Take a risk?
Risk-taking is hard. Fear of failure, economic inhibiters, and the potential safety and health consequences can be helpful brakes. The challenge comes in knowing when to apply the brakes instead of accelerating to the unknown. The stories of those interviewed for this month’s Bulletin provide insight into that question.
I had the pleasure of interviewing Robbie Gries, the founder of Priority Oil and Gas, a pioneer for women in the Oil and Gas industry, and amplifier of women’s stories. I was struck by her apparent willingness to take risks. She didn’t have a wealthy family as a financial support network. For most of her career, she did not have a husband to provide financial safety net for herself or her daughter. Yet, she demonstrated a willingness to take risks of pursuing employment in a male-dominated profession, moving from a larger company to small independent, reinventing herself as an expert in mergers and acquisitions, and starting her own Oil and Gas production company. Wow!
This month, I also had the privilege to speak with three emergent geologist-artists who pivoted from lengthy careers in Oil and Gas to pursue a passion for their art. Their stories highlight the personal risk required to share their art with the world. Ana Pape described that exploration geologists rely on a team to deliver an interpretation or make a pitch for a new opportunity. However, as an artist the burden to make the pitch or design the product is individual. Pape, along with Julie Mahler and Carmen Fraticelli, took risks to learn new skills, invest in themselves, and share their artistic vision with diverse audiences.
Risk is inherent
Those who have spent their careers in Oil and Gas know that risk is inherent to the business. Cyclic fluctuations in commodity prices result in hiring booms and large capital budgets followed by mass layoffs and shut-in production. Based on operational experience, exploration wells typically have ~10% chance encountering economic quantities of hydrocarbon. Operational risks are layered on top.
Managing risks
A primary tool used to manage risk is data analytics, i.e., data mining and business intelligence. Cassie Kozyrkov, authored a 2020 article in Harvard Business Review called To Recognize Risks Earlier, Invest in Analytics. She says that mining internal and external data allow companies to identify trends and form hypotheses that cannot be delivered with forward modeling alone. Kozyrkov notes that building databases is time- and effort-intensive, and that not all datasets yield insights. However, a robust database is required to be ready to answer questions as they arise.
Gries alludes to using data analytics as a driver for starting her business. She describes how engineers in the early 1990s believed that one well could effectively drain a square mile of reservoir, but the geologic data did not support this hypothesis. She believed—based on data—that she could be profitable in drilling infill wells.
In addition to data, two other key criteria are essential for effectively accepting and managing risk. First, taking risks requires passion. Pape, Mahler and Fraticelli all demonstrate a passion for their art, evidenced by the long hours, and by the resilience with which they continue to grow and learn. Gries has a passion for geology that led her to fight for her career despite numerous obstacles.
Secondly, risk-taking requires a leap of faith that thing will work out. While data can build confidence in marketing strategies for artists or in operational strategies for oil producers during times of success, a jump beyond the data is required to build confidence that the tough times won’t last, either. Gries describes how she routinely took leaps of faith: “There were months when I wouldn’t have money for rent, but then a deal would come together and the money would work out,” she says.
Read more about risk-takers in this edition of the Bulletin
● 15 artists took artistic risk to submit their work to the Geology is Beautiful art contest. You can vote for your favorites here: Vote now!
● Read about risk-taker and HGS legend, Robbie Gries.
● Learn about how geology, art and risk are intertwined in the article Exploring Creativity: Parallels Between Geoscience and Art.
● Attend the talk by Bill Armstrong on January 8 to hear his perspective on taking exploration risk in Alaska.
● Contemplate flood risk while looking at the impacts of Harvey at the E&E dinner meeting on January 10 with speaker Andrew Sterns.
● Hear Art Berman’s perspective on why not to fret over commodity price risk in his luncheon talk on January 24.