Calgary-based firm WesternZagros Resources Ltd. discovers homegrown roots in Iraq

An Alberta firm revives exploration in the Kurdish cradle of Middle East oil

By Gordon Jaremko

June 01, 2009

Oil is a big industry but can feel like a small town. Just ask Simon Hatfield, who encountered startling personal and professional roots halfway around the world from his firm’s Calgary headquarters.

As president of WesternZagros Resources Ltd., Hatfield is leading a drilling campaign near the site of the first Middle East oil well. He and the pioneer desert black gold hunter, William Knox D’Arcy, are from the same hometown of Newton Abbot in the Devon area of southwestern England.

In 1902-04, D’Arcy drilled two wells at a remote spot called Chiah Surkh in the Kurdistan region of Iraq. Oil flowed, but technical problems robbed him of a gusher. Just enough was produced to arouse tantalizing visions of great wealth beneath the sands.

D’Arcy nearly went broke. But his pioneer wells proved that surface oil seeps in the Middle East, as at the 1850s founding discoveries of the North American industry in Ontario and Pennsylvania, marked the spots to drill for buried treasure.

A richer firm took over D’Arcy’s mineral concession, made him a director and followed the oil seep trail into a future part of Iran that its Persian inhabitants called Maidan Naftoon or Plain of Petroleum. A 1908 gusher launched great fortunes that eventually grew up into British Petroleum and the Organization of Petroleum Exporting Countries.

The old British and modern Alberta forays into the Middle East also have Australian pedigrees in common. D’Arcy made the money he put into oil drilling in an 1880s Queensland gold rush. Hatfield’s WesternZagros is descended from a 1990s Australian mining venture into Alberta’s bitumen belt by Broken Hill Proprietary Co. of Melbourne.

BHP joined the Athabasca Oil Sands Project led by Shell Canada but dropped out before construction started. Transplanted Australian mining experts stayed in Alberta to team up with entrepreneur Guy Turcotte, form Western Oil Sands Inc. and scoop up BHP’s abandoned 20 per cent share in the Fort McMurray mega-mine.

WesternZagros emerged as a byproduct of a US$5.5-billion takeover of Western by Marathon Oil Corp. two years ago. Hatfield’s firm started as a prospecting asset acquired to diversify Western’s interests beyond exclusive reliance on the oil sands.

Shares in the spinoff only began trading on the Toronto Stock Exchange in the autumn of 2007. Drilling is still in early “wildcat” exploration stages in the Middle Eastern mountain and foothills region that Hatfield’s firm is named after.

But WesternZagros already affirmed a lesson taught by D’Arcy’s example. It takes staying power to make a mark on the international oil scene. Hatfield learned patience as a roving geologist working in more than 50 countries since he started his career in the North Sea during the 1970s.

Pages: 1 2

Issue Contents