Thinking back to when you started working in the oil and gas industry, what advice would you give today to new industry professionals?
I consider it a very distinct privilege to be in this industry. After some 34 years, every single day is still just as much fun as the very first day. I cannot imagine a better industry to get exposure to technology, people, money, and international politics.
When I look back on my career, I think of how difficult it is to forecast what lies ahead and what may be asked of us, so I encourage those who join the industry today to be open-minded about all the opportunities, wherever in the world they may be. Raise your hand every now and then when something interesting becomes available. Chances are it will be very valuable to you to build a base of knowledge for your career. That would be my first advice: Go get what’s out there, there’s a lot of fun to be had.
How have mentors led you into your role?
Throughout my career, mentors have been very important. I was very fortunate early on to have a couple of mentors who had a huge impact on me, and, even though they didn’t know each other, their message was the same: “Your career is like a cake. It takes time to bake. Don’t be in such a hurry that you lose sight of learning. Don’t be overly aggressive in trying to achieve certain positions. Get a strong base of knowledge and a strong foundation. Expand it every single day. Obtain 10 years of experience, not 1 year of experience 10 times over. Go get the experience, go get the knowledge.”
I was fortunate that I heeded their advice. And after putting one foot in front of the other for a long period of time, like most people, I finally had a door open. Sure enough, as I progressed, I had opportunities to jump to things a little bit bigger. I was prepared at each step of the way because of the good advice I had received. I got to know the business from the ground up.
Why should young engineers choose petroleum over other sectors? What is most compelling about oil and gas?
I find all the different aspects of the industry—including technology, finance, people, and politics, which take place on a global level—to be very intriguing on a daily basis. I enjoy that variety a lot; it can be appealing in and of itself.
I am drawn to jobs where one actually builds things, one actually creates wealth. Our shareholders get something new as a result of our efforts that they didn’t have before. We don’t take their ideas, move them around, and give them back. We take our own ideas, create something from nothing, and hand it over to our shareholders as value. By virtue of owning our stock, they’re betting we can do that over and over again. What I love about this industry vs. other industries is the wealth creation. We physically find and then provide commodities that everybody in the world needs. We physically make things happen every day that allow humankind to be better. In the course of doing that, our shareholders are better off and we’re better as individuals.
When it comes to choosing a career, imagine an industry where there is variety and intrigue every day as you build and create wealth that people can physically walk on and touch. What could be better? That’s the oil and gas industry.
The energy industry underpins the prosperity and success of modern life, yet it never seems to get the credit or recognition it deserves. What effect does this have on attracting young professionals?
The industry is one that comes with risk, as it operates in harsh environments and hostile climates. That has created a political overtone and an environmental overtone that we as an industry have to take on and show we can competently handle. That said, I am very proud of this industry and am very proud of the companies that operate in a safe, environmentally sound way and make the world better.
There’s no doubt that, today, the oil and gas industry fights for talent because the world offers many opportunities. Without dismissing those other opportunities, this industry is the cornerstone upon which everything good happens. When people progress in life and want to better themselves, energy is the ingredient that makes that happen. As an industry, our relevance and importance is on solid ground.
What do you as a chief executive do to inspire and retain young people?
When a young professional joins us, they have already made the first—and sometimes very difficult—decision to join this industry, so I just thank them immensely for having done that. As far as inspiring and retaining young people, it is essential that leaders never misunderstand that they really work for the entire workforce. This means my management team and I really work for the young people. While we do provide some guidance and direction and set a few rules, we work for the people in this building and in our organization. I hope they feel we try to provide them everything—from a great working environment, an interesting job, a good supervisor, to good compensation and benefits—so they and their families can look at BHP Billiton Petroleum as a career and not just a job. We feel if we do that well, people will connect to us, develop loyalty, and want to be part of the big things we’re trying to accomplish. At the end of the day, working for the people who work for you is the best way to build the connection that allows that long-term relationship to prosper.
What are your most pressing challenges leading a large organization of people in today’s environment?
I think our greatest challenge is the fact that we’ve grown so rapidly as an oil and gas organization. Adding the depth of talent and management that we’ve done has been a real challenge. Thinking back to 2006 when we produced 300,000 BOE/D, we now make 650,000 BOE/D, and our workforce has quadrupled during that time. We’re in more countries around the world. We’re exploring in remote areas. We’re spending five times the capital.
We know the ultimate differentiator between us and another company is our people. We work really hard at getting them in here, giving them big jobs, and then working with them and for them to make their careers as prosperous as we can. Right now, if I could snap my fingers and obtain more talented people, I would love to do so. We know that’s not possible, so we grow it and nurture it, and we do everything we can to make every day a positive development experience for our people, and it seems to help.
Can you expand on the statistic that your production has doubled but your workforce has quadrupled since 2006?
