WOODGROUPS Darkest Hour

37.  1988 Breaking Pipers Heart

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In the summer of 1967, Texas oil billionaire, Armand Hammer finds himself seated in his office atop the Occidental building in Los Angeles, staring out of his window at the city skyline. Having acquired a controlling interest “Occidental Petroleum” in 1957, originally he bought the company to use as a tax write-off vehicle for other segments of his vast business empire which were losing money. During those early days, Occidental was a small drilling company working on behalf of other oil companies, lacking ownership of its own oil producing platforms. The oil downturn in the early 1960s hit hard, causing the company to bleed money, lose customers and face the looming threat of bankruptcy. Hammer's business model at the time was notably more entrepreneurial than contemporary drilling companies in the North Sea. He provided substantial funding for drilling activities himself, and was prepared to share the risks with his clients. He secured a significant revenue share of the oil extracted from these fields, if any of his drilled wells found oil. In a plot twist reminiscent of a Hollywood script, one of his rigs struck a massive oil seam in southern California, and this discovery propelled his company into the stratosphere of financial success. Building on that success, Hammer went on to acquire several more oil fields, making more major oil discoveries worldwide that eventually allowed him to enter the oil business as a major bona fide oil & gas production company. In 1965, Occidental had successfully secured exclusive exploration and drilling rights in Egypt, leaving the company with huge valuable oil reserves. However, as the 1970s progressed and the impending oil crisis loomed, the existing Egyptian government faced revolution and overthrow. Occidental found itself at risk of having its assets seized and nationalised by a potential new “military” dictatorship government. In anticipation of the revolution, Occidental negotiated a deal with the new Egyptian government to retain some of its assets and give significant revenue share to the new government. However, the terms too heavily favoured the Egyptian government, and the company struggled to break even. Armand Hammer sought an exit for Occidental in Egypt, and he believed that the North Sea could provide that solution. As the 70s progressed, he continually read about the huge oil finds by both Shell, BP and others, so he reached out to a contact in the British Foreign office whom he had dealt with in relation to his companies oil activities in Egypt. He was made aware there was still a huge area of UK offshore waters unexplored and 90% of the licences hadn’t been handed out yet. There were very few takers for UK exploration oil & gas licences at the time.

On this day in 1967, Armand Hammer called a meeting of his executive committee to find out who in his company was responsible for overlooking the potential oil & gas opportunities in the North Sea, Scotland—thousands of miles away. Ray Irani, heading his Executive Committee, appeared perplexed by the question, expressing his lack of knowledge about any oil boom in Scotland or elsewhere. He likened the situation to being asked why they hadn't purchased a lottery ticket with last week's winning numbers when he never knew there was a lottery draw. Irani was vaguely aware of the stories surrounding early oil discoveries in Scotland but had limited knowledge and no one had made any major finds. Armand slammed his fist on the table, accusing the board of not taking him seriously. The team briefly discussed it and argued that venturing into exploring and extracting oil from the North Sea was an impractical and a risky dreamland scheme. His board emphasised the high uncertainties, the possibility of fruitless exploration for months or even years, as had been going on there already, and that the industry lacked existing technology to extract oil found in those challenging waters. However, Armand remained adamant. He was reading monthly about new oil discoveries in the North Sea and he wanted a part of it. He believed his own “useless” executives had missed a golden opportunity to acquire licences that could have been exploited or traded. Despite his Excoms (Executive Committee) initial objections, he was determined to pursue the potential of the North Sea. As the meeting concluded, he promptly instructed his assistant to secure ten seats on a flight to Aberdeen, Scotland, departing exactly one week later. Providing a list of the ten names requiring tickets, he informed them of their upcoming trip, emphasising the need for their availability. The team was split over two separate aircraft to reach the UK. The first flight landed in London, where the group caught an internal flight to Aberdeen. Stepping off the plane, they were greeted by the cold and rainy environment, with temperatures around 10 degrees. The second flight, arriving a day later, was diverted to Glasgow due to fog at Aberdeen. Group two then took a train from Queen Street Station in Glasgow to Aberdeen. Armand was well-connected and armed with a clear plan as he embarked on a series of crucial meetings in London, with his first stop the energy arm of the UK Government, followed by discussions with representatives of Shell, including their CEO, Mr. Jonkheer. Detailed conversations focused on the challenges and costs associated with Shell's activities, which had merely amounted to exploration at that point. He also had a meeting with Neville Gass, the chairman of British Petroleum. In the oil industry of that era, direct competition between companies was limited, except during the bidding process for exploration licences. Collaborative efforts were common due to the substantial costs involved, with most operators unwilling to undertake major offshore oil & gas projects without the support of several other major oil companies to share the financial burden. No oil company in the North Sea owned 100% of their oil finds. Hammer aimed to negotiate a deal with the UK Foreign Office to acquire acreage in the UK Continental Shelf without charge, citing his significant loss of investments in Egypt, which had been under British rule and law at the time. His investments were ultimately erased by the revolution which had overthrown the government in Egypt, and Hammer felt the British government should compensate him for his loss. Fortunately for him, the British Government agreed to issue exploration licences to him free of cost. Returning to the U.S., Hammer now owned a substantial number of exploration blocks and licences in the Central and Northern North Sea oil basins of Scotland. The next steps involved recruiting partners with deep pockets necessary for financing the ambitious exploration venture.

