HOUSTON, April 20 (Reuters) - The energy sector will need a “new breed” of executives who innovate in real-time to effectively navigate through the crude oil price collapse and the industry transformation that is expected to follow, an energy headhunter and leadership consultant said on Monday.
The oil price crash represents for some “a great chance to seize on the crisis and turn it into an opportunity,” Les Csorba, a partner with Heidrick & Struggles in Houston, said on the sidelines of the CERAWeek conference.
As baby-boomer oil executives near retirement, their replacements need to abandon the notion that production growth should be pursued at any cost, a mentality that dominated the sector before drilling for oil and natural gas took off in North America’s shale formations.
Two executives that typify the new breed include the chief executive officers of Apache Corp and Chesapeake Energy . Apache’s John Christmann and Chesapeake’s Doug Lawler represent “a distinct departure from the stereotypical swashbuckling oil and gas executive whose free spending and large bets on assets risked placing the business in a precarious position,” said Csorba.
Lawler has an intense focus on improving returns, while Christmann, who took over in January, has slashed spending and is drilling unconventional wells in places that offer the fattest returns, like the Permian Basin.
Additionally, executives should not repeat the mistakes of past downturns and cut too deeply with money-saving layoffs. Instead they should ensure that young executives are well prepared for bigger jobs.
As one example, he points to U.S. oil and gas company Noble Energy, which started investing in executive assessment and executive coaching plans well before the downturn, leaving the company with deep management expertise to tap for ideas in the current low crude price environment, said Csorba.
Csorba also expects a great deal of transformation in the sector as companies adopt and innovate as a means of coping with low crude prices. For example, some U.S. oil and gas companies are taking on some oilfield service company functions on a small scale as a means of ensuring access to “quality people and equipment” when prices recover, said Csorba. (Reporting by Anna Driver and Ernest Scheyder; Editing by Chris Reese)