Has This Man Found the Next Gusher?

With oil near $60 a bbl., a mystery of geology becomes more and more intriguing: Where will we find the next great oil discovery to rival such gushers as Alaska's North Slope or Britain's North Sea? One might think the giant oil companies have the answer. But the biggest customers of all are turning to a 79-year-old Texan who operates like the Indiana Jones of the oil patch. Gene Van Dyke is one of the last of the wildcatters, independent operators who roam jungles and deserts looking for black gold. He has become the man to see if you need millions of barrels of crude oil a day to fuel a booming industrializing country, which is why the rough-hewn geologist found himself in Bermuda two years ago, hammering out a deal with executives of the Chinese national oil company Sinopec. "They were under pressure," Van Dyke recalls, and they were ready to make a deal. That meeting set in motion a year of negotiations, culminating in a $40 million deal to explore off the coast of West Africa.

That's where Van Dyke believes the world's next great oil field lies. He is now the largest deepwater license holder in Africa, with 20 million acres under license, an area equivalent to 70% of the Gulf of Mexico's deepwater fields. He believes that the region could hold as much as 100 billion bbl., equal to the reserves of such oil powers as Iran or Kuwait. Now wealthy partners are lining up to pay the cost of drilling exploratory wells, which runs into the tens of millions per try. "The Chinese and Indians, they're the ones that are the real, real market for the deals we have," Van Dyke says. "They don't need to make money on the deal itself. They just need the product." The emergence of giant Asian buyers on the market has made Van Dyke's dealmaking much easier. At one point, Sinopec and CNOOC, another Chinese state oil firm, were unwittingly bidding against each other for a single block off the coast of Morocco. CNOOC's failed attempt to buy Unocal for $18.5 billion earlier this year and India's bids against China in deals in Ecuador and Kazakhstan signaled that the two countries are serious about oil. In the process, they have given new life to the risky business of wildcatting.

Van Dyke has always liked to walk on the wild side. Ten years ago, when he started nosing around West Africa, the price of oil was only $20 per bbl. His friends thought he was crazy sinking money into leases with untested, unstable countries. Today, with a barrel of crude at close to triple that price, demand soaring and experts sounding alarms about depleting reserves, the majors are following Van Dyke's lead. In the offices of Houston-based Vanco Energy Corp., of which Van Dyke is chairman, you can see where this wildcatter is placing his bets. African tribal masks and art adorn the lobby and a 6-ft.-high, full-color topographical map of the African continent dominates one wall. Van Dyke has spent more than $100 million looking for oil in his West African patch, and early results were promising enough that ExxonMobil, Shell, Unocal and France's Total have signed up as partners.