Posts Tagged ‘Safety’

Mike: A great resource - many thanks!

Guest: Interesting suggestion from Business Week...however, Shell might not be able to come up with the necessary finance, while BP might just be able to do so.... the question then becomes whether Total would be willing to act as a white knight to save Shell from BP's clutches.

Paddy Briggs: hollymp Email me at paddy_briggs@yahoo.co.uk and I'll be pleased to help you.

hollymp: Hi, really great site. Im currently doing a piece of work for my degree regarding the effectiveness of Shell's communication functions, both Internal and External. I would be really gratefull if someone could provide me with any expert information or guidance on where to find any good literature. Thanks.

Iain Percival: Dear Fellow Pensioners (includes you too Paddy as we are all in the same boat!)- I have a couple of (final?)comments. To pick up on the "right on the nail" comments from fellow pensioner the real scandal in Shell EP has been the departure from the tried and tested practice of only having people at the top (leaders) who actually knew the nuts and bolts of the EP business. This started with the disastrous decision to appoint Cor (if you need geology go to Schlumberger) Herkstroter to the top job. He oversaw the destruction of a E&P organisation which was second to none, the envy of its peer group and a source of pride to all of us working in it. This massive error was compounded by importing huge numbers of US staff totally clueless as to the way the business worked in the many operating units of the world and were typified by an astonishing focus on their year end performance bonus requiring a declaration of success long before the "final result" was actually known. The modus operandi quickly became one of preaching from on high, intolerance of questioning (it's my way or the highway) and a continual reference to a number of "management guru bibles" - US author only, please. (We were not to know then, but it was all terribly prescient of the US Iraq misadventure). Remember, Mission Accomplished - all Hype, Hypocrasy & Hyperbole with Honesty and Humility totally absent. PE (petroleum engineering) became Powerpoint and Excel.The virtue and necessity of time consuming solid technical work became a luxury the company could not afford! Ten years on a massive effort has been expended to recover the situation - but of course in the meantime so much has been lost. That is the real scandal. I will never be an apologist for the truly dreadful Watts and his acolytes but in my more generous moments I honestly believe they did not fully understand what they were doing. I once asked him not to use the expression "economic reserves"; by definition reserves ARE economic and the look he gave me was one of "what on earth are you talking about?". I will leave the matter there but continue to grieve for the company that lost its way.

a fellow pensioner: Iain Good analysis but a bit lopsided and I must react! Of course you are totally correct that the SEC was way behind modern technology and is now making some amends. But to conclude that Shell EP has been an industry pathfinder and somehow the whole world has erroneously dumped on Shell goes a bit too far. I know you very well and I am convinced that your words come from your heart and were not drafted by some Shell PR spindoctor. But you know that we started to lose the battle around the mid 90s on technology development. Until that time we were very good at inventing new technology, a bit less at implementing it quickly and globally and we dithered perhaps a bit longer than really needed. And our internal bureacracy could also be a bit improved at that time. And we were by far the biggest operator in the world and as such earning the money for many of our competitors. We outperformed many (most?) from the early 70s to the mid 90s. But after the mid 90s, all had to be changed in a major way and we lost basic business controls and created a new attitude in the workforce whereby short term views prevailed, promise was better than performance, open communication was a thing of the past and the ensuing cultural revolution led to many disasters. The breaking of SEC rules was just one of them and in my view a minor one but this point was magnified by everyone. It was fodder for the lawyers and easy to find a culprit that could be sacrificed. But there was something bigger going on behind the scenes, less obvious to the general public. We all know (and you certainly better than anyone) that companies like Schlumberger have a lot more know-how and technology development than we have. They ‘stole with pride’ our systems and enhanced them. And then they applied them too! With all the internal turmoil and american political correctnesss flying about, we lost focus and have forgotten how to find and develop new oil and gas in an economic manner. We lost the ability to consistently do giant projects well. Very few are on time and within budget, certainly not 50 % over and 50% under the objectives. You know that the personal greed has exploded and there is little coherence in the company anymore. We used to have the top people near the coalface, now we have a small group in the headoffice and many processes. But we have no real feel of the local conditions anymore. But having said all this, you are right again that the SEC now themselves should be doing some major ‘mea culpa’ for not overseeing the real criminals in the finance world. Our beloved leader of the past, the borne again christian Philippus Watts, would have made a great investment banker. And he will still occupy a seat next to the likes of bishop Mugabe in his afterlife. And it will be hot there! He was like the present bankers who sold crap and did not even want to know what was in the boxes they sold. It all tumbled when someone opened a box and saw it was empty. In Shell that someone was v.d.Vijver or perhaps Coopman. And like in the finance world it was the messengers that got sacrificed! Apologies for the long reply, but some very bad things happened (and are happening still, just check with your dutch colleagues who are retired and how their pensionfund has been doing) and these things should not be swepped under the carpet. And I wish you and all the readers here a very healthy and prosperous 2009 and hope the Donovans continue with this fantastic forum of REAL open discussion. But I still fear Shell, so I shall remain anonymous!

Paddy Briggs: Iain The reserves issue was a scandal not because there was confusion about the categorisation of hydrocarbon reserves. It was a scandal because at the very top of Shell there were lies, cover ups, disingenuous public statements, obfuscation and deceit. The revelations about all this led to further disclosures about the management style of Phil Watts and others in the command chain. Those of us who worked for Shell in the Watts era were not surprised at what emerged – we knew him and some of his cohorts for what they were. It was a scandal alright!

Iain Percival: Dear Guest - I have no problem with your comment; infact I agree with it. The SEC "uniform set of rules" to which you refer will now reflect the technologies and techniques of the 21st Century instead of those of the early part of the second half of the 20th. All EP companies will estimate and report accordingly - to the ultimate benefit of the investor community. As I wrote in my previous posting this notable advance is a direct result from the trials and tribulations of Shell and the so-called great reserves scandal. I use the term "so-called" because if all the volumes recategorised had vanished like the money of those investing with the unsupervised, unregulated Madoff, the word scandal would be justified. However the volumes have not vanished inspite of the tsunami of bogus indignation which washed over the company and the many affected employees. I wish all who contribute and read the contributions on this site a very Happy and spite-free New Year

Alek: Hi. Good site.

MUSAINT: Have to generally agree what Iain has said, some of which I have voiced earlier. I never realized that the SEC rules for reserves calculation were just for company to company comparison. If true then what a idiotic group the SEC are and the reason why companies such as Shell got nailed with the reserves scandle in 2004.