Episode Transcript
[00:00:00] Speaker A: Start with what drives value, and then let's go after the things that matter versus trying to boil the ocean and go after everything.
[00:00:05] Speaker B: It's less about renegotiating your rates. It's more about looking for ways to be more creative and reroute and recycle and find value that way.
[00:00:15] Speaker C: Welcome to the next Imperative, a podcast hosted by A. M. Energy leaders tackling key issues and trends in the industry.
[00:00:24] Speaker D: Welcome back to the next Imperative. I'm Jeff Angulo, your host and moderator. On this episode, we're going to continue our integrated oil company series with a discussion about international business unit transformation. Joining me in this discussion are energy industry thought leaders Renee Klimzak, Nick Carnwright, and Riyadh Nasser.
Riyadh, Nick, Renee, welcome to the next Imperative.
[00:00:47] Speaker A: Thanks, Jeff.
[00:00:49] Speaker D: Well, let's jump in on the last episode. We talked about how the energy industry landscape has been shifting under consolidation, the need to grow supply, lackluster exploration performance in recent years, and portfolio optimization.
In your view, how can the IOCs effectively navigate through these waters and create value given their global footprints? Riyadh, do you want to start us?
[00:01:13] Speaker B: You know, the first thing that comes to mind, particularly when I think about the sort of need for consolidation, is that the IOCs have the benefit of sort of significant balance sheet, as well as a number of operating assets around the world. So they really have the option to optimize their portfolio by looking for assets that have long term strategic value and benefit for them and maybe invest either for organic growth or inorganic growth, whatever it is. Conversely, they may look for assets to get out of and to create some cash flow and to move out from. Maybe it's a marginal well environment, maybe it's sort of a high regulatory complexity environment, whatever it is. So portfolio optimization is one of the first things that comes to mind across the portfolio. And then within business units, there may be opportunities to make improvements and whether they're going to sell or whether they're going to hold or whether they're going to grow, those opportunities are there. And it's typically around capital, efficiency and base business as well, and looking for ways to create value within the business unit. So a lot of the smaller companies may be sort of all in, in one particular base and some of the large independents, but the IOCs really have a lot more to work with.
[00:02:37] Speaker A: Just to add to that, the portfolio piece has gotten a lot more complex. Like you have new energy businesses and a lot of these companies and how far do you lean into those investments? Right. We've seen some of the european IOCs, as an example, take kind of a divergent path from what we've seen the US IOCs do, and then maybe a bit of a change of direction back the other direction now. But if you think about it, what's an IOC trying to do? It's generate returns, generate cash flow, and make sure that they have a sustainable business. But how you allocate capital and prioritize your efforts amongst those three priorities isn't simple. Right. But kind of keeping the pressure on cost, on margin, on value, versus going back to chasing growth, whether that's in electrons or barrels, is easier said than done. But I think so far we're doing a decent job as an industry.
[00:03:29] Speaker E: Yeah.
[00:03:30] Speaker F: And I think just to add to that, there's no real footprint for exactly how this should track, and the ability to be nimble and to recognize when maybe your strategic direction isn't quite right and to redirect and correct course, or course correct is really important to do. So I think more of that. We'll be looking for more of that rather than less. Whereas in the past, traditionally the future has been a little clearer in terms of the products and gas versus oil, et cetera, now with renewables entering and the whole transition, it's just a lot less certain.
[00:04:14] Speaker D: Great.
Renee, how well do the IOCs manage portfolio optimization? How frequently do they look to make those decisions?
[00:04:23] Speaker F: Usually there is some type of cadence and say more annually to revisit the portfolio. But linking back to a question we talked about earlier around the strategies and the ability to be nimble and adjust and course correct, I think even more important that you revisit the portfolios often and also have a clear process so that you do it consistently. You have criteria you're looking against, and always be driven by value and be willing to make the hard decisions when it's time to divest. I think in the past, what I've observed and having worked in a lot of these iocs is there has been a reluctance. Possibly there's more of a reward for acquiring, and people feel less confident about divesting, but clearly that has a role to play as well. So managing that actively is going to be critical.