Our background has been offshore, and, in the offshore business, the employee-per-barrel ratio is very advantaged. For instance, at a big offshore platform that generates 100,000 B/D of oil, one might have 50 people working on one hitch and 50 on another; but, it’s a very modular, leveraged workforce. Moving onshore, as we’ve done in our US business, that ratio changes a lot. Whereas we once operated in seven countries with seven offshore rigs and had about 55 people in our drilling department, we now have 455 people in our drilling department and about 50 land rigs. The onshore business requires a very large number of people.
At the same time, our supply organization has undergone the same thing because the number of rigs and amount of pipe we’re moving is so much larger. Our regulatory environment is now much more complex. And our safety organization is much larger now because we have increased our rig count.
Will you pursue global shale opportunities?
The shale phenomenon is real, and it’s very large. Shale is going to be part of the life of everybody who enters the oil and gas business today and aims to stay in the business for the next 20 to 30 years. The US, in particular, is blessed with the right combination of factors for shale to take off: geology, infrastructure, population to sell the product to, regulators who want to see us do well, a service industry, and especially landowners who get to be royalty owners. So, it is not surprising that the US piece has exploded, and it is going to get much bigger. We thought, as a corporation, that it would be irresponsible not to be in it. So, yes, we look forward to expanding globally. We’ll no doubt look at many opportunities around the globe since shale will be around for the next 20 to 30 years, if not longer.
Why did you make such a sizable foray into shale, given your offshore history and expertise?
The move was made because of the business opportunity we saw. Your question is very insightful; and, I would say, firstly, it’s to build shareholder value, but, secondly, it’s to build the depth in the organization to have more opportunities. We were able to acquire massive amounts of resources at an entry-level position in four giant fields that are well-balanced with gas and liquids, so we made these unique investments because we are bullish on every part of energy and its need, and our corporation has the wherewithal financially and technically to go about this over the long term. That’s a real advantage. But we intend, first and foremost, to create shareholder value. The greater organizational depth brings with it a set of opportunities that allows the overall business to flourish. You can’t imagine what has happened here now that we have much more talent. Not only are we able to do much greater things today, but we are in a position to pursue many other things around the world should we choose to do so.
Will offshore retain its place in your portfolio?
The offshore is still where the opportunities are internationally. If you’re going to be in this business, our opinion regarding the next 30 years is that you have to be in two large strategic areas. You’ve got to be able to work in the deepest waters in the world by drilling there and building the production facilities. That’s where the opportunities are. Likewise, you need to be competent in the shale business. Those opportunities are real, and they’re going to be a large part of our future.
Given that we’re already strong in deep water, we’re going to keep that strength. Our specialty in deepwater geoscience and engineering allows us to find and develop anything in the world. We’ve had great success offshore, and we hope to replicate that in shale. We didn’t get in the shale business to just be an average player. We intend to work in the biggest fields, with a continuous improvement mindset that will yield results superior to others.
So, we’re organized into two divisions: a conventional offshore business and an unconventional onshore business; and, although it’s all stitched together with common engineering, geoscience, and finances, each division has very specific metrics, tactics, and overall approaches to the business that are unique to their particular areas.
How is BHP Billiton handling the “Big Crew Change”?
The circumstances of it are real. We had the period in the early ’80s when, if you had a pulse, you could get a job. Luckily, I had a pulse at that time, so I got hired. Following that, we have had a series of events in modern society where banking, IT, technology, and other industries have attracted an awful lot of our talent. But, in the last decade or so, we’ve had a rebirth of the industry, particularly with the shale phenomenon and the rising commodity prices, where people can see the financial advantages.
We try our hardest to hold on to every single person, and we’ve been blessed with extremely low attrition as a result of our efforts to keep everyone. Quite honestly, we try to bring people in and get them suited up in substantial jobs as quickly as we can. A company like ours often is forced to move people up in responsibility earlier than we’d ordinarily like to. We try to have them connected to veterans, but we do have young people here who are rising rapidly into big areas of responsibility; and, hopefully, they’re setting examples for others.
I think, right now, we just have to do the very best with what we’ve got, hold on to everyone we already have, and then have an offering that is a little bit better than the next guy to see if we can continue to attract.
What do you find to be the most pressing business challenges today?
There are two things that concern us. Given our corporate preference to promote from within, it’s a very important business challenge to build the technical and managerial depth to be self-sufficient so our people know, as they progress within BHP Billiton, that good job positions are there to be had. That means a lot to me, and it means a lot to all of us in our company.
The other challenge most people like me have is retaining the quality of output as the company gets larger and simultaneous operations increase. Imagine the increase in the number of our rigs, the amount of seismic we’re running today vs. the past, and the extent of engineering going on in our facilities. In order to handle things simultaneously and to retain high quality, our management systems have to be good, our people well trained, and our discipline judicious. We have to do the kinds of things that, on any given day, lesser companies may not be able to do. We have to have the wherewithal to do the hard yards every day. That’s how you stay great. And, to be able to do that simultaneously in every place around the world is hard; but, that’s what we’re working hard toward, and that’s what we’re going to do.
