Kemp: BP Acknowledges US Shale Is Different
By contrast, the focus onshore is on the need to be nimbler, more innovative and operate with far less cost, with faster decision-making and shorter project cycle times.
By insisting that the unit report separate financials from 2015, BP will be able to hold it accountable more easily.
BP has belatedly recognised there is not a good cultural fit between shale buccaneers and the petroleum engineers and MBAs in the rest of the organisation.
Interestingly, ExxonMobil seems to have known this from the start, and maintained its XTO shale unit as a separate business with a separate headquarters after buying it in 2010.
Managing shale development separately will not solve all the problems besetting BP and the other latecomers to the U.S. shale revolution.
It cannot alter the fact BP, like the others, appears to have overpaid for assets at the height of the boom or that gas prices may never reach the levels assumed when the deals were done.
But it is an intelligent way to reorganise the business and recognise, however late in the day, that shale plays really are very different and require culturally distinct organisations to develop them successfully.
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