[00:05:25] Speaker D: Absolutely.
[00:05:26] Speaker A: There was a period there where it seemed like we were kind of hoarders as an industry, where we didn't want to give up anything because we might need it one day. And then I think we kind of got over that, went through an active divestment cycle, got rid of a lot of assets that didn't compete for capital as an industry, which was healthy.
But now everyone's starting to worry about returns are still in focus, but we're also worrying about resource life and where's the growth going to come from over the medium term, especially as hydrocarbon demand doesn't appear to be going anywhere.
So we'll see if some of these companies now get back into that mentality of like, we need more in the cupboard versus this divestment process that we've been on for the last few years. So I think it is a bit of a shifting tide here.
[00:06:10] Speaker B: Yeah, I think taking a returns focused view sort of across the portfolio is where everybody needs to be. I mean, even making returns focused decisions within a business unit is something that the entire industry isn't totally bought off on. I think that some folks still have production and EUR in mind. I think that that's something that they've been moving away from and progressing out of. But maybe there's still a little bit of room to go, you know, making returns focused decision on capital dollars and thinking about it in terms, you know, what's my capital spend? What's my forecasted opex to support that? What's my sort of takeaway costs around GPT, et cetera? And then what kind of production am I intending to get out and over what time period? Because production on the long term isn't what we're trying to optimize for either. So, I mean, all of those things should really come together.
[00:07:01] Speaker D: Right? Nick, thinking strategically, what have you seen the IOCs do in terms of what are the considerations they're facing when they're trying to decide am I going to core up or am I going to go more on a divestment strategy? How have they been thinking about it?
[00:07:15] Speaker A: That's a good question.
I think what you're trying to do is create optionality, where if you divest that business, if you core up around that business, or you just operate that business, either way, you're trying to maximize margins, maximize returns. So you're creating optionality for yourself by running it as efficiently as you can. So I guess before you kind of get into that buy or sell decision, it's just how do we get the most out of this asset? Which is what we see most of our IOC clients focused on, is margin enhancement. Five years ago, cost was in focus. Now it's margin per barrel, margin per boe. And that's all in margin F D costs, development costs, as well as operating costs and GNA.
So regardless of what you want to do with the asset long term, let's maximize value now, and if you sell it great, you get a better price for it. If you don't sell it great, it's a better performing asset that might now compete for capital within your portfolio. So we see clients kind of taking the long game of regardless of your long term plan for it, let's maximize value now.
[00:08:15] Speaker D: I like it. The next question, really, I want to look at it in two parts. It's what are the levers IOC should be considering when looking to drive value? First in a divestment and then know in a growth strategy or growth scenario. Riyadh, you want to start us off?
[00:08:29] Speaker B: Yeah.
Well, if you think about a divestment, you've got a sort of shorter time window to make an impact. So you're going to focus your improvements and your levers on rapid improvements. And there's a big cost reduction component of that where you're basically starting off with some cost assessment or benchmarkings around the major cost categories against peers, and then you'll look for ways to drive value, basically stopping on some of the expenditures that you don't need to be continuing on with renegotiating rates. Even from an organizational standpoint, there are some full time positions and some contractor positions as well that you can optimize and right size that are not going to impact the business in any sort of a significant way. So there are some rapid improvements that you can do there. You can also accelerate near term production and you can tweak your artificial lift strategy to bring production forward in the next twelve years, twelve months, as opposed to trying to optimize over a longer term program.
Those are just a couple of ideas of the types of things that you can do when you think about more long term. And if you're going to hang on to the business unit and grow and invest over time, you're definitely going to do those things that you would do in a divestment, but you're also going to tackle more complex and long term initiatives. So you may swap out or optimize your systems. You may take some process improvements that are a little bit more significant, that require months and maybe even a year to sort of train up and implement, reestablishing roles and responsibilities for a particular and bringing in automation and technology. I mean, those are more long term changes that you might do.