Two years later, Armand Hammer was preparing to bring his company ships and equipment to the UK to commence exploration. Occidental Petroleum committed an unprecedented exploration budget of £33 million. Hammer, without finalised financial agreements with partners, had initiated discussions with potential collaborators but had yet to sell a stake in the exploration venture, or find a willing buyer. Convinced, Hammer decided to take the gamble, exploring alone and would seek a business partner after making the discovery he hoped his company would make. This strategy made the investment more attractive for potential partners if oil had been found, but they would face a far higher cost of entry for much less equity once reserves were found and proven. After eight months at sea and multiple unsuccessful exploration wells, and having spent a huge £12 million without tangible results, Hammer grew concerned. 

Things appeared to get worse on June 8, 1972. At one drilling site, a malfunction occurred as the drill string dropped and began spinning freely at an unexpectedly faster rate, damaging the entire drill rig setup. They halted to investigate the damaged equipment, fearing drill pipes had snapped, and they would need to identify the broken drill pipe link and recover it and it could add months to the drilling program. Approximately three minutes after halting the drilling, the offshore crew observed oil on the rock shavings being forced up from the lower part of the drilled well. The geologist had a huge smile on his face. Soon, liquid oil began slowly seeping through the well deck and onto the platform. Instructions were given to seal the well and for some rock and oil samples be recovered and sent for testing. The drill rig was moved to another location over 3 km away to drill additional wells. They ran a repeat formation test on the samples recovered from each well drilled. The geologist in Aberdeen made a call to the home of Armand Hammer on the 26th of July 1972, as he dialled the number, his heart was pounding. The caller was struggling to speak. Armand answered and told the caller “It's 4.00am and I’m in bed” call back later, and Hammer hung up the phone. The geologist called straight back. The caller said: Mr Hammer, I am John Thomas, your representative in the UK as part of the exploration program in Aberdeen Scotland, and we have some news. He told his boss that the exploration well drilled in the block 15/17n exploration block has confirmed an oil find approx 130 miles to the East of Aberdeen, and there could be as much as 2 to 5 billion barrels of oil in it. Armand took a deep breath and sat on his bed for a moment. He told the caller to not advise a single person outside the close-knit team on the ground and he would convene his team in the morning. He punched the air and went to bed but couldn’t sleep a wink. Just before he hung up Hammer said to his engineer, you can have as long as you want to create the report, as long as it’s in my hands in 3 days' time. The official report came through confirming a 30 square kilometre oilfield reservoir, with identical consistent oil discovered throughout each of the wells drilled confirming it was all part of one giant reservoir. Occidental had just discovered the third largest oilfield ever found in European Waters. And thus, the Piper Alpha story was born.  

Occidental enlisted the richest man in the world oil & gas Titan, John Paul Getty of Getty oil and several other business partners to establish OPCAL, a joint contracting organisation aimed at financing the colossal project from construction to operation. Under the agreement, Occidental would oversee the construction and operation of the oilfield, with a monumental £1.5 billion investment, equivalent to £11 billion in today's currency (2025) with a three-year oil rig construction program led by McDermott International at Ardersier. Along with building the platform itself, the project also involved an extensive 36-well drilling campaign synchronised to conclude as the built platform reached completion and commissioning. The newly christened platforms were integrated into an extensive system of oil platforms and terminals. This intricate setup included two twin platforms, Claymore and Tartan, and the solitary producer, Piper Alpha, positioned approximately 22 miles apart and linked by a huge 32-inch pipeline transporting oil onshore for processing. 

