Categotry Archives: Oil Companies

One supermajor too many?

It is difficult to talk about the oil price these days without somebody or other popping up with a conspiracy theory involving the Saudis deliberately not cutting back on production in order to simultaneously cripple Russia, damage Iran, and hobble the fledgling US shale oil industry. Streetwise Professor does an admirable job of explaining why this is bollocks, that the price drop is from the demand side, and the Saudis cutting production would cause them to lose revenue (which is […]

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No Balls Means Bad Numbers

There is a terrible affliction among managers in the large companies which make up the modern oil and gas industry.  The medical term for it is “lacking balls” and it prevents those with the condition from making decisions. (Before I go on, let me just say that this is nothing to do with women in the industry: Golda Meir and Margaret Thatcher showed that women can have balls, and sometimes more so than their male peers.) Let’s suppose I was […]

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“However did this happen?!”

I once worked for a company that was, by and large, run by a group of acquaintances if not actual mates.  The company was appallingly run, and survived largely on handouts from its parent company that did extremely well out of a monopoly position kindly granted to it by the government.  A feature of this company was regular reorganisations which saw the same dozen or so men (all of the same nationality) shuffled between the senior positions in HQ like […]

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Project Management is about to get harder

Every project I’ve worked on that has found itself adrift of where it should be in terms of costs and schedule with the end nowhere in sight (i.e. all of them) there has always been a mentality among the project team that “it will get done eventually”.  Meaning, no matter how bad it looks now eventually the project will be completed and production will start and the whole thing will be deemed a success.  In other words, the concept that […]

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Big Moustache, Bigger Shoes

The death of Total’s boss Christophe de Margerie in a plane crash in Moscow late Monday night  has shocked everybody not only in France but in the global oil industry as well.  As the tributes poured in for the man many nicknamed Big Moustache – a term he seemed almost proud of – I read the same adjectives several times: charismatic, unique, larger-than-life, outspoken, funny, original, independent.  When people write of famous powerful men they often exaggerate, especially if writing […]

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Safer betting on a horse

Recently I was asked to attend an investors’ forum put on by a major oil company on behalf of a friend who works for an investment fund. He asked me to go because he knew I had the inside track on the workings of the oil industry, and thought it might be fun. It was. The representative of the oil company showed a slide of a collapsing Return on Capital Expenditure which was inversely proportional to the oil price, and […]

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"This is a private matter."

What price your life, sir?

When oil companies set up shop in some backward, dangerous shithole the biggest risk they face is how to transport their employees without getting them killed or injured.  Road accidents is always by far the biggest cause of deaths and injuries in the oil business, mostly because the places they operate feature one or more of the following: bad road surfaces, poor signage, no lighting, no road markings, ice, snow, sand, mud, vehicles subject to no maintenance, poor training and […]

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But it's within the budget!

Sleeping Around

During my career I saw many companies attempt to accommodate their travelling employees by entering into agreements with hotel chains. The most sensible I saw worked like this. The Oil Company entered into an agreement with a global hotel chain, which set out an agreed rate for a standard room in each hotel around the world. I don’t know whether this was set as a percentage of the standard rate, or set individually per hotel, but the agreement was that […]

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Poslat’ na khuy

Poslat’ na khuy

Ever since Shell acquiesed to the Kremlin’s demand to surrender majority ownership of Sakhalin Energy in 2007 I have thought that western oil companies have fundamentally misunderstood the Russian mentality.  The perception at the time was that Shell believed by caving in on this issue, they would gain favour with the Russians and hence be in a strong position to participate in future projects.  Whether this was true or not (the alternative view is that Shell simply had no choice) […]

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QA/QC Fail

He Who Pays the Piper

This article is refreshing in the honesty of the words reported: Quality in the supply chain is the biggest concern for Shell when it comes to its giant Prelude floating liquefied natural gas project off Australia, according to the project’s director. … The sheer volume of individual contracts involved in the LNG project off the north-east coast of Western Australia also, however, causes problems for those in the supply chain, leading to delays. … When pressed during a conference session […]

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