I've seen us cross train lease operators to take optimization into their purview. That's not something you would do if you were trying to flip a company or flip an asset in the six to twelve month period. But that's something that you would do if you were looking to make more long term changes.
You might also right size your equipment. That's a little bit of a more sort of a painful or longer term effort.
The list goes on. There's a lot there. But certainly on the divestment side, you would look for things that you could get value out of in a six month period and then take the valuation multiple on that sale.
[00:11:02] Speaker D: Quick wins to get the sale value.
[00:11:04] Speaker A: And I think you hit on something important. Riyadh, you said look for ways to drive value, which step one there is what drives value in each asset. Because it's different, right? You have some assets where their role in life is drive cash flow. You have some assets where their role in life is growth or resource life. So trying to start there, what drives value for each asset?
And similarly, not all assets are equal. If I'm a non operated partner with a 40% working interest in a high tax regime, a dollar of Loe or opex reduction only goes so far, right? Because I apply my working interest to it, I back out the tax regime impact.
And it's a painful way to get value versus focusing on top line as an example, or on your capital costs, right? So start with what drives value and then let's go after the things that matter versus trying to boil the ocean and go after everything.
[00:11:56] Speaker F: For me, especially for organic growth, it's about leveraging what you have to the extent possible. So debottlenecking where possible, perhaps upgrading existing facilities or repurposing rather than building new.
[00:12:13] Speaker E: I think those things are even more important than ever. And the other one that's in that same theme is really extending the life of existing facilities, really trying to invest to get the most out of them without obviously throwing good money after bad. And that's sometimes a tough call. But what we're seeing, I think it's prudent. Clients are more and more looking harder at assets that may be toward the end of their life, and what can we do better and different to extend that and to get more out of it?
[00:12:49] Speaker A: And we're seeing a lot of that in markets like UK North Sea, for instance, right now, especially post EPL windfall tax, where operators are looking, how do we do this radically differently than we had historically? These are late life assets that need to be run differently.
[00:13:05] Speaker B: I like the point that you made earlier about the sort of cost and getting the cost versus the impact. And it really sort of needs to be looked at on a net basis. Right. To the operator, because I like the example that you called out about the sort of high tax regime they really need to sort of operators really need to understand how much is this going to cost me at the end of the day, and what value am I going to get out of it on a run rate basis and then also on a valuation basis.
[00:13:33] Speaker D: Renee, how can the integrated oil companies effectively transform the performance of their upstream cost structures to increase margins? And this 1 may be, for all of you, easier to describe in examples of what you've done in the.
[00:13:47] Speaker E: So, you know, I think we've touched on quite a mean in particular for upstream assets you mentioned.
I think the devil's in the details.
Start with understanding what really drives the value and how to measure that. Come up with the metrics that you want to use and to drive that to deliver the benefits and really stay with that through the process of all the changes, et cetera. So look for what we need to do to add more capacity or get more value out of what we. So, you know, I think you've got to be able to set the objectives and then to measure it. And everything you do, every investment you make needs to align with. So that's. I'm a big proponent of those aspects.
[00:14:42] Speaker A: And Renee, just building on that, as an industry, we're very good at setting a plan, achieving a plan where we're a little more guarded, as in what's our aspiration like longer term, forget about the plan. That's our duty that we're going to deliver next year. But the aspiration of what's possible for this asset, regardless of the asset, and being willing to share what that aspiration is and then form the plan to get there, we're not so good at that part of it where we focus more on what we're going to sign up for and what my boss is going to hold me accountable to versus let's get the aspiration out there and figure out how to go get that target.
