Chuck Davidson
Editor’s note: This profile is part of Hart Energy’s Hall of Fame series honoring industry pioneers and the Agents of Change (ACEs) who are leading the energy sector into the future.
The first half of Charles “Chuck” Davidson’s career felt, at times, like a series of out-of-body experiences, he said.
“It’s a little bit of a funny, lucky story,” Davidson told Oil and Gas Investor (OGI).
For the first half of his career, the former CEO and chairman of Noble Energy was not quite backed into corners by his mentor, William E. Wade Jr., the former president of Atlantic Richfield Co. (ARCO).
Typically, these moments, which in hindsight were career-building moments, involved Davidson candidly admitting he didn’t know anything about a job being offered to him. Somehow, Wade got him to go along with whatever new job he threw
at Davidson.
Davidson grew up in Michigan and attended Purdue University to earn his bachelor’s degree in chemical engineering. He’d known since junior high he wanted to be a chemical engineer and, he hoped, land a job in a research setting.
In 1972, a recruiter for ARCO’s Harvey, Ill., technical center told Davidson there weren’t any jobs along those lines. But ARCO’s upstream business had just made a discovery in Prudhoe Bay, Alaska, and was trying to fill positions.
“And so, all I know is I know nothing about the upstream oil and gas business, nothing, zero,” Davidson said. “And so I get a call from this HR person in Dallas. He says, why don’t you come down here? They called it a plant visit, but it’s basically to visit the office and we’ve got some possibilities here. Just give us a try.”
Davidson went to Dallas, interviewed, and got a call back a couple of weeks later with a pick of five jobs. Davidson went to work as a natural gas engineer, building gas processing plants.
“So that’s how I ended up in the upstream, just luck of the draw.”
Davidson crisscrossed Texas, east to west, then came back to Dallas for a short stint in production engineering when he was asked to take on a role as an engineering manager.
Outside of three or four weeks of training in reservoir engineering, Davidson said he didn’t know anything about the job.
Davidson ended up in Tyler, Texas, working on Cotton Valley downspacing, drilling and some deep Wilcox drilling in southeast Texas. Around 1985, the office closed. By 1986, the oil markets were in
deep crisis.
“The bottom completely fell out,” he said. “We shut down every drilling rig in the district.”
Davidson survived a flurry of layoffs and was asked to move to Alaska.
“Almost everybody in ARCO sooner or later gets somehow involved in the Alaskan project,” he said.
He headed to Prudhoe Bay, where he worked as the field manager for the Kuparuk River Unit, which was pumping about 330,000 bbl/d. Prices were so low that the field generated cash flow on volume rather than
by margin.
The job lasted about a year and half before he got another call. Davidson’s first thought was, now what?
The job was not what he’d expected. Wade wanted him to take on the role of vice president for external affairs and government affairs.
Which led to Davidson’s refrain: “But I don’t know anything about public affairs and government affairs.”
Davidson remembers the conversation happening on a Wednesday. He spoke with his wife, said the job would be a full-time role in Anchorage, and she told him to take the job if he wanted it.
On Thursday, he called Wade back and told him he would take it.
On Friday, the Exxon Valdez hit a reef and spilled 11 million gallons of oil into Prince William Sound.
“Just chaos,” Davidson said. Everyone affiliated with the oil and gas industry was affected by the spill.
“You’re telling your employees, strip all your logos off anything, any external clothing you’ve got, strip your logos off baggage before you get on a plane at the Anchorage airport,” he said. “Our president, Bill Wade, had to have security in his home living with him because of the threats.”
Davidson set about rebuilding ARCO’s brand with local television commercials that showed how that company was doing things differently, and how it was helping the state.
“By that time, I drunk all the Kool-Aid I could, and I said, ‘Look, this is all about rebuilding our brand’ because the whole industry lost their brand and a lot of their reputation during
the spill.”
Soon, a new job offer came his way: head of operations for the Trans-Alaska Pipeline. ARCO had helped to build the pipeline and, while it hadn’t been involved in the oil spill, the company was heavily criticized for its response, Davidson said.
“It was usually a fire burning every day in that system because of all the government challenges, regulatory audits, things like that. But we pretty much rebuilt the system,” he said.
Davidson next moved to Houston, where he ran ARCO’s upstream division. In 1994, the company went public as Vastar Resources, where he served as CEO beginning in 1997. At the end of 1999, BP bought ARCO and Davidson retired from BP.
Two weeks later, he started work at a company called Noble Affiliates, later renamed Noble Energy.
The move to Noble was “just another one of those flukes,” he said. A headhunter had called with the offer but Davidson begged off, wanting to shepherd Vastar through its acquisition by BP. But Noble was still looking for a CEO when BP finalized buying the public shares of Vastar.
Vastar had grown from an initial public valuation of $2.8 billion to
$8.3 billion when it was bought by BP.
Noble was smaller. The company was struggling with deepwater and it had far-flung assets across the world.
“The hand that we started with was not really good from an asset standpoint, but ultimately we built it out as a nice position in deepwater Gulf of Mexico,” Davidson said. “Onshore Noble was very weak and early on we acquired a company called Patina Oil & Gas.”
That gave the company a position in the Denver-Julesburg Basin. A third pillar of the company was in Equatorial Guinea. And then the company made major gas discoveries offshore Israel in the Mediterranean.
Davidson shed assets in the North Sea, China’s Bohai Bay, Vietnam and Argentina. The company’s assets in Ecuador were nationalized and Noble went through arbitration before getting some of its money back.
“A lot of it was portfolio cleanup, but it was great organization,” he said. The company grew from about 600 employees in 2000 to about 2,800 in 2014, when Davidson retired.
But while Davidson retired in May 2015 to give CEO Dave Stover a chance to run the company, he wasn’t ready to leave the industry. That August, he joined Quantum Energy Partners (now Quantum Capital Group) as a venture partner.
Davidson was also courted by New York-based private equity firms but figured he’d only be relevant for about six months before losing touch with the industry.
“What really attracted me to Quantum was that Quantum was closer to an oil and gas company than probably any other private equity company,” he said. And the reason is [President and CEO] Wil VanLoh’s belief that if you’re going to be a good investor in oil and gas, you better have a strong technical understanding of oil and gas. And so, he always supported a very strong technical team within Quantum.”
Still very much active with several Quantum portfolio companies—he’s chair of LNG company Mexico Pacific—Davidson sticks to the mission statement of Noble Energy, which was to better people’s lives.
What stands out over his long career is completely changing the energy independence of the State of Israel through Noble’s discoveries.
“They were literally burning coal and fuel oil for electricity before we made the natural gas discoveries in Israel,” he said.
Noble also was the first offshore operator in the Gulf of Mexico to win a permit to drill, despite the possibility of litigation, after BP’s Macondo spill. (Only later was it revealed that Noble’s non-operating partner in the project was BP.)
And Noble partnered with the Environmental Defense Fund and former Colorado Gov. John Hickenlooper for the first tests to measure methane emissions in any state.
“Some others of the industry were upset, but what it did was it gave enough confidence in the industry in Colorado, which some days they’re not too friendly to the industry, that they pulled back on some very bad potential legislation,” he said.
Davidson said he’s tackled all of his assignments the same way—making sure the values of the organization are right, “that you’re encouraging everyone” and doing the right thing for the right reasons.
“The outcome,” he said. “is usually much better.”
—Darren Barbee, senior managing editor, digital