insurance policy if conflicts arise in the area. They could help create another front if the US decided to intervene militarily in Venezuela. It warned about the increasing presence of PRC and Russia in South America. Guyana uses Huawei communications networks. Both Russia and China are heavily invested in bauxite mines for aluminium.

US supporting attempted coup

In January of this year Juan Guaido, leader of the Venezuelan opposition declared himself president and claimed that Maduro’s reelection as president was illegitimate. He was immediately backed by the US and most of its allies including Canada. US opponents China and Russia side with Maduro as does Turkey.

Conditions for a military intervention. are more favorable.

With Guyana secured, the US military surrounds Venezuela with personnel in Colombia and Brazil bordering Venezuela. The groundwork for a military intervention is being set; it is only a matter of time before an invasion.

US Sanctions Vessels for Venezuela Ties

Four more companies and four tankers have been sanctioned by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) for moving Venezuelan oil to Cuba.

The U.S. Treasury said that the latest measures include Cyprus-headquartered Caroil Transport Marine, and the three vessels that the company operates, as well as the Panama-based Trocana World Inc., Tovase Development Corp and Bluelane Overseas SA, the registered owner of the fourth blocked vessel.

OFAC said that the chemical and products tankers Carlota C, Sandino, and Petion, as well as the crude oil tanker Giralt, recently transported oil and other petroleum products from Venezuela to Cuba.

“The United States continues to take strong action against the former illegitimate Maduro regime and the malign foreign actors who support it. Maduro’s Cuban benefactors provide a lifeline to the regime and enable its repressive security and intelligence apparatus,” Steven T. Mnuchin, Treasury Secretary, said.

Since the January 28, 2019 designation of Venezuela’s state-owned oil company Petroleos de Venezuela, S.A. (PdVSA), Cubametales, the Cuban state-run oil import and export company, and other Cuba-based entities have continued to circumvent sanctions by receiving oil shipments from Venezuela, OFAC explained.

On July 3, 2019, OFAC designated Cubametales for operating in the oil sector of the Venezuelan economy pursuant to E.O. 13850, as amended.

Venezuela lacks vessels to ship its oil as sanctions bite

(Bloomberg) – Shortage of vessels willing to transport crude oil produced by the regime of President Nicolas Maduro for export is a new concern: for sanctioned Venezuela. Shipowners are avoiding transporting Venezuelan oil for fear of being sanctioned and losing insurance coverage on their vessels. The lack of vessels may take a toll on oil exports which was already at a 16-year low in August.

At least one cargo of Venezuelan oil was deferred to October as the buyer could not find a vessel to load. Unable to find supertankers to carry its oil to Asia, the OPEC producer is resorting to smaller, costlier vessels to deliver overseas.

U.S. President Donald Trump signed an Aug. 5 order authorizing sanctions on anyone helping the Maduro regime amid a humanitarian crisis that ousted 4 million Venezuelans. The Shipowners’ Club, provider of insurance to international shipping companies, advised members to “exercise caution” if engaging with Venezuela. If a member is sanctioned, its property can be blocked and the club may terminate or suspend insurance coverage.

Chavistas Sign Deal with Small Group, Will Return to Parliament

CARACAS – The Venezuelan regime and a minority opposition group announced they had reached an agreement that includes the return of the more than 50 ruling-party lawmakers to the parliament and the formation of a new electoral council.

The document was presented by Communication and Information Minister Jorge Rodriguez, Vice President Delcy Rodriguez and opposition lawmaker Timoteo Zambrano – leader of the Cambiemos party, which holds six of the opposition’s 109 seats in the National Assembly. Zambrano was accompanied by former presidential candidate Claudio Fermin, the leader of the Movimiento al Socialismo party Felipe Mujica and representatives of the Bandera Roja and Avanzada Progresista parties.

Although the AP has two seats in the legislature, at least one of its lawmakers, Julio Cesar Reyes, did not agree with his party’s decision.

The announcement of this renewed dialogue came less than 24 hours after the speaker of the assembly, Juan Guaido – who is recognized by over 50 countries as Venezuela’s interim president –, announced the official end of the Norway-backed talks with the Maduro, regime, 40 days after the latter walked away from them.

According to Zambrano, who was in charge of presenting the agreement reached with the regime, the talks between this opposition minority and the regime had been underway for two or three months, during which negotiations were also held with Guaido’s representatives. The agreement states that the more than 50 members of the Chavista coalition will return “immediately” to the parliament, almost three years after they left the legislature to form part of the National Constituent Assembly, a parallel legislature made up entirely of pro-government members.

