Oil and gas firms and especially their lawyers were told to quit squabbling over deals and work together amicably by Sir Ian Wood yesterday.
In many ways the former chairman of engineering firm Wood Group is the Alex Ferguson of the oil world – although he seems set on leaving a far better legacy behind him.
He urged firms to dismiss the idea they were “blood on the ground competitors”, pointing out they could save millions or even billions of pounds by collaborating.
At an event in the heart of law firm Herbert Smith Freehills’ London office last night, he delivered what would have been a stinging rebuke to the legal profession – if it hadn’t come across so fairly.
Touching on disputes he’d heard of during his government-commissioned inquiry, the Wood Review, he said: “I was really dismayed at the commercial behaviour of both internal lawyers in companies and of external lawyers. Senior management didn’t get themselves involved.
“There was a lot of, I can only describe it, as adversarial negotiations.”
Joking it’s never a good idea to get on the wrong side of lawyers, he hinted US lawyers had too much power in deals, adding: “The truth is, a lot of the American lawyers virtually lead… They’re particularly powerful in the American companies.”
If firms want to make more money and drill the oil more efficiently, things must change he said: “The goodwill that will be required to encourage collaboration will be damaged if we continue with the disputes that have gone on in the past.”
Sir Ian gave lawyers and drillers a year to come up with a way to “significantly reduce the time and complexity” of deals, perhaps by using more standard agreements.
He said: “Lawyers are some of brightest people in the world. You’ve got brains. You can make a very positive impact.”
At the event chaired by Malcolm Wood, chief executive of Oil and Gas UK, the Scottish oil billionaire said the layout of oil reservoirs and infrastructure – often “more like a patchwork of interconnected operations” – demands collaboration.
Later he added: “I hope and believe in a new regime we’ll achieve this.”
Sir Ian also said the UK needs to attract more operators to its continental shelf.