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Bakersfield Californian: Aera CEO widely respected, has critics

BY VANESSA GREGORY, Californian staff writer
e-mail: [email protected] | Saturday, Dec 15 2007 8:15 PM
Last Updated: Saturday, Dec 15 2007 9:12 PM

If you ask the president and CEO of Bakersfield’s Aera Energy about his profession, he might say he’s a chemical engineer.

For Gene Voiland, the calling he pursued nearly 40 years ago as a Washington State University student still guides his work as the head of an oil and gas behemoth with annual revenues of almost $4 billion.

“My tendency is to look at something and say, ‘This is a problem that needs to be solved,'” Voiland, 60, said recently at Aera’s Ming Avenue headquarters.

The self-described “Sputnik generation guy” is retiring from Aera Energy LLC at the month’s end, capping a 38-year run in the oil business and a 10-year stint at Aera. He’s held the top post since affiliates of Royal Dutch Shell and Mobil Corp. (now ExxonMobil) formed the exploration and production company in 1997.

Over the past decade, Voiland kept Aera viable in a bitterly competitive and economically volatile industry. Outside of the office, he earned a golden reputation for working with local charities and schools to help kids succeed.

But the company and its CEO also have their critics, who point to an ongoing, 7-year litigation battle over Aera’s role in polluting a local farmer’s groundwater.

‘Petroleum industry giants’

Although Aera has deep-pocketed parents, its success was far from guaranteed, industry executives said.

Managing a joint-venture partnership can be tougher than running a publicly traded corporation, Western States Petroleum Association President Joe Sparano said.

Sparano ran a smaller joint venture focused on refining in the early ’90s.

“Gene’s running a company that has two of the biggest petroleum industry giants in the world looking over his shoulder,” Sparano said.

“There are a lot of people, including me, who are very impressed with the company’s success and with Gene’s leadership,” he said.

Les Clark, executive vice president of the Independent Oil Producers Agency, met Voiland in 1980. Shell had sent Voiland to Kern County after it acquired Belridge Oil Co. Voiland’s work ethic and no-nonsense attitude immediately impressed Clark.

“Even then you could tell he was going to be one of the good ones,” Clark said.

Within Aera, Voiland earned a reputation for measuring results by examining how departments meet their goals.

“What he really wants to know is, ‘What were the operational activities? Did you do those? And how well are they going?'” said Barry Biggs, Aera’s senior vice president, Belridge Asset.

“Gene was a stickler since our inception for that methodology,” Biggs said.

Aera has thrived during its first decade of existence — the company has 1,100 employees and estimates it produces about 30 percent of the state’s oil and gas. But Voiland is acutely aware of how easily oil companies come and go.

“You don’t see Texaco anymore, it’s now Chevron,” Voiland said. “You don’t see Unocal.”

Business and politics

Voiland seems to know survival calls for politics as well.

Last year, campaign filings show, Aera gave more than $32 million to fight state Proposition 87, a measure that would have funded the study of alternative energy sources by taxing oil producers.

“It would have put a tax on us which would have discouraged producing in California,” Voiland said. “And our policy as a country is, we want to produce as much domestic oil as we can.”

And, he acknowledged, “It was a very, very bad deal for us as a company, and we’re not going to take that lying down.”

In the end, Aera and other Proposition 87 opponents won a slim victory, with 55 percent of state voters opposing the measure.

Roland Hwang, a vehicles policy director with the San Francisco offices of the Natural Resources Defense Council, argued that producers in California already pay low taxes compared with major oil-producing states such as Texas and Alaska.

Eventually, California needs to seek alternative energy sources, Hwang said.

“All Californians would appreciate (oil companies) moving towards a more cooperative place at the table,” he said.

It wasn’t the first time Voiland grappled with politics. Several years earlier, he was chairman of the board for the Western States Petroleum Association, a trade group.

“He turned our organization upside down,” said the group’s Chief Operating Officer, Cathy Reheis-Boyd. Voiland moved the organization from Glendale to the political hub of Sacramento, she said.

“He just noticed that we needed to become the most politically relevant trade association for petroleum in the West,” Reheis-Boyd said.

His knack for strategy left its mark on Reheis-Boyd, who later changed her wedding date three times so Voiland could attend. And when she asked her mentor for his insight on business management and leadership, Voiland eventually gave her a box of carefully filed notes.

