When I think of how my career development has evolved, the decisions that made a difference were those that led to taking on something completely different and outside my comfort zone. I was a chemical engineer and wasn’t trained in petroleum engineering. I started out in the midstream part of the business, handling gas processing and designing and building gas plants. I stayed in the projects and facilities part of the business for the first 8 or 9 years of my career, and then I had an opportunity to manage a reservoir engineering group in one of our districts. I didn’t know a thing about it, but it gave me a chance to move into the so-called “black oil” end of the business. I worried about the decision because I was asked to manage a group and I technically didn’t have that expertise; but, it stretched me. Sometimes, those moves are done at personal risk; but, I point to that as one of the personal decisions I made to step beyond my comfort zone to develop my career.
Another one happened a couple of years later when I took on a position as an executive, leading external affairs for ARCO in Alaska. I was basically doing lobbying, politics, and PR work in addition to environment, health, and safety—all totally outside my comfort zone, especially the lobbying. It was a real change for an engineer suddenly carrying a lobbyist hat, but it caused me to think about things very differently.
A different mentor was part of each of those decisions. In both instances, they recognized those disciplines weren’t my forte but they gave me the opportunity to grow.
The talented YPs will eventually reach a point in their careers where they want to do something different, take on new things, or make a difference.
To retain them, we must respond to these needs.
We do this by understanding their career objectives, then assigning appropriate responsibilities or increased challenges when they are ready. We also provide relevant training required for their new or broadened roles.
Also, people want to be part of an organization that is making a difference. That’s why I spend so much time on our purpose, “Energizing the World, Bettering People’s Lives.” It’s something we’re truly trying to do, and I think that’s inspirational.
Inspiration and retention go together. We always try to make sure important things like compensation and rewards are competitive because we want to reward people; but, pay is just one piece of the decision.
People want to feel valued and make a contribution that has an impact on the performance of the company. It is also important that the company makes a difference.
You need a track record of accomplishment and a lot of experience because things get thrown at you every day from all different angles. The essential quality is a track record of making good decisions, because leadership roles are all about making decisions, not about calculations. My days of using a calculator and a slide rule are gone.
At the early stages of a young professional’s career, you may be tasked with creating recommendations for certain projects. The key is doing the homework—being thorough and keeping an open mind while you look at different options.
It is all about possibilities. My stand for this year is “limitless possibility”—so, even at this stage of my career, I am pressing myself to think of all things as being possible.
My advice is to take every opportunity to broaden yourself, learn new things, and be proactive. Don’t wait for opportunities to drop in your lap. Sometimes you have to cause things to happen. Voice what you want to do or where you want to work. By trying new things, you will gain proficiencies, build relationships, and broaden your experience. You should also take advantage of training. Technical training is important, but nontechnical training in communication and teamwork is very valuable to career development.
We are looking for young people early in their career with a good track record. We also look for team players who are good communicators, enthusiastic, and flexible. Most of the work here is done in teams, so these qualities are crucial. You can have the best technical person, but if he or she does not work well with others, the team will not be functional.
I think of independents as the companies that generally fully invest their cash flow in exploration and production [E&P] projects. Historically, that has meant they have done most of their drilling in the US. That seems to be the way things have evolved and how it continues to be today. Independents have often been the ones to take on the smaller projects and have left the big, high-risk, long-lead projects to majors. I think the role of independents is to get the E&P work done. In the US, certainly, a lot of that risk is taken on by the independents.
Noble Energy is a little bit different; We’re a blend. We operate US onshore projects typical of an independent, but we’ve also taken on large-scale multibillion-dollar projects similar to what might be in a major’s portfolio.
It’s not so much the view of shale but, instead, the view of technology. Technology has driven the development of shale. We always knew there was gas in the various shales, but we didn’t know whether it was commercially recoverable or not. Our view of technology has continued to evolve. Our first entry of any significance into the DJ basin was when we acquired Patina Oil & Gas back in 2005. At that time, the Wattenberg field was being developed with vertical wells. As horizontal technology has evolved, essentially all the drilling is now horizontal.
