(a) a production license; or,
(b) an exploration license.
When he had studied the Regulations in their entirety, he had to sit back and think hard. Only a small amount of money was required to secure a production and exploration license. As Paragraph 6 went on to point out:
‘(1) With every application for a production license there shall be paid a fee of two hundred pounds with an additional fee of five pounds for every block after the first ten in respect whereof that application is made.
(2) With every application for an exploration license there shall be paid a fee of twenty pounds.’
Harvey couldn’t believe it. How easy it would be to use such a license to create the impression of a vast enterprise! For a few hundred dollars he could be alongside such names as Shell, B.P., Total, Gulf and Occidental.
Harvey went over the Regulations again and again, hardly believing that the British Government could release such potential for so small an investment. Only the application form, an elaborate and exacting document, now stood in his way. Harvey was not a British subject, none of his companies was British and he realized he would have problems of presentation. He decided that his application must therefore be backed by a British bank and that he would set up a company whose directors would win the confidence of the British Government.
With this in mind, early in 1964, he registered at Companies House in England a firm called Prospecta Oil, using Malcolm, Bottnick and Davis as his solicitors and Barclays Bank, who were already the Lincoln Trust’s representatives in Europe, as his bankers. Lord Hunnisett became Chairman of the company and several distinguished public figures joined the Board, including two ex-Members of Parliament who had lost their seats when the Labour Party won the 1964 Election. Prospecta Oil issued 2,000,000 10-pence shares at one pound, which were all taken up for Harvey by nominees. He also deposited $500,000 in the Lombard Street branch of Barclays Bank.
Having thus created the front, Harvey then used Lord Hunnisett to apply for the license from the British Government. The new Labour Government elected in October 1964 was no more aware of the significance of North Sea oil than the earlier Conservative administration. The Government’s requirements for a license were a rent of £12,000 a year for the first six years, 12½ per cent revenue tax, and a further Capital Gains tax on profits; but as Harvey’s plan was to reap profits for himself rather than the company that presented no problems.
On May 22nd, 1965, the Minister of Power published in the London Gazette the name of Prospecta Oil among the fifty-two companies granted production licenses. On August 3rd, 1965, Statutory Instrument No. 1531 allocated the actual areas. Prospecta Oil’s was 51° 50′ 00″ N: 2° 30′ 20″ E, a site adjacent to one of B.P.’s holdings.
Then Harvey sat back, waiting for one of the companies which had acquired North Sea sites to strike oil. It was a longish wait but Harvey was in no hurry, and not until June 1970 did B.P. make a big commercial strike in their Forties Field. B.P. had already spent over $1 billion in the North Sea and Harvey was determined to be one of the main beneficiaries. He was now on to another winner, and immediately set the second part of his plan in motion.
Early in 1972 he hired an oil rig which, with much flourish and advance publicity, he had towed out to the Prospecta Oil site. Having hired the rig on the basis of being able to renew the contract if he made a successful strike, he engaged the minimum number of workers allowed by the Government Regulations, and then proceeded to drill to 6,000 feet. After this drilling had been completed he released from the company’s employment all those involved, but told Reading & Bates, from whom he had rented the rig, that he would be requiring it again in the near future and therefore would continue to pay the rental.
Harvey then released Prospecta Oil shares onto the market at the rate of a few thousand a day for the next two months, all from his own stock, and whenever the financial journalists of the British Press rang to ask why these shares were steadily rising, the young public relations officer at Prospecta Oil’s city office would say, as briefed, that he had no comment to make at present but there would be a press statement in the near future; some newspapers put two and two together and made about fifteen. The shares climbed steadily from 10 pence to nearly £2 under the guidance of Harvey’s chief executive in Britain, Bernie Silverman, who, with his long experience of this kind of operation, was only too aware of what his boss was up to. Silverman’s main task was to ensure that nobody could show a direct connection between Metcalfe and Prospecta Oil.
In January 1974 the shares stood at £3. It was then that Harvey was ready to move on to the third part of his plan, using Prospecta Oil’s enthusiastic new recruit, a young Harvard graduate called David Kesler, as the fall guy.
2
Davis pushed his glasses back onto the bridge of his nose and read the advertisement in the Business Section of the Boston Globe again, to make sure he was not dreaming. It could have been tailor-made for him:
Oil Company based in Great Britain, carrying out extensive work in the North Sea off Scotland, requires a young executive with experience in the stock market and/or financial marketing. Salary $25,000 a year. Accommodation supplied. Based in London. Apply Box No. 217A.
Knowing it could lead to other openings in an expanding industry, David thought it sounded like a challenge and wondered if they would consider him experienced enough. He recalled what his tutor in European affairs used to say: ‘If you must work in Great Britain, better make it the North Sea. With their union problems, there’s nothing else great about the country.’
David Kesler was a lean, clean-shaven young American, with a crew cut which would have been better suited to a lieutenant in the Marines, a fresh complexion and an unquenchable earnestness. David wanted to succeed in business with all the fervor of the new Harvard Business School graduate. He had spent six years in all at Harvard, the first four studying mathematics for his Bachelor degree, and the last two across the Charles River at the Business School. Recently graduated and armed with a B.A. and an M.B.A., he was looking for a job that would reward him for the exceptional capacity for hard work he knew he possessed. Never a brilliant scholar, he envied those natural academics among his classmates who mastered post-Keynesian economic theories like children learning their multiplication tables. David had worked ferociously for six years, only lifting his nose far enough from the grindstone to fit in a daily workout at the gymnasium and the occasional weekend watching Harvard Jocks defending the honor of the university on the football field or on the basketball court. He would have enjoyed playing himself, but that would have meant less time for study.
He read the advertisement again, and then typed a carefully prepared letter to the box number. A few days passed before a reply came, summoning him for an interview at a local hotel on the following Wednesday at 3.00.
David arrived at 2.45 pm at the Copley Hotel on Huntingdon Avenue, the adrenaline pumping through his body. He repeated the Harvard Business School motto to himself as he was ushered into a small private room: look British, think Yiddish.
Three men, who introduced themselves as Silverman, Cooper and Elliott, interviewed him. Bernie Silverman, a short, gray-haired, check-tied New Yorker with a solid aura of success, was in charge. Cooper and Elliott sat and watched David silently.
Silverman spent a considerable time giving David an enticing description of the company’s background and its future aims. Harvey had trained Silverman carefully and he had at his well-manicured fingertips all the glib expertise needed by the right-hand man in a Metcalfe coup.