Piper Alpha commenced oil production in 1976, less than four years after drilling the first exploration well. Boasting a staggeringly impressive production rate of 280,000 barrels of oil per day, Piper Alpha claimed the title of the world's largest single-platform installation by production volume. By 1980, it was generating a staggering $3.6 billion in annual revenue, solidifying its position as the crown jewel in Occidental's portfolio. The initial years of production proceeded smoothly, benefiting from fresh infrastructure and minimal maintenance requirements. However, as the mid-1980s approached, Piper Alpha's safety record came under scrutiny. In 1982, a bridge link platform connecting the accommodation module and production platform collapsed, resulting in the tragic deaths of three workers. Strathclyde Process Engineering and Occidental faced a meagre fine of $25,000. Nonetheless, this incident prompted the establishment of an offshore safety committee on the platform, one of the earliest initiatives of its kind in the North Sea. Despite these efforts, Piper Alpha continued to experience safety issues, including the explosion of a gas compressor which fortunately saw no casualties, but was a very near miss. Restlessness among the offshore workers on the Piper Alpha grew, fueled by rumours suggesting that the platform was unsafe. In an attempt to allay concerns, a union representative was dispatched offshore to reassure the workers about the platform's safety. A meeting ensued between the workers, Occidental, and the union. When the union requested a copy of the incident report detailing the gas compressor explosion failure investigation, Occidental refused to provide it. It became apparent the safety committee's authority was limited when it came to questions that might impact Piper's substantial production figures or involve information on safety Occidental was unwilling to disclose.

The evening of the 5th of July 1988 was a beautiful, warm summer's evening. Ian arrived home from work as usual and as he walked in the door, he saw his wife, Helen, had packed his bags ready for a trip Ian was making to the United States the next day. She laid the bags beside the door downstairs so they would be ready for him in the morning, and he wouldn’t make a noise in the house and wake the kids as he left. Helen placed his passport on top of his bag. She sat down in the living room and told Ian to clean up the mess he had left in the kitchen after making a ham sandwich. Ian said he just needed to nip upstairs and make a business phone call first but would come back down and clean up shortly. He didn’t come back down and stayed on a long phone call to one of his overseas group companies in Houston. By the time he did come back downstairs, his wife, Helen, had already cleaned up his mess as she usually did. On the mantelpiece sat a wedding invitation to his niece's wedding which was to take place in 9 day’s time. His wife reminded him that under no circumstances could he stay longer in the United States than his allotted time, and that he had to be back in time for the wedding. On the bed upstairs Helen had laid out 3 beautiful dresses for herself with matching hats and intended to choose one to wear to the wedding. She asked Ian for an opinion, he did not overly engage, and he told her they all looked lovely and that anyone of them was fine. Ian wouldn’t have missed his niece's wedding for anything and assured his wife he would be back in plenty of time. The pair headed to bed, Ian set his alarm for 4.30am for a 7.15am flight departure to London. Ian got up and headed to the airport, but was advised there was a flight delay and that he should go home and return to the airport around 2.00pm that afternoon for the flight departing at 5.00pm. There were more flight delays and Ian was asked to return to the airport the next morning at 6.00am. Arriving at the airport around 4:00 am once again, Ian found himself in the airport shop where his eye caught a later edition newspaper with a brief tiny article about an incident on Piper Alpha. Ian decided to call his office late to inquire about the incident and find out what was happening. The response provided a detailed account of a massive explosion on the Piper Alpha platform hinting at potential mass casualties. Instantly abandoning the idea of travelling to the United States, he instead headed to the Wood Group offices. His primary concern was trying to ascertain whether any of his employees had been injured, or worse. After making numerous calls, the situation became clearer as news reports flooded in. Distraught and with his mind far from work, Ian headed home. He turned on the news, to see pictures of helicopters circling the Piper platform with huge flames visible engulfing the structure. With nearly 60 Wood Group employees offshore on Piper Alpha, Ian was consumed by concern for each one of them. The news showed survivors returning, revealing horrific burns suffered by many. The injured were swiftly transferred to Aberdeen Royal Infirmary. First-hand accounts of survivors jumping into the water to escape the heat added to the shocking narrative. The city of Aberdeen was left in shock as the last survivors returned to Aberdeen by helicopter.

