Advancing Environmental Responsibility in Times of Global Consolidation
- M.M. Skaggs Jr. (InDepth Environmental Services Inc.) | J.E. Johnstone (WZI Inc.)
- Document ID
- Society of Petroleum Engineers
- Journal of Petroleum Technology
- Publication Date
- December 2001
- Document Type
- Journal Paper
- 33 - 36
- 2001. Society of Petroleum Engineers
- 1.6.1 Drilling Operation Management, 6.1.5 Human Resources, Competence and Training, , 6.1 HSSE & Social Responsibility Management, 6.1.1 HSSE Management Systems, 4.3.4 Scale
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The oil and gas industry is continuing its trend toward global consolidation. The merged corporations are establishing their future environmental and social responsibility benchmarks as they structure their new organizations. Improvements in these areas result only when the best personnel and environmental management systems of the predecessor entities are preserved and spread throughout the merged corporation. Our industry is becoming more efficient and profitable through the efforts of its best people, the electronic exchange of best practices, and through other technological advancements. Mergers provide a unique opportunity to advance our industry's tradition of environmental and social responsibility in the same manner-by building new organizations that draw from the best resources and practices of both predecessors.
The phone rang in the middle of a dark, cold January night at 3 a.m. On the other end of the phone was one of my best friends calling me from the West Coast. "Did you hear?" were the first words I recognized, struggling to wake up. "Hear what?" was my reply. "We were just sold." At that instant, a cold feeling came over me as I realized that the company that I had toiled for, defended, and invested the greater part of my life in had suddenly vanished. The next morning, we all read about the deal in the newspapers and on the Internet.
The papers told how the alliance would increase shareholder value by reducing costs and improving profits. The synergies of adjacent producing properties and how overhead could be reduced by eliminating duplication was constantly touted. Employees would be treated extremely well because those who wanted to leave would be given a "golden parachute." Everywhere in the press there was a buzz about how much business sense this merger would make and how the stock price would benefit.
But where was the discussion about environment, health, and safety? There were no press reports about that. The Wall Street Journal did not mention it. The local newspapers did not write about it. The safety and health aspects of the merger were not mentioned on the television news.
We constantly hear about how mergers lead to reductions in costs, greater economies of scale, and the elimination of duplication. Reservoir engineers and the exploration staffs marvel at the combined potential strength of the new company. But there is virtually no comment or thought about how the merging of two great companies can help the environment or reduce injuries to personnel.
Can mergers improve safety and environmental performance? Obviously, each of the merged companies is going to already have safety and environmental programs in place. A side-by-side comparison of each company's programs would usually find areas of greater strengths and weaknesses. Safety and environmental professionals, much like the reservoir engineers and exploration staffs, should be able to develop new programs and practices, taking the best from each of the merged companies, to create a better result.
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