How did you get started in the industry?
I have worked in the industry my entire career. I went to the University of Illinois, studied chemical engineering, and realized not only did I like engineering, but I also wanted to see the world. So I studied for a master’s of international management and combined that with an MBA program in Dallas, Texas, focused on energy. I started with Amoco, one of the predecessor companies of BP. It was 1979, the price of oil was shooting up, and I was not working on the engineering side at the time, but rather with an economic evaluations group working on new international ventures. So I did get to travel, and I loved the job.
Can you think of specific decisions or relationships that had a lasting impact in your career?
I realized that I wasn’t using my engineering background and I wanted to know a lot more about the business. So I asked the company if I could go back and be an engineer. That was a big break. I went from Chicago, Illinois, to Hastings, Texas, worked as a production/petroleum engineer in the field there and then moved up to Houston as a reservoir engineer for west Texas.
The second big choice in my career was to move to Aberdeen, Scotland, and work as an engineer on artificial lift. Working in the North Sea was one of the most exciting things an engineer could do in the 1980s because that was where all the giant offshore technology was being developed. It was fantastic! That had me hooked on the oil and gas industry, the offshore industry, and moving around.
What are some characteristics one needs to make it to the senior executive level?
I know many excellent executives in our industry, and they’re all different. Some are quiet, some are thoughtful, and some are more spontaneous, but they all ask questions. They learn and are very curious people. They’re all incredibly enthusiastic about oil and gas, they really know their industry well, and they are passionate about the people in the industry. You really have to draw on other people to get things accomplished. CEOs know that everything is usually a lot more complex than it looks, but, at the right point, you do need to make decisions. You have to realize the unintended consequences and the interconnectedness of things in our business. There has to be a sense of stewardship—for shareholders, for their money; and in the case of national oil companies, for their governments. You have to stay connected to the industry, the technology, and the new things that are being developed. You can’t get too far away from that in this industry. You also, I think, need to have a very supportive family who makes many trade-offs along the way.
What is your leadership style?
Being a leader was not really just a goal for me, as much as getting things done through people. I try not to micromanage things, but I am a detail person. I could not be a CEO and rise above all the details. I have to stay connected to the organization. And we do not live in a command-and-control world today. I try to act with respect, trying to always put myself in the other person’s shoes but still drive results and performance. I like working with a team that sits down, argues the pros and cons, and openly debates.
BP faced a major challenge in 2010 with the Deepwater Horizon incident. How has this changed the industry?
If you look at the history in any industry—everything from aviation to manufacturing—there are points in time where bad accidents have happened. And always coming out of those are changes that improve safety and regulation going forward—they make everyone adjust. I think the Deepwater Horizon accident has made the industry further improve its standards universally and rethink the relationship between operators and contractors. And society is working hard now to find the right balance between regulation and the ability to do things efficiently.
What has BP learned from the incident and what has it done to get back on track?
We have had a couple of big industrial accidents that have shaken us. We have been through a period in which a company with great pride in its accomplishments over a long history lost some of that pride, but now I think it is being restored. I think BP is a great business. We want our people to have the confidence to make decisions. But the past decade has also made us rightly question some things about ourselves. I believe this is a healthy part of what any company should do: look at its strategy as well as how it’s organized and what people, skills, behaviors, and capabilities it values.
We’ve found that we have made ourselves overly complicated. Part of that was well-intentioned: We built structures and processes to make sure that we could feel that we were always double-checking and doing the right thing. We of course still want always to be safe, but we see now that there are ways to simplify the organization while still being true to that vision. Going forward, I see us being more focused—a business that doesn’t do everything, but focuses on what we do well.
For instance, we were a decentralized organization around the world. It’s always easy to decentralize, and there are advantages in a big structure to create autonomous units and say “Go do things and be profitable.” But we now believe that a business of our size, dealing with the kinds of risks that we have, needs to be centralized. We need to have standards that work all around the world. There are many risks that we have to deal with, with great care, and great responsibility. We’ve now centralized project organizations and the functional organizations, so you can move the best people around and devote time and energy on a problem through a function.
What are the most pressing challenges of our industry today? Have they changed in the last decade?
There are two kinds of challenges. There are the above-ground ones, and the below-ground ones. There are huge challenges above the ground, which can be political upheavals, regulatory issues, legal frameworks, or taxation that might not encourage development below the ground, in the rocks. The world has been through troubled times during my 35 years, and it continues to be troubled today. There are simmering conflicts around the world that are starting to connect, so that’s one of the challenges.
We’ve also got the challenge of society’s negative view of the products we make in the oil and gas industry—it’s not a popular industry with everyone. We’ve got parts of society that don’t encourage us to produce the energy we need for growth and development. And then there’s the obvious concern about climate change. I’m optimistic that humankind can solve this problem because, if you go back in time, mankind burned wood, went to coal over time, then to oil, and now natural gas. I’m optimistic that mankind will solve this problem through a long wavelength transition to low-carbon energy, but probably not as quickly as some would like.
