Cutting Rocks—With A Huge Sense of Purpose
The Yin and the Yang of E&P—No Shadow without Light
What does a sense of purpose have to do with anything, you may ask? The exploration and production (E&P) business is about rocks, rigs, and remotely operated vehicles (ROVs). It is about compound average growth rates (CAGR), return on average capital employed (ROACE) and great health, safety, security, environment, and social responsibility (HSSE-SR) performance. It is not about soft stuff such as a sense of purpose, passion, and creativity, or is it? I am going to try to convince you that it is. The two are the yin and the yang of E&P or the hard and the soft side of E&P. After 36 years in the industry, I have come to realize that the hard side of E&P actually is soft, since delivery depends 100% on the human element and that the soft side is the hardest to get right. The truth is you cannot have one without the other (Fig. 1 above). If a sense of purpose and passion are two key components of light, then strong growth and a healthy return on investment are the resulting shadows. You cannot have the shadows without the light.
The Giza Pyramids, 1500 BC
If we asked a craftsman cutting rocks next to one of the three ancient Giza pyramids being built around 1500 BC, “Excuse me, sir, are you cutting rocks?” His answer would have been, “No, I am not just cutting rocks, I am building a pyramid.” The difference is the sense of purpose associated with what he was doing. He was involved with something greater than himself and his own self-interest that inspired and energized him in his work. With a sense of purpose, suddenly, what you do for a living is not just a job. It is much more than that. It is about making a difference. It is about changing the world.
240,000 New Energy Customers Every Day
Today, we have 7.2 billion people on the planet. Every hour, the Earth’s population grows by some 10,000 new energy customers and by a quarter million every day. After just a week, we have generated a new city with a population of 1.5 million with every new citizen wanting one thing in particular: energy. This is because our new world citizens want the same as us: electricity at home, heating and cooling, mobility, and transportation. (Note: Approximately 1.3 billion people are still without electricity and, according to the World Bank, only 24% of Africans have access to electricity. They are waiting for us to make energy available and affordable for them.) Additionally, the middle class is growing rapidly with motorized transportation often topping the wish list for many when they can finally afford it. As a result, global energy demand grows strongly as does the need for oil and gas. So, are you only drilling a well? Only analyzing seismic data? Or just designing a new platform? No, you and your fellow 124,000 SPE members, and the SPE staff along with other energy professionals, are working to produce more than 92 million BOPD and more than 350 Bcf/D of natural gas. Is that a good day’s work or what? That energy helps makes the world go round. It fuels human progress and it improves living standards. Therefore, think of what you do for a living this way: You help 7.2 billion people get their energy every day. That is something you can be very proud of. You are not just cutting rocks—you make the world a better place.
Congratulations on your choice of occupation. I am confident that planet Earth would not have had the energy it needed without you and your fellow SPE members and SPE staff. The US Energy Information Administration (EIA) is forecasting growing oil demand and strong growth in natural gas demand. Just to illustrate the scale of the oil supply challenge ahead: If we assume a 5% natural global oil production decline rate, 92 will have become only 35 million BOPD in 20 years, in 2034. At the same time, assuming oil demand grows by 0.9% per year, demand will be 110 million BOEPD in 2034. Now, the distance from 35 million to 110 million BOEPD is the production gap that we have to fill in the next 20 years—it adds up to putting some 330 billion bbl on stream! Natural gas will have to substitute more for coal if we are to curb CO2 emissions sufficiently before renewable energy is ready to fuel the world. Again, you are a key part of the solution.
How to Win the Future According to Professor Gary Hamel “Passion Trumps Intellect” is a YouTube video, created by author, lecturer, and thought leader Professor Gary Hamel, who says that intellect, hard work, and compliance are just global commodities that do not set a company apart. The winners going forward, in Hamel’s view, will be those companies that have people with initiative, creativity, innovation, and passion as they are changing the world. It is that sense of purpose again.
You Cannot Be Great Globally, Without First Being Great Locally
SPE’s past Technical Director for HSSE-SR, Roland Moreau, often reminds us how important sustainable development, social performance, and corporate social responsibility are for the industry. Securing and maintaining a license to operate extends beyond legislative and regulatory permitting to encompass not only the mitigation of adverse social and environmental impacts, but also the advancement of financial, societal, and environmental benefits via execution of strong sustainability performance. To that end, the SPE Board of Directors in 2014 approved a sustainability definition (see box) that encapsulates what sustainable development means to SPE and its members.
For E&P companies to have a great profile or brand globally, we must first earn it by being a safety-first, respected, and trusted corporate citizen locally. Engaging with local stakeholders as a corporate force for good in the local community gives more sense of purpose. I encourage you to reach out to middle and high school classes in your hometown with the global energy challenge. Educate how the E&P industry steps up to the plate to solve it. Perhaps your presentation will cause a gifted student to choose the science, technology, engineering, and mathematics (STEM) direction. Hopefully, when they graduate they will erase “im” from impossible in the E&P value chain and help us all become E&P 2.0.
65,000 Years of Experience
According to a great article, “Are You Deciding On Purpose,” by Richard Leider, 1,000 65-year-olds were asked: “If you lived your life over again, what would you have done differently?” I think their answers are instructive and useful for the rest of us. “I should have been more reflective, I did not see the big picture,” and “I would have better understood what gives fulfillment and a sense of purpose. It is always beyond your ego and financial self-interest.”
So, there you have it. You helped fuel the world and you helped drill the approximately 83,000 wells it took to do that in 2014! And you helped make sure all this happened in a sustainable manner—getting everyone safely back home to their families after work each day. You can take enormous pride in that and I hope you really do. At your workplace, through your SPE volunteer service, and by engaging with your stakeholders locally, you are the rising tide that lifts lots of boats. And when you add it all up, how can you not feel that great sense of purpose? Think about it!
Cutting Rocks—With A Huge Sense of Purpose
Helge Hove Haldorsen, 2015 SPE President
01 November 2014
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19 June 2019