A new National Electoral Council will be formed soon, as the current one has been constantly questioned and accused of pro-government bias by the opposition.
The document also provides for the release of political prisoners.
In order to address the country’s humanitarian crisis – the United Nations claim one in four Venezuelans are in dire need of humanitarian assistance –, the agreement will promote the trade of oil for food, medicine and services. Details of the agreement were announced at the Venezuelan foreign ministry before members of the diplomatic bodies accredited in the South American country.

Diplomatic sources explained that the ambassadors of European Union countries withdrew from the event after learning what it was about, as the European nations are in favor of the peace talks promoted by Oslo.
Maduro, after the signing of the deal with the opposition group, said that doors were open to resuming the Barbados talks in a consensual manner.

“The Bolivarian forces will be there negotiating and understanding,” Maduro said. “All the doors are open! ”

Guaido expressed his rejection of this announcement and proposed to instead convene a Governing Council “with all sectors,” including the armed forces, to address the severe political and economic crisis that the nation has been facing since January.

Cuba Confident of Winning Foreign Investment despite Fuel Crisis

HAVANA – Cuba hopes to attract more foreign investment at its biggest trade event, the 2019 Havana International Fair (FIHAV), to be held in November despite the fuel crisis that affects transportation and the activities of companies and citizens.

“The circumstances are very difficult,” the director general of foreign investment at the Foreign Trade Ministry, Deborah Rivas, said during the presentation of the 4th Business Forum, which will form part of the 37th Havana International Fair, scheduled between Nov. 3-8.

Despite the adversities, she believes the Forum “will continue to attract foreign capital,” something the Cuban government considers fundamental to keeping its fragile economy afloat, and to “increase its contacts with companies” interested in investing in Cuba, especially in the Mariel Special Development Zone (ZEDM). The ZEDM, a major project for attracting investment, has already approved 48 businesses, of which 25 are in operation, according to the director of the Single Window System of the project, Wendy Miranda.

Cuba faces its worst energy crisis since the 1990s, now that shipments of diesel from Venezuela have been partially curtailed, something the Cuban government attributes to the escalation of the US embargo and the restrictions placed by the Trump administration on Venezuelan petroleum.

After the last diesel tanker docked at the island, and no more will arrive until October, which has led to restrictions on transport and industrial production in the country, besides arousing fears of possible electricity blackouts. The government says, however, that this is a temporary situation that will be resolved next month.

The director general of foreign investment sent a calming message to current and potential investors in Cuba, assuring them that they will have every guarantee that their projects on the island are not at risk and invited them to take advantage of the business opportunities offered at the Havana International Fair. FIHAV last year attracted 2,500 business owners and executives from over 50 countries, with Spain the foreign country with the largest representation. ZEDM generated investments worth $474 million, a record amount. over the previous 12 months.

16 Sep 2019

T Boone Pickens dies aged 91

(Bloomberg) – T. Boone Pickens, a colourful figure for decades in the energy business, died aged 91. The Texas oil wildcatter turned corporate raider became a billionaire energy investor and television pitchman for wind and natural-gas power. He was still mentally strong but in declining health, “I clearly am in the fourth quarter.”             –        The oilman

He sold his 65,000 acre (26,305 hectares) Mesa Vista Ranch in the Texas Panhandle and closed his hedge fund, to invest in “personal passions like promoting unbridled entrepreneurship and philanthropic and political endeavors.”

New Approach

Though he achieved much of his fame for takeover bids in the 1970s and 1980s, Pickens earned much of his wealth in the energy futures market after turning 75 in 2003, through his Dallas-based BP Capital LLC by correctly betting on rising prices for oil and natural gas.

Forbes magazine estimated that his net worth doubled in 2005, to $1.5 billion, and doubled again to $3 billion in 2007. The last estimate of his wealth — $950 million, in 2013 — reflected losses from the 2008 financial crisis, philanthropy (including about $500 million to Oklahoma State University, his alma mater) and investments in wind energy, part of his plan to end U.S. dependence on Middle East oil.

From his base in Texas, Pickens and his Mesa Petroleum Co., one of the largest independent U.S. producers of oil and gas, made a splash on Wall Street in the 1980s with its attempted corporate takeovers, assisted by figures such as mergers-and-acquisitions lawyer Joseph Flom and banker Alan “Ace” Greenberg at Bear Stearns Cos.