Like a true engineer, Voiland had been meticulously recording everything he learned in his career.

The architect

Voiland’s belief in records and tangible results has endeared him to the school officials he worked with to create Ready to Start, a free pre-kindergarten program.

Ready to Start has a structured curriculum meant to prepare kids for their first year in the classroom.

“Gene is so highly respected and so well thought of,” Rosedale Union School District Superintendent Jamie Henderson said. “He not only stepped out and helped to bring together educators and business leaders, but he sought out funding as well.”

“I would say Gene is one of the architects of that program,” Henderson said.

Ready to Start began in the Rosedale and Greenfield Union school districts three summers ago. Now about 800 kids in four districts go to Ready to Start.

Professional teachers work with kids, using state educational standards to help them gain school skills. Kids and teachers are tested to measure performance.

But Voiland had a different idea in mind when he sought to improve education in Kern.

Voiland was among a group of community members who wanted to bring an engineering school to Cal State Bakersfield. When they discovered the region lacked enough students with the background to fill an engineering program, he asked Kern County Superintendent of Schools Larry Reider what might better prepare students to become engineers.

“It came down to kindergarten,” Reider said. “We talked about the need for a child to be ready to learn.”

Voiland recalled, “We said, ‘Wow, that wasn’t the answer we were looking for.'”

But he followed through, and the CEO is now well-versed in the needs of pre-kindergartners.

“If you ever go see 15 41/2-year-olds on the first day, that is the definition of chaos,” Voiland said. “They’re not social at all. They don’t know what to do. They don’t know how to interact with anybody. But in five weeks they learn how to do that, and they’re amazing in what they’re able to learn.”

‘They knew what they were doing’

Voiland has his detractors, too. One is Kern County farmer Fred Starrh, whose view of Aera isn’t exactly rosy.

In 2004, a jury concluded Aera had allowed about 600 million barrels of wastewater, an oil production byproduct, to seep into the subsurface of Starrh’s farm and harm the water basin.

Starrh was awarded $7 million.

Starrh said the contamination was no accident, but part of a deliberate decision to prioritize profits over water stewardship.

Testimony showed Voiland was in the middle of that decision-making process.

Contacted Friday, Aera spokeswoman Susan Hersberger said Voiland was unavailable.

“This case involves operations that ceased a year and a half ago,” Hersberger wrote in an e-mail. The company has consistently disagreed with the plaintiffs’ allegations and values its reputation as a good community citizen, she wrote.

Aera may be ordered to pay greater compensation when a jury reconsiders the award at a new trial likely to start next fall, according to Starrh attorney Ralph Wegis.

Jurors will be instructed to calculate damages based on the profits Aera reaped when the pollution was permitted, he said.

Starrh imagines Aera will appeal the case indefinitely.

“I guess they think we’re just out for the money,” Starrh, 78, said. “But it’s not that. It’s that they knew what they were doing out there.”

Golf and gardening

Aera’s new CEO, Gaurdie Banister Jr., came to Bakersfield from a Shell operation in Singapore. Banister is working with Voiland until the end of December, when Voiland retires.

In retirement, Voiland plans to stay in Bakersfield and continue his community work. Along with Ready to Start, he’s a longtime supporter of R.M. Pyles Boys Camp, a summer program for at-risk boys and a traditional oil charity.

He and his wife, Linda, enjoy golfing and a cabin at Alta Sierra. Voiland loves to garden.

“It will be very different to kind of have my own schedule that I get to plan to, rather than things that I have to do,” Voiland said. “I don’t understand what that is because I’ve never really done that. But I’m thinking it has a pretty good ring to it.”

Voiland insists his CEO days are over, but his friend Les Clark expects he won’t disappear from the industry.

“As much time as he put in the oil patch?” Clark said. “I won’t say we might not see him back.”

Aera Energy by the numbers

1,100 — Number of workers employed at Aera.

30 — Percentage of California’s oil and gas produced by Aera — more oil than is produced by the state of Oklahoma.

$4 billion — Approximate company revenues in 2006

1,000 — Wells drilled each year by the company.

185,000 — Barrels of oil produced by Aera each day.

Source: Aera Energy LLC

http://www.bakersfield.com/hourly_news/story/312080.html

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