Entry into the Marcellus gas shale play through acquisitions demanded high asset prices, so we were a bit hesitant early on. However, with reduced commodity prices last year, we became more comfortable with matching the asset values with the opportunities. That led us to form a joint venture in the Marcellus that we’re very excited about. In my opinion, the Marcellus is one of the best shale plays in the US, and it’s in one of the best markets in the northeast.
We took a stand that we were going to get beyond the incident (that sparked the moratorium), and we were going to come out of it a better company. Our multidisciplinary team took a lead role in working with the government to build a permitting template that could meet the new requirements. We proactively worked with 24 other independent deepwater energy companies and Helix Energy Solutions Group in a shared mission to develop a completely new approach to deepwater spills. The success of this endeavor allowed us to lead the industry back to work in the Gulf.
For us, deep water is just a natural evolution of the technology the industry has continued to build upon. As we go into deeper water, it opens up basins and exploration opportunities not available before. What’s appealing about deep water is you can explore in areas with significant resources that have not been explored. The eastern Mediterranean and Falkland Islands are perfect examples of that.
Today, we have more opportunities than we have capital to spend. What I find most pressing in our industry is managing project risk. Big multibillion-dollar projects can face risks of overruns and poor performance. As an international company, we also have to consider political risk as we are dealing with many different governments with different views and policies.
Finally, what many in the public don’t realize is the price risk we take. In a very short period of time, the price at which we sell a primary commodity can drop in half. We’re seeing it with natural gas, and we saw it with oil during the economic recession of 2008. What manufacturing or retail business out there can survive their sales prices dropping by half overnight? It’s very few, and yet we do manage that.
At Noble Energy, we do it through a diversification process. Our portfolio is diversified geologically, geographically, and by commodity type. We help mitigate commodity price risks by hedging. We hedge up to half of our production for as long as 2 years to reduce volatility in cash flow.
We have a very clear pathway for growth that has been set up by some major discoveries we made over the past several years. When we look at the next 5 years, and perhaps even beyond, what’s really driving us is the development of these discoveries. When we look at our growth, we see our production doubling over the next 4 to 5 years through the execution of these major projects and our ongoing development of unconventional plays in the US Niobrara and Marcellus.
We have five core operating areas in the company: DJ basin, Marcellus shale, deepwater Gulf of Mexico, west Africa, and eastern Mediterranean. All these regions are expected to grow more than 10% per year over the next 5 years. We have exploration projects in our core areas and a new ventures program, which led to our recent Falkland Islands announcement. We also plan to drill in Nicaragua. These exploration programs will produce new projects that will become drivers in the more distant future.
I personally have been a member of SPE for a little over 25 years and have benefitted from the various programs and conferences. I also contributed to papers that have been published.I encourage our employees to get involved in professional organizations. They provide learning experiences, personal development, and great opportunities to network and build relationships.
Charles D. “Chuck” Davidson is Noble Energy’s chairman and chief executive officer. Noble Energy is an independent energy company engaged in the exploration and production of oil and natural gas since 1932. Noble Energy’s core US producing regions include the DJ basin in the Rocky Mountains, the Marcellus shale in Pennsylvania and West Virginia, and deepwater Gulf of Mexico. Noble Energy also has core producing regions in west Africa—in Equatorial Guinea and Cameroon—and in the eastern Mediterranean offshore Israel and Cyprus. Before joining Noble Energy, Davidson was chairman, president, and chief executive of Vastar Resources, a publicly owned subsidiary of ARCO, which merged with BP in 2000. He joined ARCO in 1972 and progressed through numerous engineering, managerial, and executive assignments within various ARCO subsidiaries. He holds a bachelor’s degree in chemical engineering from Purdue University and a master’s degree in management from The University of Texas at Dallas. Davidson is a member of numerous professional and industry trade organizations and is involved with several Houston community organizations.