‘Pirate’ Tycoon

It was“cheaper to look for oil on the floor of the New York Stock Exchange than in the ground.” His tactics earned him millions, even when he failed to gain control of the companies he chased.

 Time magazine cover story in 1985 said Pickens “has swept up like a twister out of Amarillo, Texas, to become one of the most famous and controversial businessmen in the U.S. today.” Some oil company executives urged Congress to stop him. “He’s nothing but a pirate,” G.C. Richardson, a retired executive of Cities Service Co., one of Pickens’s targets, told Time.

Pickens had no aspirations for acceptance in the world of chief executives he derided as the “Good Ol’ Boys.”

Shareholder Association

He mocked the “excesses” of corporate America — “The biggest hurdle in American corporations is the CEO’s ego,” he wrote — and insisted his takeover bids were, at root, attempts to get shareholders the best return on their investment. He created the United Shareholders Association in 1986 to represent the interests of small investors.

Mesa’s bid for Gulf Oil Corp. in 1983 and 1984 spurred the largest corporate merger in history at the time, Standard Oil Co.’s $13.2 billion buyout of Gulf to form Chevron Corp.

As Robert Slater wrote in his 1999 book, “The Titans of Takeover,” the deal made Pickens “a hero to Wall Street” because shareholders earned an estimated $6.5 billion from the run-up of Gulf’s share price, while Merrill Lynch, Morgan Stanley and Salomon Brothers shared $63 million in fees. Pickens and his partners enjoyed a profit of $760 million.

By the mid-1990s, the tables had turned. With Mesa, mired in debt, Pickens sold a controlling interest to Texas financier Richard Rainwater in 1996 and soon had to step aside as CEO and chairman. Down but not out, he proved himself an adept hedge-fund trader, betting correctly on price moves of natural gas and crude oil.

“I hope people think of me as a visionary who recognized it was important to show a new look periodically,” Pickens said, according to a 2018 New York Times story. “Predictability leads to failure.”

Republican Support

An active supporter of Republican politicians and causes, he gave $4.6 million to advocacy groups in the 2004 presidential election, including $2 million to Swift Boat Veterans for Truth, which attacked the military record of Democratic presidential nominee John Kerry, a decorated veteran of the Vietnam War.

Pickens supported Donald Trump during his presidential campaign in 2016 because the real estate magnate “was the only one who was going to change anything” among Republicans who ran for the nomination, Pickens said “Now, you may not like the change you get, but you’re getting ready to have change. And I’m a change advocate.”

Pickens spent about $100 million since 2008 on his Pickens Plan, a grassroots campaign that called for building wind farms and an improved electric grid, offering incentives for energy efficiency and expanding use of natural gas-powered vehicles. That created an alliance with Democrats.

Shifting Alliance

“Here is a man who was my mortal enemy,” Senate Majority Leader Harry Reid, Democrat of Nevada, said in 2008. “He’s my pal now.”

Pickens insisted there was nothing discordant in an oilman seeking less reliance on oil. When it comes to energy, “I’m pro-everything.”

Thomas Boone Pickens Jr. was born May 22, 1928, in Holdenville, Oklahoma, a cow town near the Greater Seminole oil field, which had been discovered a year earlier.

He was called “T-Bone” by his father, also named Thomas Boone Pickens, who went by Tom. He was “Boone” to his mother, the former Grace Molonson, who ran the local Office of Price Administration, rationing gasoline and other goods. The family’s roots in England intersected with those of Daniel Boone.

Pickens said he first grew a business when he expanded his newspaper-delivery route from 28 houses to 156.

Geology

His father, a lawyer by training and an avid gambler, worked in the oil business, buying and selling drilling leases. After losing money as a wildcatter in the late 1930s, he moved the family to Amarillo, Texas, where Pickens attended high school. He went to Texas A&M on a basketball scholarship and planned to become a veterinarian. An injury ended his scholarship after his freshman year, and he transferred to Oklahoma A&M at Stillwater, where he studied geology, as his father wished.

Graduating in 1951, he worked three years for Phillips Petroleum Co. There, he noticed waste and inefficiency that would inspire bids to force oil companies to maximize value for shareholders.

