We live in a world of constant change.
That’s a truism, of course. But 2014 has been remarkably tumultuous, full of aggression and violence. Around the globe we've seen increased political instability with governments wobbling and major economies teetering on the brink of recession.
Troubled winds are blowing as this year comes to a close. And our industry is feeling their effects.
Oil prices have been declining since midyear and have swooned in the last quarter. There are many factors that drive the price of oil, of course – but a combination of new U.S. oil supply entering the market from plays such as the Bakken and Eagle Ford, decreased demand for product as global economic growth slows and a strong U.S. currency have resulted in much lower prices than we’ve seen in the recent past.
Now, I struggle to call $75 per barrel a low price. But it is certainly causing anxiety among some OPEC states and other large oil-exporting countries whose political and economic systems depend wholly on oil sales in global markets.
And many of our members with whom I’ve been speaking are feeling anxious about what these changes mean for their companies and their jobs.
Certainly, if you work for Halliburton or Baker Hughes, you woke up last month to find that your world was changing.
On Nov. 18, Halliburton, the world’s second largest oil field services company, announced its intent to buy third-ranked Baker Hughes in a deal valued at close to $35 billion.
In its announcement, Halliburton mentioned the complementary product suites of the two companies, and an expectation that the new firm will realize up to $2 billion in annual cost savings through the merger.
The deal still must be approved by shareholders of both firms as well as regulators.
But analysts believe this merger may be the beginning of a new round of consolidation in the energy industry, as lower share prices create opportunities for more deals.
The winds of change are blowing.
As we wrap up 2014 and look ahead to a new year, I’d urge you to take some time for self-reflection, to think about how you plan to deal with the many changes that are affecting your world.
One common response is to ignore them, and to pretend they don’t exist.
This is one of those strategies that works well, until it doesn’t. Suddenly you are faced with a situation that you did not foresee, that you cannot control and for which you are completely unprepared.
A second response is to resist change.
Folks who adopt this strategy see change as an enemy to be fought. Sometimes this works. But frequently the forces driving the change are larger than the individual or group resisting it, and the result is a bloody battle that ends in defeat. Remember the Spartans at the battle
of Thermopylae?
The third response is to embrace change.
You may not like it. It may not be what you would have chosen. But just as a sailor reads the wind and adjusts his sails to use the wind he has to reach his port, so we can read changing circumstances and adjust our responses to reach our goals.
Don't be a passive observer, waiting to see what happens as your world changes.
Are you ensuring that you are at the top of your technical game if you’re in a technical role? AAPG can help you with that.
Do you have an active network of professional colleagues and friends whom you can call upon to help if circumstances at your job change? You need to be building that network now, before you need it. AAPG can help you with that.
Troubled winds indeed are blowing across our world, and winds of change are buffeting our industry. The simplest and most natural response is to ignore or resist.
Yet, I'm reminded of a quote by 19th century American theologian William G.T. Shedd, who said, “A ship is safe in harbor, but that’s not what ships are for.”
Chart your course for 2015.