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A Key to the Arctic’s Oil Riches Lies Hidden in Ohio

A Key to the Arctic’s Oil Riches Lies Hidden in Ohio


Joe Balash, the Interior Department official overseeing the leasing efforts, told reporters in December that the potential oil riches should attract plenty of interest despite the enduring mystery surrounding the well — a site known as a “tight hole,” an industry term for wells with confidential findings.

“In the oil and gas industry, there’s secrets and then there’s secrets,” Mr. Balash said. “This is the tightest hole, I think, that has ever been drilled.”

A year after the exploratory well was completed, a fleet of lawyers descended upon the Cuyahoga County Courthouse in Cleveland. BP, which already held a minority stake in Standard Oil of Ohio, had offered $7.4 billion to buy the rest of it, and the lawyers were there to lodge claims that Standard Oil’s shareholders were being shortchanged.

The deal and the ensuing litigation led to a legal spectacle, with lawyers, executives and bankers shuttling from London to New York, often on Concorde jetliners, and then on to Cleveland and California. The case generated financial headlines around the world.

Eager to distinguish himself from the other lawyers, Mr. Silverman seized on the lack of detail in BP’s offer about what had been found at the test well, known as KIC-1. In a filing, he and his team suggested that the omission had led to a significant shortfall in the value of the deal.

Soon after, BP’s lawyers let Mr. Silverman question Mr. Jenkins, the oil executive. The proceeding was unusually secretive. No copies were made of the transcript, and the original is said to have been stored in a safe at a law firm representing BP.

Mr. Jenkins, who is 80, lives near London and still works in the oil industry, said he had found a notation about the meeting in his 1987 appointment book. He did not remember details of the KIC-1 findings, he said, but recalled that “there wasn’t anything in that well that was particularly encouraging.”



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