I'm a numbers person. Years ago, when I was just learning to work exploration and development economics, I was transferred onto an exploration team believed to be on track to evolve into a new producing affiliate. The team had quite a few leases and was acting as if it were a new producing affiliate.
My first task was to crunch the numbers on the lease that had once been the jewel in the crown. The company had drilled a couple of very expensive wells and found deep gas instead of oil offshore a country with no natural gas infrastructure. Most people realized the block's future was bleak. I tried a range of scenarios, but the lease was beyond salvation.
Anticipating much better news, I moved on to the team's other leases. One by one my expectations were crushed. Finally, I came to the last lease. Many people with more business experience than myself were working on that lease and had grand plans for drilling and development. When the economics for that block were also dismal, I was convinced I had made a mistake. Before releasing my results, I made some quiet inquiries. To my surprise I heard, "Oh, didn't you know? That's why Manager X left the team. He was furious when the VP signed that lease. Manager X knew it wasn't any good."
After completing the economics on all the blocks, I waited for the sky to fall. I felt like I was living on borrowed time, but everyone around me seemed oblivious to our financial predicament.
It took longer than I expected, but within months the head of the business unit nuked the management of the team, and the rest of us were scattered to other assignments. Most of the team members were surprised at the rapid termination of their projects.
The lesson I took away was this: If you know the numbers, you don't need management to tell you the fate of your project.
Fast forward through the years. At the beginning of a new assignment, I was trying to explain to a colleague why I was so concerned about the numbers. To get him to understand my perspective, I told him about my exploration economics experience. To my amazement, he replied, "The numbers don't matter, it's all politics." My probing revealed he was completely serious. He really believed that if you worked the politics correctly, you would not be hurt by dismal economic performance.
Don't get me wrong. I think politics are extremely important, but not sufficient for project success.
As a numbers person, I have a tendency to rush forward assuming the facts as I see them should be obvious to everyone. I have to remind myself to slow down and make sure the rest of the critical players are in agreement. Building alignment and working the politics leads to better understanding of what is involved. The modifications necessary to build consensus often result in a much more robust plan than the one I originally thought obvious.
Good politics are necessary to get a project funded and keep it running smoothly. If a project is struggling, strong support can provide more running room to allow the project to gain traction and reach profitability.
Those who assume a project with political cover can go on spending indefinitely conjure in my head an old cartoon. A dog whose collar is attached to an enormous pile of chain takes off running as if he were unfettered. When the chain runs out, the dog is stunned, just like my unsuspecting colleagues.
Watch your back. Talk with the people who handle the economics, even if all you are concerned with is the technology. You may know something that is not being leveraged and could improve the fiscal situation before it is too late. A good understanding of the numbers and the politics will provide more advance notice of when it is time to move on to another position.

Eve Sprunt, evesprunt@aol.com, is an oil industry executive.

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