Schlumberger Taps Chairman Who Sought to Bypass Oil Servicers
(Bloomberg) -- In an ironic twist, Schlumberger Ltd. is tapping as its chairman an executive who earned a reputation for building shale producers that bypass oil service companies.
Mark Papa, 72, who will take over as chairman of the world’s biggest oilfield service provider next month, helped give birth to the U.S. shale boom a decade ago by building Enron Corp. castoff EOG Resources Inc. into one of the nation’s biggest explorers. He’s now running Centennial Resource Development Inc.
In his new role, Papa will help Schlumberger’s next chief executive officer, Olivier Le Peuch, tackle an industry downturn as investors pressure producers to rein in spending and return cash to shareholders. Le Peuch, 55, and Papa will replace Paal Kibsgaard, 51, who’s stepping down as chairman and CEO.
A key Papa trademark is bypassing technology from the oilfield servicers, opting instead for in-house innovations. It’s what led Paul Sankey, then an analyst at Wolfe Research, to dub EOG under Papa’s watch the “APPL of oil,” referring to the trading symbol for Apple Inc. Papa did that again at Centennial, hiring key former EOG executives to help make technology one of the pillars of his new company.
“It wasn’t the service companies that provided the advances in shale technology,” Papa said with a chuckle in a 2017 interview. “They’re marketing that stuff and saying it was them, but it wasn’t the service companies that provided the technical breakthroughs.”
Papa has encountered some roadblocks at Centennial, the blank-check company he founded after retiring from EOG in 2013. Shares of the explorer have plunged 46% this year as it joins other producers in trimming spending amid volatile oil prices.
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