[00:15:20] Speaker B: I like that there's so much complexity. Whether you're going after capital dollars for value or operating dollars for value or even transportation, there's sort of different levers to pull. I mean, capital efficiency, for instance, there is value. And again, depending on which strategy you're going to choose here, the way we think about that is there's an efficiency sort of lever do it faster. There's a design lever do it differently. There's a commercial structure lever, which is do it cheaper. And it really sort of depends on the situation. But I think you need to look at all of those things together to look for opportunities. I mean, the way we would approach something like that and sort of start off, as Renee mentioned, let's dig into some metrics and see how you compare to other operators that are exactly where you are.
Do some normalizing to make sure that we're apples to apples and then look for the opportunities and then really sort of get in the details and bring operational insights to see what's driving those gaps and how they can be corrected. And that's the quick and dirty on the capital side. Operations may even be a little bit more complicated. The dollars aren't as big, but it is a little bit more complicated because there are so many different people that manage those dollars.
But ultimately it's understanding.
If you think about sort of an loe per boe, the costs are in the numerator. You have to understand all of those. But then you also need to understand ways to influence the denominator. So it's again starting with benchmarks, but then moving on to understanding artificial lift mix and other things.
You can begin to make recommendations on how to bring down those costs. How to right size. It used to be more of a rate game. I think now it's more of a volume game. If you think about water, it's less about renegotiating your rates. It's more about looking for ways to be more creative and reroute and recycle and find value that way. Compression, it's not about rates anymore. It's really about right sizing and making sure you've got the right horsepower. But then when you get to the denominator, it's really around finding ways to reduce downtime and kind of pull the work over lever. You've got capital dollars that you're competing with there. But all of that to say, there's a lot of complexity and there are a lot of different levers that you can pull to find value.
[00:17:49] Speaker D: There's no one surefire way to do it. Lots of opportunity and waste that are unique.
[00:17:54] Speaker E: Also, I would add, don't forget about the commercial aspects as well. It is about cost and getting that right. But also what we're seeing more and more of is the optimization across the commercial value chain and how to do that better. And today, with the data analytics we have and all of the great tools at our disposal, there's a lot more transparency throughout the value chain and understanding how what you do in one piece of the business has a flow on impact and we're given the prices that day.
What is the best way to run that asset. What is the best way on your commercial arrangements if you're a midstreamer to buy and what type of products and the ability to be able to be flexible and nimble and have optionality in your commercial agreements is an imperative. And that's one of the other key areas, I think in getting the most value out of your assets.
[00:18:56] Speaker D: Riyadh, how can they ensure that the cost transformations they put in place are sustainable and that they're actually delivering long term on the value expectations?
[00:19:06] Speaker B: Sure, always a challenge.
The worst thing that could happen is if we get involved or if a company handles their improvements on their own. When that improvement team leaves, everything falls apart. That's kind of worst case scenario.
So it should be, first of all, a continuous improvement process.
Whoever intervenes to make these improvements needs to also leave behind a process to make sure that sort of continues and it is refreshed on an ongoing basis.
[00:19:40] Speaker D: So a big change management component, not only to how you're doing it, but.
[00:19:44] Speaker B: To ensure that you absolutely, and really the IOCs need to sort of build that in to their operating model to continue to look for ways to improve. Because I mean, a lot of the times the improvements will come from outside, but there are so many good ideas inside the organization. They just often aren't facilitated and sort of teed up to be implemented. So putting that process in place is a part of the game also. And these IOCs, the way that they have evolved to be structured is often they sort of organize them by asset class, whether that's deepwater or shale and tight or sort of LNG, what have you.
A lot of the organizations have organized their business units into those groups. And when people move around, and they often do within those organizations, they may stay within those asset classes, because from a technical standpoint, there's sort of lots of relevant skills to move from one business unit to the other. So I would say another sort of point is that once you go into a business unit and you establish these improvements, it's critical to feed those to that asset class, which is typically a centralized organization, and make sure that it gets disseminated to the other business units and also use that central organization to provide some accountability to making sure that the targets are actually met per the plan. So those are just a few ideas.