Mesa Petroleum

He quit Phillips in 1954 and two years later opened Petroleum Exploration Inc. Two investors put in $1,250 each for half the shares, and established a $100,000 line of credit. Pickens renamed the company Mesa Petroleum and took it public in 1964. By 1968, revenue had grown to $6.2 million with profits of $1.4 million, and by 1970, Pickens was a multimillionaire, he wrote in his 2008 memoir, “The First Billion is the Hardest: Reflections on a Life of Comebacks.”

Mesa sought companies Pickens believed were inefficient and undervalued, no matter their size.

In 1982, it targeted Tulsa, Oklahoma-based Cities Service. In a faceoff of M&A heavyweights, Pickens was advised by Flom, a founding partner of Skadden, Arps, Slate, Meagher & Flom, while Cities Service was backed by Bruce Wasserstein and lawyer Martin Lipton, at Wachtell Lipton Rosen & Katz.

Cities Service accepted a white-knight offer from Gulf Oil, which bought out Mesa’s stake for $55 a share — giving Mesa a profit of $31.5 million.

Gulf

Pickens began targeting Gulf, the fifth-largest U.S. oil company, in 1983, when its share price was $38. Pickens’s partnership, Gulf Investors Group, worked with Greenberg at Bear Stearns to accumulate shares. Pickens met 200 financial analysts and money managers to assure them he was serious about a takeover and wouldn’t strike a separate deal with Gulf.

“It was pouring rain outside,” Slater wrote of the meeting, “but the crowd couldn’t stay away and miss the unusual chance to see what this man was like — this man with the strange name, with the great derring-do, this man who had sent chills running down the backs of the Wall Street community.”

In the friendly takeover of Gulf, Standard Oil paid $80 a share. Pickens and his partners had paid an average of $43 per share in building their 9 percent stake.

Pickens took another consolation prize in 1984, when Phillips — his onetime employer — fended off his takeover bid by buying back his stock, giving him a profit of $89 million.

Acquisitions

In changing Mesa to a master limited partnership in 1985, Pickens put an emphasis on returning capital to stockholders, committing the firm to annual cash distributions of $1.50 to $2 a unit through 1990. The structure let him issue new Mesa units to finance acquisitions, such as the 1986 purchase of natural-gas company Pioneer Corp. When the price of gas dropped, those guaranteed distributions became “a killer,” Pickens later said.

Pickens found himself on the target end of a hostile takeover attempt led by former Mesa President David Batchelder. (Batchelder, co-founder of Relational Investors LLC, told the San Diego Union-Tribune that he left Mesa in 1988 because Pickens “started taking himself too seriously and lost his ability to have fun.”) After Mesa’s share price fell below $3, Pickens turned to Rainwater as a white-knight investor but was forced out of the company he ran for 40 years.

BP Capital

With five former Mesa employees, Pickens opened BP Capital in 1996 to trade energy futures. His BP Capital Energy Fund began trading stocks and futures in 2001, with $84 million from investors.

Betting correctly on rising crude oil prices, he tripled the money in that fund in the first nine months of 2004. In 2005, the fund made $1.3 billion — a 248 percent profit, after fees — on oil futures and natural-gas trades.

“You’ve got plenty of oil, but light sweet is in short supply,” he said in September 2004 , explaining why he believed there would continue to be unmet demand. “The Chinese want light sweet. We want light sweet.”

Crude oil futures had topped $49 a barrel, the highest in the 21-year history of the contract. By July 2008, when the price peaked at about $147 a barrel, Pickens was a billionaire. Then prices plunged in the second half of 2008, a turn that cost his fund more than $1 billion in losses.

He admitted to miscalculating. “It’s my toughest run in 10 years,” Pickens said,. “We missed the turn in the market. There’s nothing fun about it.”

Crude Crash

Six years later, crude prices crashed again, creating the oil industry’s worst financial crisis in a generation. Pickens responded by selling out all of his oil holdings, choosing instead to wait for a better time to return. In 2016, federal filings showed that his BP Capital Fund Advisers LLC took new stakes in a handful of the pipeline owners that ship crude to market.

Along with his investments in oil, Pickens built business plans on water, wind and natural gas. His plan for a $10 billion, 4,000-megawatt wind farm fell victim to the financial collapse of 2008 and the declining natural-gas prices that accompanied it.

On the New York Stock Exchange, his legacy continues. NYSE Pickens Oil Response ETF, a spinoff of the wildcatter’s shuttered BP Capital, began trading in early 2018 under the ticker “BOON.” The equity index fund includes energy explorers and producers, oil-services companies, refiners and renewables companies that are closely correlated to the Brent crude oil price.