The professional spies called “scouts” in oil circles have been as legendary in the petroleum industry as the Leduc discovery. Their capers have become a part of western folklore, whether they’re bellying up to a drilling rig to train their binoculars on the work in progress, eavesdropping in bars or bartering for data. But those colorful, freewheeling loners are taking a backseat this year as competing oil companies and their splendidly paid executives head for the courts to argue out who is stealing whose secrets. In the
latest case, Calgary executives during the past six weeks have been nervously following the unfolding battle between Chevron Standard Limited and Home Oil Company. At issue is the services of geologist John Leeson, age 51, a softspoken Scot, who worked 23 years for Chevron in geological, administrative and management jobs. In December, 1976, Leeson met William Waddell, Home Oil’s exploration vice-president, over an innocent lunch to discuss petroleum-industry donations for improvements to the Calgary Zoo. The talk drifted into Home Oil’s search for a Canadian exploration manager and a month later Leeson had the $47,500-ayear job.
Two years later both Leeson and his new employer are in court fighting a lawsuit brought by Chevron, which alleges Leeson had access to and wrongfully disclosed Chevron trade secrets and confidential information after joining Home. Specifically, Chevron contends that it had been searching for deep oil in Alberta’s West Pembina basin for two years prior to Leeson’s departure—and that Leeson, in effect, tipped Home off to the area’s vast potential. Chevron claims Home had no play under way there until Leeson’s prodding induced Home to send a scout to follow Chevron’s drilling and, shortly afterward, persuaded Texaco Exploration Canada Ltd. to enter into a joint drilling arrangement on Texaco-owned land adjacent to the Chevron play. This, according to Chevron, was all the more annoying because it had been negotiating a similar deal with Texaco. The Chevron wells (drilled by Nairb Petroleums Ltd.) have since yielded oil in what has become Western Canada’s biggest conventional oil find in a dec-
ade, with 400 million barrels in the field, while Home itself subsequently made two oil discoveries in the area as well. Leeson’s response to these claims by Chevron, is “nonsense,” saying he didn’t have such information and that Home became involved in West Pembina on the basis of normal and legitimate industry sources.
This case—to be decided early in the new year—is reminiscent of a similar lawsuit earlier this year when Mobil Oil Canada Ltd. sued Canadian Superior Oil after Mobil’s president Arne R. Nielsen jumped ship to take over the same job at Superior at a salary of $225,000 a year. Mobil wanted an injunction preventing Nielsen from communicating with his new employers for a year lest he betray secrets—in effect, denying him the right to work. But, as Nielsen had signed a confidentiality agreement with Mobil and as there was no evidence that this had been broken, Mobil’s case was thrown out.
What is causing consternation in personnel departments and executive suites is the whole question of an employee’s right to move from job to job. Had Mobil won its injunction against Nielsen it would have set a precedent preventing companies from hiring executives already employed. Further, in both cases, the courts are being used to settle what some feel are private disagreements between employers and employees when no formal breach of contract has occurred. But the stakes—the West Pembina oil play is the hottest petroleum action in Alberta in a dozen years—are enormous. These days, costs and technology are too high, it seems, to leave it to the oldtime scouts with their binoculars out in the field.
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