[00:21:14] Speaker A: Just one thing I would add to that is we see cyclical margin enhancements and we see structural margin enhancements. And I would say for a lot of the last five years, there was low hanging fruit and enough to do in the cyclical bucket that's where a lot of our emphasis was. So rate renegotiations, some changes to the way we work, but it was largely commercial in nature. Now that's gotten harder, frankly, where we're having to dig deeper into true structural change. So changes to the way we work, changes to the way we engineer things, changes to the way we consume products and services, changes to the way we partner with vendors. So it's more comprehensive, I would say, and it's going to be stickier in terms of the value that we drive, but it's also harder for us, frankly, and for our clients.
[00:22:00] Speaker D: Nick, what can the IOCs learn from some of the smaller players?
[00:22:04] Speaker A: I think there's a lot they can learn from the independence. We've seen real life examples, right, where an IOC divests an asset, an independent buys it, and an independent gets remarkable paybacks because they were able to run it differently than the IOC was.
At the same time, we work with a lot of independents that frankly aren't as great operators as we see our IOC clients be. So you have to be careful what you ask for there.
But I do think there are characteristics of independence that the IOCs can and probably should emulate. Some of those are like, let's not be a shadow operator when we're the non operator. We can staff things differently. And that's the way an independent would do it, stripping back some of the bureaucracy that began as well intentioned programs. And now I've kind of gotten out of control in a lot of these companies, and we've seen companies try to unwind some of that over recent years and then just the way we design things, right? Like if you look at some of these projects that were sanctioned in the mid 2000s versus how you design them today, radically different, where back then it was, let's squeeze every last percentage point of returns out of it on paper.
But probably gold played it like crazy in the process of trying to do that versus now you're value engineering everything and doing it differently, which is how an independent would think about it, right? They don't have the time or the resources to even try to do it the way an IOC would have historically.
So those are some of the ideas, but I think maybe more fundamental than that is put decision making in the hands of the people that are closest to the action, who have the information to make decisions versus trying to control everything centrally. And we've seen some of the IOCs probably swing the pendulum too far, where it started as some level of technical assurance, but ended up as replicate and question the decisions that are being made in the business, which wasn't healthy either.
[00:23:55] Speaker D: Right.
[00:23:55] Speaker A: So I think those are some of the fundamental.
[00:24:01] Speaker B: You know, a point that kind of brought to mind was an IOC company is not going to really have the ability to create all of these fit for purpose designs. They've got too much scale and they really have to kind of move to a shorter, call it, number of derivative designs. Whereas an independent, they're more nimble, they've got less scale, they're not quite doing as much. So they can afford to try things and break out of those standardized designs. I think in the past, standardization was the trend and the way to go, and certainly it was useful for that time period. But since then it's evolved and a lot of companies are changing and they're changing their designs right now, whether those are completion designs or even facility designs, that is a large source of value.
We find that the independents are a little bit more aggressive. They can do it more quickly. They've got more appetite to take risks. That's all very true. And I think the IOCs can really learn from that because they're just a little bit more at the forefront of that creativity. And so they can take it inside and feed it to their engineers and so on, and then they can move into those more creative solutions.
[00:25:28] Speaker E: So, riot, I want to clarify.
You use standardization, but I think you might have intended to say, in my experience, the IOCs have customized, not standardized. They've customized their solutions and their engineering standards. And I've been told by some of the oilfield service companies that's the single most costly thing in the industry, that if we as an industry could move to more standard valve sizes. Right. Every valve doesn't have to be unique to a plant or to a company.
If as an industry we could move to more standardized sizings. Right. And consistency across countries, across the globe, that would be probably the single most important thing we could do to reduce costs. So that was just my thought as you were talking. The other one that came to mind is around overheads. And we see independents obviously operating with a lot less overhead cost. And sometimes that's the downfall of the IOCs. By the time the GNA and indirects get allocated down to an asset, it really does take away tremendously from the overall profitability. And I think the IOCs need to really continue, and I think they have been doing this, but they need to get a little more serious about understanding and going after what is the corporate need and support need and what's the minimum we need to do to support this successfully. And I suspect there's a lot more money to be had. And you can learn from the independents what it takes for them to drive these companies. And it's a whole lot less than, I think, what we know, what the bigger companies get.
