Are Oil Companies Myopic?

In my earlier blog, I pondered if Oil Companies are myopic. I recently read an article titled Innvovation Killers by Clayton M. Christensen et al in HBR. The authors write how financial tools like NPV, DCF etc destroy the capacity to do new things.

The argument is using these traditional financial tools how confidently can we judge an innvoation that requires considerable investments. One of the arguments they make is towards the focus or emphasis on Earnings per share (EPS). They highlight that current Prinicipal - Agency relationship of companies encourage for ever increasing EPS which is nothing but myopic focus on profits at the expense of long term value creation.

This , in my belief, is what is happening with the Oil industry.

Personal Impact in Communication

As part the EMBA at ESCP Europe, I took the "Personal Impact in Communication" elective. Some of the objectives for the elective were

• Help one give strong impact to his or her communication
• Help one improve their relationships with others
• Help one deal with their emotions when they communication
• Help one deal with unexpected communication situations.

The elective or maybe I should say workshop was facilitated by Marc Geraud, a trained actor, professional coach and trainer in communication.

I learnt some intresting facts about Communication and why do we feel stressed and shaky before and during a presentation in front of an audience. It has to do with our (human) primordial behaviour or to put in simply the way we are programmed as humans.

When facing an audience we feel stressed and wanting to be some where else rather there, because our primordial reactions cause increase in adrenalin & Cortosins in our bodies. These two harmones helped our ancestors to do FIGHT back or run away (FLIGHT) from looming danger. These invaluble reflex actions that helped our acestors also kick in when we face an audience. So, the trick, I learnt, is to know about this and the fact that it is but natural. Then later to try and control or over come this.

We learnt some techniques to overcome such situations invoving breathing techniques and preparations before facing an audience.

We all work hard on the content of the presentation, but apparently this is only but a small percent of the whole presentation. More important elements are body language, the way we deliver our speech, the way we connect to the audience (or the lack of it).

I have learnt quite a bit from the workshop and hope to work on it to improve my communication skills. I would also recommed such workshops to others looking for career in leadership, having to face audiences.

Is the Oil Industry Myopic?

Now that the Oil prices are below 50USD per barrel and the uncertain future of the oil prices, most of the Oil comapnies are talking about cost cuttings in Capital expenditure as well as other areas like ICT expenditure.

I wonder if the Oil comapnies are myopic, in terms of cutting costs and stopping recuritment when ever the oil prices drop. It is a known fact that most of these Captial expenditures will in future have to be done anyway to bring new reserves online or extend the life of existing assets. Would the cost of production and marketing be more than 40 USD per barrel for many of the new developments and the modifications being carried out currently, which have been put on hold or will be soon?

If we look at what happened in the last decade when the oil price dropped to 10 USD, most of the recruitment was stopped. What did it lead to; critical shortage of experienced young engineers to replace the retiring workforce. Is this not but Myopic?

It will be intresting to see what happens with recuirtment now with know facts of skills shortage and appx 40 USD price.