The question hanging is whether either company has the right structure, or indeed the right people, to handle the change.
As he was considering the future of Australia’s dynamic petroleum duo Slugcatcher even went so far as to imagine a changing-of-the-guard ceremony to make the switch.
Incoming Woodside personnel, fresh from assignments in Mauritania, Libya, or somewhere else dark and nasty in Africa, would hand the keys to the remote offices to the chaps from Santos as they ventured far afield.
That’s the funny side of the situation.
The more serious side is to ask whether senior management at either company actually understands what’s involved in a major shift in focus – starting with the most critical question: have you got the right people (or can you get any people?).
Before going too far with this job-swap image perhaps a little background might help.
Woodside has been Australia’s most ambitious foreign wanderer, much to the annoyance of its major shareholder (and frustrated marriage partner), Royal Dutch Shell.
Shell warned Woodside not go to Mauritania, but to become an Australian specialist with a list of potential liquefied natural gas projects to make Russian boss, Vlad Putin, puke.
But Woodside went and comprehensively failed. The company now wants to come home, having spent a decade or two recruiting people with specialist knowledge in African geology, politics and beers.
Santos, on the other hand, has been confined to base by South Australian politicians with brains the size of Riesling grapes.
Now, with a whiff of freedom in the air, but no guarantee that the grapes (sorry, politicians) will let the company loose, Santos is pawing the ground ready to expand around the globe – anywhere, in fact, so long as it’s not South Australia.
And that’s where management theory, staffing expertise, and accumulated knowledge, gets interesting.
What we seem to have is (a) an Australian oil company that has travelled the world and is returning home with a bad hangover, and (b) an Australian oil company which has been stuck at home with a bunch of grapes, and also has a hangover.
What does all this mean?
To Slugcatcher it either means great opportunities, or it means trouble on a stick.
Woodside is undoubtedly making the correct decision to return home. It has in its own backyard some of the world’s best LNG opportunities. As Homer Simpson might have said, “D’oh, even Shell knew that”.
Santos is also making the right decision. It has sucked the best liquids out of the Cooper Basin and desperately needs to gain life experience away from home – far, far, away from the claustrophobic, small-minded small town that is Adelaide.
But does either company have the skills to make the change?
Right now, in the opinion of Slugcatcher, neither has the right personnel structure. Woodside needs more Australians. Santos needs more foreigners.
If life was simple the two companies really could arrange a handover of office keys at Perth and-or Adelaide airport.
But life is never that simple. For starters, Santos awaits the decision of the South Australian parole board.
Woodside is more advanced with its moves, but must be going through a form of internal gymnastics to figure out who from the African projects fits into the Australian jobs – and is there even enough office space in the big new office block it occupies in Perth.
Whatever the outcome of this guard-changing exercise, one thing is certain: investors and critics will be watching closely for the first sign of people and projects not quite delivering what’s been promised.