[00:27:30] Speaker A: And I do just want to come back to the supply chain point, too, that suppliers, I think, would definitely say because companies customize, it drives costs for them and therefore for their customers.
[00:27:40] Speaker B: Right.
[00:27:41] Speaker A: I think the other piece to that is just frankly, a lot of these large companies are difficult to deal with, whether it's terms, conditions, the number of vendors that are on an approved vendor list, and those costs obviously get passed through. So you would think with the size and scale of an IOC, you would actually have preferential terms in terms of rate versus an independent. But sometimes we find that to be the complete opposite, that independents are willing to work with more suppliers to actually get lower rates, or they're frankly just quicker and easier to deal with so they get lower rates. So that's one other element of an independent that we can probably learn from, that IOCs are perfectly positioned, leverage the scale. You have massive amounts of it, but you can't only rely on scale. You also have to work with your vendors in a different way.
[00:28:30] Speaker B: Let me try to make a point to address the comments on the standardization point or the over standardization point.
What I've seen sometimes with IOCs is that they have invested in a particular design for a decade, right. And they put their heart and soul into these designs, and they've worked for them in the past, and they're committed. And it's a little bit difficult for them to sometimes break away and try different things if we're no longer optimizing for production and reserve replacement. And now we're optimizing on returns that may require a completely different design. And certainly we've seen it in recent months.
And the independents are just, they're just more nimble. They're more willing to pivot.
They have less of a reluctance to challenge and to question those designs that have been in place for years. That organization hasn't been around as long anyways. So I think it's a little bit of a handicap for the IOCs.
But you can look at the success that the independents are having by making those pivots and then make a decision as to whether that's right for you as an organization. And then if you are going to move in that direction, those kinds of things need to be sort of supported from the top down. And that's when you get some traction and that's when you're really able to make changes.
[00:29:58] Speaker D: Yeah. Every merger and integration that we've done, we ask them, you need to compare how you do things to how the seller is doing things and understand which is the best practice and adopt that going forward for your benefit. Not everybody does it, but it's a great way to stay in touch with what other companies are doing that you're not going to get from your own insider organization.
[00:30:19] Speaker B: Right. Yeah. That proprietary data that would help to understand how others are making those changes and basically to consider different designs are something that we have in our peer review tool and continues to be a really high value asset for us and for our clients.
[00:30:39] Speaker A: Even learning from within an organization, you see a lot of these IOCs forming asset classes now, whether that's deepwater or shale and tight or LNG, whatever it might look like, where at least within a corporation you can start to share more of those best practices across assets, benchmark against assets. And it's not about trying to figure out necessarily who's doing it best, but where is their opportunity and what can we learn from one another.
So even within a company, I think there's a good starting point there that let's tear down some of the walls of I do it my way, you do it your way, and let's learn from one another and try to do it together as an asset class and even share resources across our asset classes, whether it's people or drill ships or.
[00:31:21] Speaker B: Whatever else, it's great.
[00:31:23] Speaker D: Take advantage of the breadth of their portfolio to do internal comparisons and see what's working.
[00:31:27] Speaker A: And it's natural for us to focus on the opportunities.
[00:31:31] Speaker B: Right.
[00:31:31] Speaker A: And what the independents are doing better than the IOCs, but nobody's better positioned than the IOCs. The last couple of years have shown that this is about scale. Scale matters, especially as we embark on the transition in whatever form or shape that ends up looking like. But nobody's better positioned.
[00:31:48] Speaker D: What about value coming from the outside, kind of beyond the industry? We see any examples where that's been taken up by the IOCs or could be.
