New
boss at BG T&T
Shirley
Bahadur
Derek Hudson new BGTT's CEO
Port Spain
Petroleumworldtt.com
28 07 07
It
was 5.40 on Monday afternoon. He ended a phone
conversation and opted to have this interview with
the Business Guardian in BG’s plush fourth
floor boardroom as opposed to his office.
It took weeks of liaising with his office to set
up a meeting.
Clad in white shirt, black pants and black-and-white
checkered tie, he settled himself in an L-shaped
couch with an air of formality.
It’s not often that this multinational engages
the local media, which have branded it as conservative.
It’s an assertion Hudson sidesteps.
“What we have been about is conducting our
business, which is in the best interest of ourselves
and the Government and people of T&T. In the
context of my recent appointment, it is probably
necessary to be a little more open about the what
we have done and our plans going forward.
“Our job is not to make news but to get
on with our business and be successful. Once we
do that, everyone will benefit once it’s
a newsworthy item or not.”
Hudson’s September appointment as president
of BG T&T may have raised some eyebrows as
it followed the announcement that former president
Craig McKenzie was now the chief executive of Canadian
Superior.
But
Hudson’s appointment was hardly a stroke
of luck. Industry insiders believe Hudson was groomed
to assume his new role; a BG strategy of successful
succession planning.
Hudson refused to speculate.
Asked why he was chosen for the position, he laughed.
“That’s
not something that I think about. That is a question
for my bosses to answer.”
His
personal perspective is that since he joined
the multinational in 1995, he “very quickly” became
a part of the management team.
“Since that time I have had a leadership
role here in T&T. You could look at it like
that. There was always a perception that one day
that I would lead BG T&T. That is the challenge
now.”
Hudson’s position has received positive
reception in the tradition of “local boy
done good.”
It’s
enough to give him pause.
Waxing philosophical, he sought to put the picture
into context.
“I
am an employee of BG, ok? And BG is an international
organisation. I have been a leader
of one of our UK assets between 2000 and 2004.
It just so happens that at this point in time,
the company believes that I am the most appropriate
person to run this organisation.
“I don’t
necessarily think that it should always be a
Trinidadian. I would like to
see other Trinidadians move into this position
and other leadership positions into this organisation
throughout the group because the fundamental objective
is to use our human resources to position them
in the best place in this organisation.
“And if it so happens that you get a national
running that country, then so be it,” he
nodded, “I feel a sense of accomplishment
but, moreso, that Trinidadians are showing the
capability of taking up leadership positions throughout
BG Group.”
Hudson’s
confidence is mixed with humility.
At
51, he’s used his experience working
in different countries and his perception of human
behaviour to help guide his role as a competent
leader. His pivotal point is his experience within
the BG Group, which culminated in him heading “one
of our assets” before he returned to T&T.
“I
have a long experience with BG. I understand
the energy business. I have been involved in
several
of the key elements the last ten years of rapid
industrial expansion in the country, including
activities associated with the LNG Train, bringing
our gas fields in the east and north coasts, so
those are some of my professional attributes.
“I am a geologist by training and from the
other elements, I interact well with people. I
consider myself to be a strong communicator. I
understand where this business should be going
in the future and I think I can pull all these
skills together for a successful business,” he
asserted.
Asked
about his extensive social circulation, he laughed, “It wasn’t
done intentional.
“Things
that interest me? Local art, jazz music, playing
golf.”
These
days he’s hard-pressed to visit the
golf course or finish reading.
“You’re
in charge, so what?
“I like golf for the serenity. The fact
that it is competition with yourself. I do enjoy
walking and I find golf courses extremely beautiful.
I don’t discuss business on the golf course,” he
laughed.
He makes time to visit the galleries.
“One
of the reasons I enjoy local art is because I
think that these things actually represent
a soul of the nation. For you to be successful
in business, you need to understand how these things
evolve, what are the efforts that people put into
it, what is it that drives their creative process.
“This
is a small country, therefore, the role that
you play, your influence on other people
could become quite important so you have to become
cognisant as you go forward in doing things.
“My personal challenge is to utilise the
energy and keep that momentum going for the next
three to four years. That they always see honesty,
transparency, leadership; that they could want
to emulate which will encourage them to put that
extra step into the business,” he said.
BG
T&T a key player
Hudson
defined BG T&T as one of BG’s
five key asset worldwide in addition to the role
it already plays in the local energy landscape.
“BG started gas production and is the only
operator at present off the north coast marine
area. BG has been an investor in all four of the
Atlantic LNG trains and so therefore BG is very
proud of the fact that we are the second largest
gas producer and we are a key player here with
respect to the group’s business. But also
to the large contribution we make to the socio-economic
development of T&T. BG is not interested in
comparative analysis,” he stated.
In
March, BG signed a memorandum of understanding
with the Government for a joint study to determine
the way forward for a new export train of LNG.
The intent of the study is to open up new possibilities
for T&T’s gas to reach markets.
The
announcement followed the signing of a unitisation
agreement between T&T and Venezuela. Prime
Minister Patrick Manning had said the gas that
will be produced from the Loran/Manatee field,
which has reserves of 10 trillion cubic feet, will
form the basis of a new LNG Train X .
Hudson said Train X remains a possibility and
pre-planning was essential.
“You want to be ahead of the game. You want
to be assured that some of the creativity is embedded
early on, to get these ideas so we can evaluate
it, investigate it so you can decide on the correct
way forward even before all the resources are available
to implement that analysis. We need to start to
be creative from now. Learn from the things that
happened with LNG expansion when we first started
this discussion in the mid 1990s and take that
forward in planning for the next phase for LNG
expansion in T&T. I am in the energy business,
so I am optimistic that there will be a next phase
of LNG expansion in T&T,” he said.
