You know that slightly vulgar Q&A ?

Question: “Why do dogs lick their balls?”

Answer: “Because they can”.

Its pretty much a metaphor for the corporate world for much of the  time:

Q:  “Why do bankers pay themselves large bonuses?”

A: “Because they can.”

– and so on.

It is the “Because they can” imperative which helps us understand why heating oil costs have gone up by 50%  or more in recent times (see graph):

Oil is often the only choice for many in rural areas without connections to the Natural Gas grid. It is usually Kerosene and sometimes Gas Oil – both middle distillates from the refining process. Because the rates of duty applicable to heating oil (as compared to road fuel) are minor there should usually be a close correlation between the ex-refinery cost of the oil and the crude oil price. In August (the low point on the graph) heating oil cost  domestic customers 40p a litre. Today it is as much as 70p a litre – a rise of up to 75% . Over that same period the price of crude oil  has gone from $76 a barrel to $86 a barrel – a rise of only 13%. British consumers pay for their heating oil in Sterling so we have to allow for the change in the £/$ exchange rate when making comparisons. In Sterling terms the price of crude oil per barrel has gone from £48.5 to £54.8 – still only a rise of 13%. read more

Risteard Ó Domhnaill’s documentary film about the Corrib Natural Gas project in County Mayo Ireland, The Pipe, has been quite a long time in the making – but the wait has been worthwhile. This is a moving, unsentimental and compelling story well told and, particularly, well edited (by Nigel O’Regan) of how ordinary people in a remote community fought with a multinational company, Shell, to protect their community and their livelihoods. The public release of The Pipe is timely in the light of BP’s Deepwater Horizon disaster in the Gulf of Mexico because, as with BP, the evidence is clear that Shell’s initial handling of Corrib showed a comprehensive failure to match the rhetoric of their public statements with the reality of their actions. BP’s “green” positioning was shown to be a chimera as the world greatest environmental disaster unfolded in all of its horror – and Shell’s stated commitment to Sustainable Development has been shown in The Pipe to be no less of a veneer. read more

One of the problems with having spent most of my career in the oil industry is that it was a far too rational world – or liked to think that it was. There were lots of engineers, geologists and accountants to explain to you that managing was about input-process-output. In other words you came to proper business judgments by making sure that you had the right resources (the inputs); handling them properly (the process) and doing the right thing with the products of all this effort (the outputs). Business was a machine and the better designed and oiled and maintained that machine was the better you would do. But my world, the world of brand management, was less certain – much less actually. In promoting a brand you are only partly appealing to rational man – you are also appealing to emotional man and emotional woman. As David Ogilvy once memorably said “The consumer is not a fool – she is your wife”.
To read more follow the link read more

A year ago I called for the departure of Sir Peter Job as a non-executive director of Shell.

It has taken a full year for the media at large to realise just how unfit this man is to oversee the remuneration of Shell’s top executives. But whilst the buck undoubtedly stops on Job’s well-padded shoulders the remainder of the non-executive directors cannot escape responsibility for the debacle that is shareholders rejection of the remuneration proposals for Shell’s high-priced (very high priced!) help. Let’s name and shame them. Jorma Ollila sits at the top as non-executive Chairman. Why didn’t he call for an end to the excesses of the past and instruct Job to take public opinion in these difficult times into account? read more