[00:31:57] Speaker E: We know that a lot of innovation comes from outside of an industry. Right. If you're looking for a new solution to a problem and you look outside of the industry to somewhere that has solved similar problems, but in maybe a different capacity, that's where some of the best and most innovative ideas come from.
[00:32:21] Speaker A: Yeah. As an example, we do see our clients working more with tech companies. As an example, like partnerships with Amazon and things like that, where we are leveraging what's been done elsewhere, I do think that's new. Like as an industry, we weren't open to that type of thing ten years ago.
I see through the eyes of, for instance, our infrastructure and capital projects group here. They're bringing the same level of discipline to commercial construction projects as they are to mining projects, as they are to refinery projects. Right. If it's a major capital project, we can learn from one another. So I think there's more openness to it than there was, but we still have a long way to go.
[00:32:58] Speaker E: Yeah. There's an example that came to mind around medical and energy. There was some technology in imaging that was transferred and leveraged for geoscience and for imaging in that capacity, and that's been very successful. So that's one idea.
[00:33:22] Speaker A: We do incredible things from a technology standpoint, from an operational standpoint, when it comes to back office technology, I still think we're slow as an industry to adopt. I don't know why, but we do incredible things from an engineering standpoint. But when it's digital solutions, we are getting there. And I think the last ten years has made huge improvement, but we're still slower than a lot of industries, for whatever reason.
[00:33:46] Speaker D: So with a lot of recent consolidation activity, the IOCs are evolving and changing. How do you see them looking differently a few years from now versus today?
[00:33:57] Speaker E: I think if they're smart, they'll leverage the acquisitions they're making of some of the more independent, smaller companies to learn their best practices and why they've been successful and how to incorporate that into the IOC, and at the same time, leverage some of their proficiency at processes and procedures without getting too far into it, with the independence, but enough of it that they can operate better and more consistently and more efficiently. I think if they can find that balance, like the whole will improve.
[00:34:38] Speaker D: A lot of value, opportunity.
[00:34:39] Speaker E: There's a lot of value there.
[00:34:40] Speaker A: Yeah, we're trying to find the middle ground right from the two bookends we saw historically, which were either assimilated entirely into our culture and ways of working, or in some cases, ring fence it and leave it alone.
[00:34:52] Speaker E: Right.
[00:34:52] Speaker A: I'm not sure either one of those perfectly worked. So now we're trying to build the best in breed.
[00:34:58] Speaker E: I actually think Shell did a great job when they integrated BG group, and I had been part of BG Group, so knew that organization well and truly saw that they, from a people process, commercial approach, really learned from and took the best of what BG had and built that into the organization. Rather know said, oh, we do it best, you should do it our way.
[00:35:27] Speaker B: Chevron Hess Steel has some interesting dynamics as well. I mean, you're absolutely right. This is not just the Chevron way across the Hess assets. They really need to draw from some of the best practices that they're observing in Hess. And Hess certainly brings some capability to the table around exploration and other things.
Being in the bakken, Chevron's not there, so that's new terrain. So they'll be able to pull some learnings into their shale and tight asset class. And so it's got to be sort of a two way exchange. I mean, Guyana obviously brings some new things to the table, too, but it really is an exchange. And now Hess is going to have the advantage of Chevron scale, which is tremendously, you know, it's got to be that sort of, that counterbalance.
[00:36:14] Speaker D: Great.
[00:36:14] Speaker A: More to come in your next episode.
[00:36:16] Speaker D: Yeah, more to come in future discussions. Renee Riyadh Nick, thank you very much for your wonderful insights on the IOCs and how transformation is making them very different companies. We hope you've enjoyed watching this episode as much as we enjoyed producing it. Please join us for future episodes of the next Imperative. Our integrated oil Company series will continue with episodes on production management and capital efficiency.
[00:36:43] Speaker C: Thank you for listening. Make sure to subscribe to the next Imperative so you never miss a new episode. Also, visit our website, Alvarez and Marsal to learn more and to connect with us.
