New export? Dowland-Bach finds customers in Middle East

Photo/Michael Dinneen/AJOC

Is this a new high-tech export industry? Could be.

Oil well control panels are being built in Anchorage for shipment to the Middle East. The manufacturer is Dowland-Bach, a long-time builder of hydraulic and electronic control systems designed to operate under tough North Slope conditions.

It’s not a stretch to see that the same requirements for reliability and durability needed by North Slope producers are also needed in the harsh desert environment of the Middle East, or for that matter, remote locations at oilfields in the jungles of Colombia, where Dowland-Bach has also supplied its products.

The latest market for Dowland-Bach is supplying Halliburton with control systems for use in the United Arab Emirates.

The company was started in Alaska in 1975 with the prototype of the first Arctic well control system being invented and built in the garage of Ed Clinton, one of Dowland-Bach’s founders. It was subsequently purchased by Lynn Johnson, also one of the original founders and Clinton’s partner.

In 2008, Johnson sold Dowland-Bach to Koniag Inc., the Alaska Native regional corporation based in Kodiak that owns several technology companies. Johnson still runs Dowland-Bach as its president.

The story of how the company formed is a classic tale of inventor/entrepreneurs sensing a need in a new industry — in 1975 it was the North Slope oil fields — and then using technical skills to make a product to fill those needs.

The industry’s problem in 1975 was to find a reliable control system to ensure the safety of producing wells, to shut them down if something went wrong. The well shutoff valves and controls function on remote production pads that can be isolated in bad weather.

There were doubts that the existing technology designed for the Lower 48 would be reliable in the harsh North Slope winters, Johnson recalled.

“There were lot of good systems out there in the industry but none had been proven in the Arctic at that time,” he said. “No one had done any real research on how these would perform at 55 or 60 below zero temperatures.”

Clinton, a mechanical engineer and local businessman who had earlier founded Alaska Valve and Fitting, had conceived a system that could stand up in Arctic conditions and that used, among other ideas, aircraft lubricants that are designed to function at cold temperatures.

“He actually built the prototype in his garage,” Johnson said.

Alaska Valve and Fitting was a distributor of high-end tube fitting, stainless steel connectors that protect hydraulic fluids used in instrumentation.

The North Slope well controls were vital to safety. The State of Alaska adopted requirements that control valves be at wellheads at the surface with a backup valve installed below the permafrost, about 2,000 feet underground.

Clinton had been making sales calls on BP engineers on behalf of Alaska Valve and Fitting and learned about the need for reliable control systems. He then started tinkering at home in his garage, Johnson said.

Clinton was also a neighbor of Rex Bishopp, Johnson’s step-father, and his mother, Ruth Bishopp who at the time owned Alaska Helicopters. Johnson was then a college student in California who came to Alaska every summer to work in the family helicopter business.

Clinton’s garage tinkering and his prototypes piqued young Johnson’s interest. A friendship formed, and by 1971, not long after the big North Slope oil discoveries, Clinton was talking up the opportunities in Alaska to Johnson.

In 1974, Clinton formed Dowland-Bach and asked Johnson to join him.

Making mechanical music

The company was named for two 17th and 18th century composers, John Dowland and Johann Sabastian Bach, because Clinton was an avid lover of classical music and those were two of his favorites composers.

“It was a good fit because he had the technical background and I had a business and finance degree as well as a ‘school of hard knocks technical degree’ — skills I picked up working around helicopters.” Johnson said. “In a small startup company you need people who can do different things, sweeping the floors one minute and talking to the bankers in the next.”

Meanwhile, at BP Clinton was pitching hard for his new prototype wellhead control system.

“The people at BP were impressed and they agreed to test one of the prototypes at Prudhoe Bay,” Johnson said.

It passed the test.

“What was remarkable is that the major oil producers were willing to take a gamble on a new technology developed in Alaska and with a system that is so vital to safety and the industry’s reputation, if something went wrong. There was a review committee at BP for our proposal with five people, and three of the five decided to go with our plan.”

One of the three supporting Dowland-Bach’s proposal was Brian Davies, a former BP manager who after retirement was active and well known in Anchorage cultural and community affairs, and who passed away in 2012. Davies and Fred Wagner, another senior BP manager, were influential in arguing the new, locally developed technology should be given a chance.

The first order, Johnson recalled, was for 74 control systems.

Getting the order and delivering on time was a huge challenge, though. There were only four employees including Clinton and Johnson. Dowland-Bach got the approval from BP in May 1975, and the systems had to be in place to meet BP’s deadline of starting Prudhoe Bay production in mid-1977. To do that, the systems had to be put in place and tested in early 1977.

It was an incredible feat.

“We started a company, built the systems, installed them and got them approved by the regulators in 18 months,” Johnson said.

There were huge pressures on Clinton, Johnson and the new company’s two other employees because the wells couldn’t be started without the control systems in place and those had to get the stamp of approval by the state and federal governments.

The systems worked as advertised. Hundreds of wells were to be drilled by BP on the Slope, and ARCO Alaska (now ConocoPhillips) soon followed with orders for the devices on the eastern side of the Prudhoe Bay field, where it operated, as well as the Kuparuk field that was developed after Prudhoe.

Since Dowland-Bach was formed, about 3,000 well control units have been built, mostly for the Slope but with some also in Cook Inlet, on the Trans Alaska Pipeline System and, in recent years, overseas.

The company’s product line also expanded. Dowland-Bach now makes chemical injection systems, Johnson said, which are increasingly used as the Alaska oil fields age and more stimulation of wells is needed.

From jungles to deserts

The expansion of sales outside Alaska had its roots in Dowland-Bach’s relationship with its first customer, BP, and Fred Wagner, the BP manager in Alaska who was one of the company’s original champions and who was familiar with the control systems.

When Wagner transferred to Houston in 1990 and became responsible for some of BP’s development work in Colombia he remembered the Alaska control systems.

Colombia’s jungle is a much different environment than the North Slope but there are certain similarities. BP wanted well control systems that were sturdy but which could also be reliably operated remotely, not only because of terrain but also security. Johnson’s team also fitted the equipment to be solar-powered so that the facilities were completely self-sufficient.

“The control system for Colombia were the most sophisticated we had ever built, not only because they was solar-powered but because they were activated by radio,” Johnson said.

Mostly through word-of-mouth, Dowland Bach’s reputation spread, and most recently Halliburton, the giant of the industry’s well services companies, became interested in the company’s equipment as a good fit for remote fields operating in the deserts of the Middle East.

The orders came, and Johnson’s team — there are about 30 Dowland-Bach employees now — is assembling the equipment for Halliburton for use in the United Arab Emirates. Halliburton and Dowland-Bach are now working on other opportunities in the Middle East.

For its part, Koniag is happy with Dowland-Bach. Koniag CEO Will Anderson said its acquisition of Dowland-Bach resulted from the Koniag’s interest in diversifying its operations to include Alaska natural resources. 

“Our search very quickly led to the oil industry and then to Dowland-Bach. Lynn Johnson and his team are terrific innovators — Koniag is very pleased to be part of the contribution their products make to industry, both in Alaska and abroad,” Anderson said.

Tim Bradner can be reached at [email protected].

01/16/2013 - 11:15am