Sniffer Technology

It is one of the oldest axioms in the oil industry: there is no way to be sure whether an exploration prospect contains oil without actually drilling it.

In the early 1990s a group of industry entrepreneurs approached an oil company in London. They claimed to have developed new technology that could detect an oil field remotely, without drilling it.

The technology was in a plain wooden box installed in an old but airworthy plane. The box had no features except a big red oil light on the outside.

The technology was proprietary and secret. The entrepreneurs could say only that it sniffed the air and subjected the sample to a chemical analysis. The light came on to indicate the presence of crude oil.

The company accepted their offer of a demonstration.

So the plane took off with the entrepreneurs and observers from the oil company, and flew across the producing fields in the North Sea. Every time they went over an oil field, the red light came on.

The company agreed to buy the technology, all the intellectual property rights, and the plane itself, for $12 million.

When the company’s own experts examined the box, they found nothing inside at all except a battery, some wires and a hidden switch, which enabled the oil light to be turned on and off manually.

The $12 million was written off, the sniffer plane languished for a couple of years in a hangar in Aberdeen, and the whole affair was swept under the carpet.



Chris Thorpe

Chris Thorpe is a respected independent lawyer in the upstream oil and gas industry, and an established lecturer and author. Chris has a LLB in law from Magdalene College, Cambridge and trained as a barrister in London. He worked for eight years' as an in-house lawyer for BP and Marathon. Since 1991, Chris has run his own upstream legal practice, CPTL, which has acted for many upstream clients. He has extensive experience of international upstream transactions, principally in the North Sea, the FSU, Africa and the Middle East. Chris has spoken at many UK and International Conferences and Seminars, both public and in-house. His most popular current lecture is Fundamental of Upstream Petroleum Agreements, a two-day course with accompanying book.