In the ensuing days and weeks, the true magnitude of the disaster unfolded, dominating headlines on all UK and International news channels for an extended period. On that fateful day, Ian lost 39 of his employees, while another 22 Wood Group employees survived. Ian took on the difficult task of visiting the homes of families of those who lost loved ones in the disaster. Each time he approached a door, he grappled with an overwhelming sense of personal guilt. When visiting the families of the deceased, Ian secretly crossed his fingers behind his back and hoped that there were children present in the home. Despite the heart-wrenching conversations, Ian found conversations were somewhat more manageable and measured when children were in the room. Generally, the relatives treated him with more understanding than he had anticipated. During his initial visits, there persisted a collective shock and an underlying anger had not yet surfaced. While it was evident that neither his company nor his employees had any role in the tragic events that unfolded, the stark reality was that with each door opened and every grieving family he faced, Ian couldn't shake a profound and bitter sense of personal shame. Recovery from the Piper Alpha disaster was a lengthy process for Ian, the memories of those who experienced it, especially those who lost loved ones, will never fade. Shortly after the tragedy, Ian did attend his niece's wedding. However he had little recollection of his presence, and he holds few personal memories of the event. 

Following the disaster which claimed 167 lives, Occidental petroleum provided very modest interim payments to the families of those who lost loved ones. Accusations were levelled against the company, claiming they exploited the media to gain favourable PR amid the tragedy. Shortly after the incident, a false set of stories circulated, suggesting that the families of the Piper Alpha victims had reached a favourable and generous compensation agreement. This was untrue, Occidental were doing everything in their power not to pay compensation. The stories and mis-information had been discussed in the Aberdeenshire media by Occidental's Chief Executive, John Brading, who was dispatched to handle matters in Scotland, sparing CEO, Armand Hammer, from appearing himself. In response to Occidental's poor treatment of the fallen’s loved ones, the families of the victims formed a group to take Occidental petroleum to court. Occidental's apparent compensation payment delay tactics prompted legal representative David Burnside, an Aberdeen Advocate representing 136 widows and 49 survivors, to inform the media that none in his group had settled, or received any payment from Occidental, and that they had been lying to the media claiming otherwise. Occidental consistently asserted their desire for an out-of-court settlement to prevent their manager's incompetence from being laid bare in a courtroom. They had planned to secure the out of court settlements before Christmas of 1988, however no agreement could be reached. 

Wood Group organised a private memorial service in Aberdeen for the company’s victims and their families. Held at Holburn West Church in Aberdeen, the event provided an opportunity for those who couldn't bear the public services of the preceding week, to mourn away from the world's media scrutiny. Approximately 700 mourners attended the event, where Ian delivered a reading.

 "It is said that everyone remembers the place and moment in time when they learnt of the assassination of President Kennedy - so Piper Alpha will become for all of us and many, many more throughout the country. It is a time of great sorrow and in varying degrees, our lives will never be the same again. The consistent theme in the tributes from the Queen, other members of the Royal Family, the Prime Minister and many others throughout the land has been the great debt of gratitude we owe to the dedicated professionals - the engineers, technicians, tradesmen and roustabouts - who, over the last 20 years, have greatly enhanced our quality of life by challenging the elements in and under the North Sea.

As their employer, we remember their skills, their real interest and pride in their work, their respect for the harsh and difficult offshore environment and their quiet courage and con­fidence in themselves and their capabilities. Those who knew them better tell of their great love for their families, their pleasure and enjoyment in their two weeks onshore, their willingness to help others - in many cases the old and less fortunate - during their time off, their pint and game of dominoes in the pub, their love of sports and their enjoyment in the companionship of each other. Additionally, I have had the privilege of getting to know the men by visiting and talking with their families, and their immense inner strength and courage have, for me, been the greatest testament to the quality and character of the men lost. We are proud of the men of Piper Alpha and shall always remember them with profound respect and admiration. But we pay tribute not just to these men, but to the courage and bravery of their families and hope and pray that they can build on these qualities, and on the strength of their family love, for the difficult times ahead. We also pay tribute to the wider family circle, to the neigh­bours and to the many friends who are providing comfort and support as the backbone of the community healing spirit, which will, hopefully, provide the bridge to the future.

