ABSTRACT
In 1961 something remarkable happened in the Libyan Desert. Eight years earlier in 1953 an obscure entrepreneur named Bunker Hunt applied for a drilling licence. The prospects were exciting, as geologists advised Hunt that an oilfield recently discovered in Algeria would almost certainly extend into Libya. Unfortunately for Hunt the so-called ‘Seven Sisters’ (multi-national oil companies) were already drilling in the best sites. The only concession available to Hunt was so far remote from the Algerian border offering such miserable prospects that even the customary bribe to local officials was waived:
The story could have ended there … except for Bunker’s instinct. As a gambling man, he believed that the more cards he could draw on, the better his chances would be, even if the cards were those no one else thought worth picking up. (Fay 1982: 5)
Indeed Hunt drilled for years and found nothing. Moreover, despite their markedly better chances, the ‘Seven Sisters’ did no better drilling near Algeria. Eventually, one of the ‘Sisters’ – British Petroleum (BP) – gave up and went into partnership with Hunt:
The deal did not at first change Bunker’s luck. In 1961 BP’s experienced drilling teams struck out into the desert and drilled one well in Block 65. They reported that it was dry. So was the second well, and the third. (Fay 1982: 6)
The rig superintendent was instructed by BP to stop drilling and return home. It was the final shattering blow for Hunt who had invested all his money in the venture:
14 E s c a l a t i o n i n D e c i s i o n - M a k i n g
Then, just for luck, the rig superintendent drilled another ten feet into the sand before withdrawing the bit from the third hole, and, in doing so, uncovered Bunker’s ace. That ten feet was enough to pierce the cap of one of the world’s largest oil fields. (Fay 1982: 7)
Any decision involving uncertainty runs the risk of failing. When it becomes apparent that a venture is not turning out as expected, decision-makers may face a dilemma. Do they cut their losses or risk ‘throwing good money after bad’? We will probably never know what made the foreman decide to drill drown another 10 feet. Yet supposing that the decision had proved abortive – then what? It is not difficult to imagine the foreman drilling down another 10 feet, and then another 10 feet and so on.
