Could boards of Majors or E&Ps find oil & gas or develop it?

Domain Knowledge…..

A few weeks ago I made the point that folk who are trying to sell software, technology and services into the oil & gas industry would do better if they had domain knowledge, a deep understanding of the industry acquired through personal experience.

Have you read Luke Johnson’s Sunday Times article “Could Whitbread’s bosses make a frothy cappuccino?” – remember Whitbread own the Costa brand of coffee houses?

He is highlighting the farce of many listed companies, big and small, having entire boards where nobody has (domain) knowledge of the relevant industry.

I really recommend that you read it, he makes many excellent points, including the possibility that corporate failure or poor performance may be a consequence of a board’s lack of domain knowledge.

Perhaps you think that things or not so bad in the oil & gas industry?

Well, I was going to highlight for you the lack of relevant experience of some key players in a dozen or so well-known oil & gas companies, chairmen, CEOs, CFOs…….but my first draft was getting too personal!

So let’s try something else:

Do you think that the poor performance over the last several years of:

1.      Exploration – this is a review of merely the latest poor year, 2016, and/or

2.      Development – projects are oftentimes either way over budget and/or late and/or do not deliver the promised production profile, sometimes all three,

is anything to do with the domain knowledge of boards?

Of course they perform well in taking on lots of debt and rewarding themselves handsomely but that is another topic!!