BG also signed a heads of agreement with the National
Gas Company (NGC) to commit a further 1.2 trillion
cubic feet (tcf) of gas to the local market which
would mark their third US$1 billion of investment
here.
Reflecting
on the developments, Hudson noted that it is
indicative of the company’s commitment
to T&T.
He believes that the country has the potential
for a next phase of industrialisation, but that
remains a government objective.
“We
are in the LNG business. It is one of our strong
points. It has been successful here
both for ourselves and the country in the past,
so therefore, it is a model I can easily see the
government supporting once we have all the parameters
in place.
Energy challenges
“Next time around we utilise the lesson
learnt in the past, repeat the good and make sure
we don’t repeat what doesn’t work for
us,” he said.
Asked
to put on his geologist hat and comment on T&T’s future potential, he explained
that what T&T was experiencing was a “mature
phase” in its hydrocarbon development which
has happened in the Gulf of Mexico and certain
parts of the UK continental shelf.
“We getting to a more mature phase of our
hydrocarbon development, especially with regard
to gas offshore, so gas is becoming more difficult
to find. It is going to be more expensive for us.
But, with the appropriate technology, if we could
get all the commercial fundamentals in place, we’ll
be able to go out there and find more gas reserves
here in T&T.”
BG, along with other energy companies, has remained
optimistic despite the negative public feedback
the Government received after the results of the
Ryder Scott audit was announced. It pointed to
a 12-year reserve to production ratio.
Consequently, the Government has halved its future
downstream endeavours.
Commenting
on this, Hudson said that companies remained
optimistic, “simply because we are
in the business.
“We recognise that the reserve to production
ratio because of the rapid industrialisation expansion
in T&T over the last few years. It has diminished
from five years ago to today simply because our
discoveries have not matched the rate of gas consumption,
but we’ve seen this in other countries before
and we have ideas from those other areas how to
respond to this.
“That is simply the one reason why we have
a more positive outlook on this. We are extremely
optimistic. And when I look at BG’s plan
for T&T, it is definitely looking beyond a
12-year period, but there are challenges to doing
so.”
BG, like bpTT, has an active exploration programme
next year and expects to have additional gas production
from 2009.
“We
will be drilling some new wells of the east coast
of Trinidad beginning in January 2008.
A couple of those wells have exploration extensions,
so they will be looking at proving up new reserves
off the east coast.
In
addition, we have recently partnered with Canadian
Superior to look at some exploration prospects
further east of our Dolphin platform. We are drilling
the first well at the moment and we have two more
wells to drill there, but we also extremely optimistic
that those wells will be successful.”
He
steered clear of giving an estimate of BG’s
successful Dolphin field, which was reported to
have more reserves than was initially estimated.
“I will report it this way. I was the operations
geologist working at Dolphin. The size of the field
has increased three-fold today than when I first
looked at it ten years ago,” he laughed.
“We
continue to find more oil and gas, but it is
becoming more difficult to find. Our choice
is how we utilise this so we maximise the benefit
to everyone concerned. It is something that is
also going to be a challenge at this point.”
Local challenges
Being head of the local operation, Hudson can
easily identify the challenges BG and, by extension,
the energy industry faces.
He noted that just as construction costs have
risen, energy companies have faced increased costs
of building platforms, drilling new rigs and acquiring
new equipment.
He said that companies faced an economic challenge
of making projects work even though oil prices
are in the range of US$80 to US$90.
A more daunting challenge is having the resource
capabilities to sustain the growth in the sector
which the country has enjoyed for the past ten
years.
“The challenge is whether it is getting
appropriate Trinis to do the job or even getting
the appropriate overseas to come here to work.
That is going to be a challenge moving forward,” he
said.
Hudson
noted that the completion of bpTT’s
Mango and Cashima has freed up resources to focus
on the construction of BG’s Poinsettia platform,
which is larger than any platform previously constructed
at the La Brea Fabrication Yard.
“What
we are looking here at is the ability to do it
and the ability to do it at the optimal
cost. We would have looked at what it would have
cost us to do it a Louisiana to what it would have
cost us to do it here in Trinidad.
“And we get synergies from the past experience
of the guys who have done it here. It’s all
a question of how do we put the parameters together
and how do we make the correct decisions. The days
when we make the assumption that all of this will
be done on the outside and then bring it back here
have passed. We are very pleased to make it here.”
Like other service industries scrambling for skilled
staff, Hudson noted that it is very difficult to
attract economists, geologists and geophysicists.
“We
are having conversations with the other energy
companies as to how this should and would
be addressed and this is something that we have
to take forward going into the future.
“We have to develop this programme. How
do we collaborate with each other. This is not
just a BG T&T issue. This is a bp, BHP, EOG,
NGC issue. We all have to start collaborating more
effectively as to how we deal with some of this
resource challenges. It is going on now in a sort
of insipid fashion. We need for that to grow and
develop better to take it forward.”—Asha
Javeed
As
port chairman... It’s a long road
After
two months deliberation, Hudson accepted the
role of chairman of the Port Authority of T&T.
Why?
“My wife sent you to ask that question,” he
laughed.
“It is difficult to see some of the problems.
People like myself have been given an opportunity
in a multinational organisation to develop service,
but we are also Trinidadian and Tobagonian, so
therefore, then it was extremely difficult to just
sit on the sidelines and when asked, not offer
one’s self for national service.
“It
has been a very unique experience. Something
completely different than at BG. There challenges
are huge with respect to transforming that business.
We have gone about it, subject to the time constraint,
in a very incremental but specific fashion. We
are starting to see some of the benefits, but the
road to travel is a long one.”
Story
by Asha Javeed from the Trinidad Guardian
Trinidad
Guardian
Thursday 25th October, 2007
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