One of the reasons I've long respected Schlumberger (NYSE:SLB) involves the leadership that CEO Andrew Gould provides, not only to his company, but to the energy industry as a whole.
Each quarter, Schlumberger is the first of the oilfield services companies to report its earnings, and the events are always as noteworthy for Gould's candid assessments of global trends and events in energy as they are for the discussion of his company's financial and operating performance. So I found his recent upbraiding of the oil and gas industry particularly interesting. He urged the industry to acknowledge its role as a fossil fuels producer and get beyond the "almost schizophrenic attitude toward what it does."
As he noted, while oilfield types are proud of their industry, "when we go in front of the public we say we're very green and all the rest of it." He said that this approach has discredited the industry for young professionals and made hiring more difficult. Because of the paucity of students who studied energy-related disciplines as the 20th century came to a close, the industry is now having difficulty finding sufficient numbers of geoscientists and petroleum engineers.
Gould also noted his own advantage in that, unlike oil and gas producers, "I don't sell to the general public." It seems that the negatives that accrue to the major oil companies when they sell directly to the public have played a part in pushing ConocoPhillips (NYSE:COP), ExxonMobil (NYSE:XOM), and BP (NYSE:BP) out of the retail portion of the business.
Finally, Gould observed that the energy industry has consistently failed to garner the public's interest, despite its involvement in a host of technical challenges. He specifically pointed to Russian Gazprom's Shtokman project in the Barents Sea. "Shtokman," he said, "is not putting a man on the moon, but it's not that far away in terms of technical complexity."
He might also have mentioned the impressive efforts of Petrobras (NYSE:PBR), along with deepwater drillers Transocean (NYSE:RIG) and Diamond Offshore (NYSE:DO), for their roles in locating meaningful amounts of oil thousands of feet beneath the sea's surface offshore Brazil.
But the key point here is that it's refreshing to have in Andrew Gould someone who will tell it like it is regarding the world of oil and gas. His knowledge and candor are among the keys to Schlumberger's ongoing status as the star of the oilfield services show.
