Marian W. Downey, 2000. "The Right People for International Exploration and Production Offices", International Oil and Gas Ventures: A Business Perspective, George E. Kronman, Don B. Felio, Thomas E. O’Connor, Mindy S. Kronman
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This chapter is a personal essay limited to the problems, the difficulties, and the benefits of properly staffing foreign exploration and production offices. It does not address the physical problems of personal security, office leasing, communications, customs, and import difficulties. It does not discuss the human relations problems of the head office of an international E&P (exploration and production) company.
I have been the chief executive supervising exploration investments in 61 countries in the past 25 years; most of the investments involved establishing an in-country office. In addition, 10 of these countries received funds for field development; these country offices required assignment or hiring of a wide variety of talent, in addition to exploration staff.
Foreign offices are sometimes opened as listening posts, to provide more contact with host-country officials and local investment opportunities. Such foreign offices may be useful, but they are always costly. Look closely at whether it is really necessary to establish a foreign office. If you are not the operator, your costs are not recoverable. You should expect costs (losses) of $1 to $2 million per year for your foreign office.
If you have decided to open a foreign office, your next important decisions involve staffing. Proper staffing of new overseas ventures is a difficult challenge. Look at it as an opportunity to control the creation of a great company by your actions in providing the right expatriate and local staff.
If you are beginning an exploration project in a foreign country, always remember that something like four out of five exploration ventures are failures! What do these odds tell you about too early investment of capital and staff? They should tell you to keep capital and staff committments to an absolute minimum until you have established that you have an exploration success to develop.
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A “one-stop” business view on how to succeed in international exploration and production. Success in the international upstream arena requires more than the technical ability to find oil and gas. Relationships with governments and people, mutually beneficial contracts, workable strategies, and implementation plans are necessary to build strong, mutually beneficial, and profitable ventures. Key components that drive exploration and production in the global environment are examined. Specific topics include negotiating for success, contracts, the role of technology in international strategies, cross-cultural relationships, alliances, and international upstream financing. Authors from around the world, representing industry, governments, national oil companies, consultants, and academia, contributed their perspectives. Views are provided from both sides of the negotiating table, the corporate boardroom, the resident manager, the explorationist, the businessman, and the theoretician. Geoscientists, engineers, and negotiators, who are, or would like to be, involved in the global energy business will find this collection an important reference.