We need to study the history, which tends to repeat itself, says Julian Bowden, Senior Visiting Research Fellow – The Oxford Institute for Energy Studies, at the 2019 Energy Strategy Summit, an event organized by energynomics.ro.
If we think about the oil industry, going back 40 years to the early 1980s, the view of the world was very different. The oil was running out, in the oil companies’ view, the geopolitics were extremely difficult, as the Iranian revolution was just ending. Therefore, there was an urge for the oil companies to move away from oil.
„Until very recently, I was in BP. And what BP did minerals and nutrition. In minerals, it went especially in Australia, which had huge mining assets. In nutrition, it went primarily into animal feeds, and it was one of the largest producers of day old chickens. All the international oil companies did something similar. But it only lasted 10 years. And by the 1990s they were mostly back to the core, and a lot of assets bought in the 1980s were sold. It was back to what we know best. The question is why it was reversed?”
The first reason: insufficient marketing and market analysis. International companies were good at selling oil and gas, but they lacked skills in selling day-old chickens. Management did not fully engage outside the hard core of the business – as is very hard to integrate various businesses. Yet another reason is how we understand the market, as most companies use the same consultants, and their view was spread worldwide, said Bowden, in the opening of the first session of the 2019 Energy Strategy Summit.