We are also thankful for the safety and recovery of our survivors, many of whom in spite of their own physical and mental anguish, have visited and spent time with the bereaved families and in so doing have been able to help both them and themselves. With so many distressed and hurt families, Piper Alpha cannot, for others, be a time of self-pity. And finally, I would like to thank the many Wood Group personnel, our Piper Alpha back-to-back team, some of our other offshore staff and our onshore support team, who have self­lessly and caringly tried to do the little we can to help over the past very distressing weeks.

I said at the beginning, "none of us will ever be the same again." The Wood Group has not just lost 39 employees - a part of the company has gone - but we have 2500 employees and many businesses to run, and we must now resume that responsibility.

However, our top priority will be participation with utmost diligence and urgency in the disaster investigation to ensure such an accident must never happen again.

But in looking ahead, we are so conscious that for many the future looks bleak and despairing without the husband or father or son or brother that was so much an integral part of their life and themselves. We wanted to have this Company Memorial Service, not just to have the opportunity to remember these men, but to acknowledge publicly the great debt we owed them and to give their families the opportunity of meeting and talking to other families they may have known through their menfolk, and in so doing, perhaps achieve some comfort from sharing the pain and the hurt. I see this day in different measures for us all, as 'the end of the beginning.' May God give you the strength and understanding to come to terms with your loss and grief over a period of time and begin to look ahead again.

Our thoughts and prayers will be with you."

Andrew Wylie, in his Memorial Service tribute, spoke of ordinary men working in an extraordinary environment, but the combined accomplishment of these ordinary men is extraordinary. Worldwide one of the greatest technology achievements this Century - to produce oil & gas from under the North Sea and provide the energy for our homes, our hospitals and for the thousand and one utilities that we take so much for granted in our comfortable lives onshore. In this context, and in the knowledge that every man is extraordinary to his own family and friends, we remember and pay tribute to 39 extraordinary men.

In the aftermath of Piper Alpha, Ray Craig was employed to investigate specific aspects of the disaster. However, he faced the challenge of little in the way of guidance and it became obvious those on the main panel leading the Investigation lacked a clear understanding and were ill-equipped to determine its course. Lord Cullen, lacking oil & gas industry experience, struggled to grasp the technical testimony and its implications. Despite these challenges, a public inquiry lasting 13 months yielded 106 safety recommendations. Among the significant changes recommended was the transfer of oil & gas platform safety from the Department of Energy to the Health and Safety Executive (HSE). This move mandated the preparation of safety cases for all oil & gas Platforms, a concept we now take for granted.

After prolonging the process, Occidental eventually did provide some compensation to the survivors and families affected by the Piper Alpha disaster. Following the disaster, Occidental promptly placed all its oil & gas Assets in the UK and Europe up for sale. The Piper Alpha and its assets were eventually sold to France's national oil operator, Elf Petroleum, in the early 1990s. Despite compensation, some survivors persisted in their pursuit of justice and fair compensation, deeming the payouts received inadequate. Unfortunately, their efforts ultimately proved unsuccessful. The most glaring injustice of the Piper Alpha disaster lies not in Occidental's extraction of over $50 billion in revenue from operating in the North Sea, but that not a single executive, manager, director, or CEO faced charges or prosecution for the preventable deaths of 167 men.

Piper Alpha undoubtedly marked Ian and Wood Group's darkest hour, leaving a profound impact on Ian and most of Aberdeen. In the months following the tragedy, amid an industry still grappling with heightened safety concerns, Ian, alongside colleague, Phil Ley, flew to Marathon's Brae Bravo platform to present the offshore team with recognition for achieving 600 days without a lost-time safety incident. Ian's intention was clear: he wanted to show that he wasn't just a company owner paying lip service to those risking their lives offshore. Instead, he deeply understood the safety gravity of offshore life and was willing to stand at the forefront to address it. Together with Offshore Platform Installation Manager, Derek Blackwood, Ian delivered a presentation to Wood Group employees outlining the ongoing efforts to enhance the safety of the platforms. Before the presentation, Ian personally inspected all 58 modules spread over 10 deck levels on the offshore platform. As the return helicopter flight faced delays, Ian found himself in the offshore departure lounge around 6:00pm. Realising he would miss a dinner party at home, he felt a deep sense of guilt, knowing his wife would be left entertaining a group of strangers. Boarding the helicopter later that evening, after being awake for over 30 hours, Ian, surrounded by sleeping passengers, pulled out a pile of paperwork. Undeterred by the noisy helicopter environment, he worked diligently under the small reading light above his head for the next three hours until the noisy, bumpy flight landed.

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