When Vicki Hollub was starting out in her career in the oil industry in the early 1980s, one of the few women working on the rigs in Mississippi and Louisiana, she helped establish herself through her command of data. Specifically, data on US college football teams playing in the Southeastern Conference, the SEC, which include her own alma mater, the University of Alabama.
“I was an avid football fan,” she told a conference at Columbia University this month. “I knew just about every statistic there was for any team playing in the SEC. So I had a way of talking and connecting with the men I was working with, out on location and on the rigs.”
Almost four decades later, as chief executive of Occidental Petroleum, she is making the bet of her career on another set of numbers: the data on the performance of Anadarko Petroleum’s US shale operations.
Ms Hollub last week launched a bid for Anadarko with an enterprise value of about $55bn, roughly 15 per cent higher than the $48bn valuation given by the deal that its board agreed with Chevron earlier in the month. If she succeeds with that bid, which looks increasingly likely given the higher value of Occidental’s offer, she is going to need to achieve a sharp improvement in the performance of Anadarko’s operations to justify the price.
The bid is an ambitious move that fits with what is emerging as a characteristic of Ms Hollub’s leadership: her defiance of expectations. In her plan to transform the company, and in her embrace of action to address the threat of climate change, she has been a much more radical leader than seemed likely when she took over at Occidental three years ago.
When her appointment was announced in 2015, there was a widespread sense in the industry that Ms Hollub would be a steady if unexciting chief executive who would bring stability to the company after some turbulent years. Tensions between Ray Irani, chairman, and Stephen Chazen, chief executive, had flared out into the open in 2013, and after a boardroom battle and a shareholder vote Mr Irani was forced out. A long-serving insider — she joined Occidental in 1982 — with a measured and undramatic personal style, Ms Hollub looked like the safe pair of hands the company needed.
“She is unpretentious and thoughtful. There’s no chest-pounding,” said one industry observer. “She doesn’t need to assert herself. She’s a very smart, confident person.”
That style has led some in the industry to underestimate Ms Hollub, according to another person who knows her. “A lot of people thought that this was a diversity hire, just a PR stunt,” he said. “They sure know different now.”
The performance of Occidental’s shares, which were at about $75 when Ms Hollub took over, and are about $60 today, has been unremarkable. But the company’s operational performance, especially in the Permian Basin of Texas and New Mexico, has been more impressive. On average, Occidental’s shale wells in the region have produced 74 per cent more oil in their first six months than Anadarko’s.
Michael Wirth, chief executive of Chevron, sniped at that record last week, saying “some operators” put too much emphasis on impressive-looking early results, and missed the fact that “short-term production is not the goal”. Even so, Occidental seems to be doing something right. Over 2016-18 its cost per barrel in New Mexico dropped 23 per cent.
Meanwhile, Ms Hollub has been staking out a distinctive position for Occidental on the question of climate change. As many of her peers in the US oil industry have dragged their feet, Ms Hollub has been outspoken about the need to address the threat, and has set a goal of making Occidental “carbon neutral”: capturing greenhouse gases equivalent to the emissions created by its operations and its products.
“We feel like that’s the key to [the] sustainability of our business over time,” she told the Financial Times last month. “If you don’t have that, you almost don’t need to be in operation.”
Occidental has for a long time been a specialist in enhanced oil recovery, using carbon dioxide injected into wells to increase production. Ms Hollub spotted the opportunity in deploying that expertise to derive a double benefit: storing carbon dioxide in oil reservoirs to reduce emissions while also boosting output.
Last year Occidental was one of the first US companies to join the Oil and Gas Climate Initiative, an international industry group that works on ideas for cutting emissions. Ms Hollub’s decision that Occidental should join is widely credited with having provoked ExxonMobil and Chevron into signing up as well.
Julio Friedmann, an expert on carbon capture at Columbia University’s Center on Global Energy Policy, said there were solid business reasons for her to support action on climate change.
“There is no greenwashing involved,” he said. “She is genuinely committed to reducing the carbon footprint of the company’s products and operations, and also committed to shareholder value.”
If governments put a price on emissions, so that Occidental can be paid to take the carbon dioxide that it uses for enhanced oil recovery, the economics of its operations would gain a massive advantage. In the long term, that could mean a huge additional pay-off from the Anadarko assets.
Ms Hollub has talked about the inspiration she has drawn from the University of Alabama’s highly successful football team, known as the Crimson Tide. The point was to win not just single games, but a national championship, she told Forbes magazine in 2017. “It’s a culture and an attitude of not settling.” She is about to have to demonstrate how far she can live up to that ideal, not just by securing victory in the battle for Anadarko, but by making the deal pay off.