jeudi, novembre 10, 2011

Expensive Oil, Cheap equipment

I don't know how it is in other industries but, in mine there is like a motto: it must be economical (aka cheap). I may be a bit caricatural and extremist, but if you look at a particular segment of our industry it is totally turned towards that motto. Unfortunately I am talking about the field part, the extraction part of the industry, the one directly in contact with the oil, the field, environment and all what it means (aka Macondo disaster, just look for the spill containment technology at that time). Looking at a rig you can see that companies will look at building it the cheapest way, within the boundaries of the technically possible and the economically feasible, the human or environmental factor is not a priority into the equation unless governmental pressure. Security measures are written in blood because people wouldn't work on it or using it otherwise and also because it is safer, not the contrary. Our industry we don't work to create the value, we work to extract it so in a way it is for free. Aeronautics are workers creating a value, same for automotives or space commuters. Mining extract something that originally came out of pure luck. In Africa some countries have to import flower and eggs because the inhabitants are not stimulated to go to the field and harvest. They prefer the 8-12 hours of rig hours where they have less responsibility and the security of the salary rather than the never ending farmer prospecting and the varying income of an independent. I don't blame, I have that but governments should stimulate stability in order to diversify economy and get their country away from fragility. That's why we have so much accidents, a lot of them aren't divulged not to stimulate the media and give bad advertising.
To resume (but not to spit on production companies, some really show a different behaviour) the main difference between operating companies and service companies lies from the fact that the latter are delivering a value added where the earlier extract value without creating it. Where it becomes complicated is when within the same company you have also research or services. These people create value added hence the difference in philosophy (and a possible window of change). But the essence of the producing company is to get from the soil something that they have not created. The notion of property comes from the money and the odd you put into prospection in order to get the oil.

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