Because energy has been an industry with a boom-and-bust cycle over the last 35 years or more, you have had gaps where people didn’t enter into our business, particularly on the engineering and geoscience side. A great crew change is going to happen. There were 10 or 15 years where few went into the industry, so young professionals are going to have great opportunities that will come along fast and accelerate as people suddenly start moving out of the industry. But gaining experience and getting people to soak up as much as they can—and getting an older generation to pass on as much as they can—is a big challenge.
And below the ground also, technically, high-temperature and high-pressure technologies are going to be part of our future challenges. The better imaging of the subsurface is going to be a really fun challenge for people. And then keeping the oil and gas industry up the technology curve of what’s possible, like constant metering and monitoring. In an airplane almost everything is monitored full time and in real time. There’s so much potential in oil and gas to do that with wells and fields, because when you spend time with people in some other high-tech manufacturing industries, they say we’re way behind.
What are some key technology challenges for the E&P industry?
It’s going to be unique to different geographies. The Houstons, Aberdeens, Stavangers—places like these will be the centers of our remarkable ability to work with seismic data, process it, and make decisions faster. At all production sites we should monitor things much more in real time and learn when problems are happening much faster. One of the challenges is to make sure that engineers working with those systems spend time in the field, seeing how it actually works and getting an intuitive feel. There’s the science of it but, like all professions, it’s also an art.
BP published its Energy Outlook 2035 in January. How does BP view the energy industry’s future?
Today there are 7 billion people in the world and there’ll be 9 billion people in 2035. We believe that virtually all forms of energy are going to be needed. Hydrocarbons are not going to disappear.
I like to call it the rule of 27s: From our Energy Outlook, by 2035, 27% of the energy will be provided by oil, 27% by gas, and 27% by coal, almost equally. Renewables will make up less than 10%. We think that 90% of transport fuels will remain oil-based in 2035.
With virtually all the growth coming from the non-OECD world, these countries will have a natural desire for prosperity. Gas is a little different than oil. It appears to be more regional, even though you can liquefy it and move it around. Natural gas has created an incredible boom in the US economy. The oil increase in the US has offset the outages in places like Libya and Sudan in the last year. And if we hadn’t had the increase in oil production in the US to fill this gap, I could see the price of oil being USD 150 per barrel today. So if you link that to people working in our industry, there’s a great future in oil and gas with all kinds of opportunities. It’s not an industry that’s going to “sunset” anytime soon.
What advice would you offer young professionals considering a career in this industry?
You can build a very exciting career in different parts of the world working with different people, cultures, governments, and enormous technical challenges. When you come out of a university, you are going to enter into an industry with a clock-speed that is going to get faster and faster and the technology will continue to push at the frontiers of science and engineering.
Excellence doesn’t come overnight. Always remember, it takes time to become really good at what you’re doing. Get close to the technology, see it in action out in the field. It’s very important, after a period of time, to either love what you’re doing or get out. I’m not sure I enjoyed my job immediately; suddenly life is more structured and you have to get up every morning and go to work, but now I don’t even look at the clock. That first year of a career is quite different: People don’t give you instructions and tell you exactly what to do, so you’re not sure you’re making a contribution—it just comes quickly with your own personal enthusiasm.
How have you been involved in SPE? How does your workforce leverage company activities with SPE expertise?
I joined SPE when I was working in the field in Texas, and I’ve been a member for over 30 years. I found it a way to network with more professionals. When I was in Russia, we worked closely with SPE’s local chapter and utilized it to develop local talent on a bigger scale and connect people.
I chaired a large SPE conference in Moscow and got other companies and people involved, particularly from around the world. Many BP locations do that to develop a sense of connection with the industry—in Angola, Indonesia, Azerbaijan. It creates a sense of professional belonging around the world that we take for granted when working from one location.
How do you see company loyalty within BP?
What BP and Amoco and Arco did starting in 1998 kicked off a large wave of consolidation of the oil and gas industry. In many ways the promise of efficiencies didn’t quite happen. I find people at BP and all the heritage companies to be incredibly loyal to the company. People want to see it succeed. They have been through a very difficult 4 years. The people who are working it really just want to get the company back on its feet, and do well, with no arrogance. That’s a remarkable thing, and it’s hard to put a value on that.
We’ve crossed some of the emotional bridges of selling various things that big companies can become very attached to. I think people realize we are a business, so we’ve got to perform in a certain way. I think BP is well-positioned to do that. I’m optimistic about BP’s future, and I couldn’t be more impressed with the dedication of everybody around the world.
What would you mention to attract students and young professionals to join the oil and gas industry?
We just have such an interesting story to tell about what we do—in terms of the high-tech nature of it, the leading-edge technology and engineering, the job opportunities, the vital nature of energy to drive prosperity, economic growth, and provide heat, light, and power for society…much of which we take for granted.
We can do a much better job as an industry in telling our story—because it’s a very exciting industry—and we should get young people to think about the industry earlier, so that these great careers are in their sights.
Every person who’s a member of SPE should try to tell that story—in high schools, colleges, and communities—so that more of us can make this essential contribution to society, providing critical supplies of energy to the world, and at the same time enjoying greatly varied, challenging, and deeply rewarding careers across the world.
