Alberta oil executives win leeway to switch companies
For the past two years senior executives of Canada's petroleum industry had to sit tight, unable to entertain lucrative job offers for fear of inviting legal action by irate former employers.Skip to next paragraph
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They can now breathe more easily and at the same time resume their "upward mobility," as the threat of potentially damaging litigation has largely been dispelled.
A landmark suit fought bitterly in the Supreme Court of Alberta, prompted by the departure of an employee allegedly in possession of sensitive corporate information, has been thrown out.
Canada's petroleum industry in the past was able to settle such conflict-of-interest situations amicably and always out of court. But as the stakes grew bigger of late -- in direct proportion to the rising wellhead value of crude oil -- personal relations within the industry became tense and in some instances downright hostile.
Competition for exper ienced geologists, petroleum engineers, and practitioners of virtually every other petroleum industry discipline remains keen to this day as the demands of a rapidly expanding industry continue to exceed the available pool of talent.
Alberta's West Pembina oil strike of February 1977, and the ensuing stampede for a piece of the action of the biggest discovery of the past decade, had triggered an unprecedented hunt for experts able to decipher the secrets of the deep-seated pinnacle reefs containing the black gold. Substantial salaries and "perks" offered by ambitious outsiders to entice senior officials of companies in the middle of the oil "play" had suddenly become the norm for this Canadian oil capital.
Senior officials of long service switch jobs virtually overnight. Many of the respected pillars of the Canadian petroleum establishment went on their own, setting up shop as private consultants.
John Leeson, an Englishman, had worked as a senior geologist for Chevron Standard Ltd., which first found the key to the West Pembina treasure chest. His career very much on a plateau, Mr. Leeson had discreetly let it be known that he would consider other job opportunities that held out the prospect of rising to the upper echelons of the petroleum business. Home Oil Ltd. signed up Mr. Leeson in late 1977 at about the same time the first rumors about West Pembina began to percolate through the industry's rumor mills. Both Home Oil and Mr. Leeson had maintained throughout the trial that his being privy to Chevron's endeavors in West Pembina had nothing to do with his appointment.
Nevertheless, Home Oil eventually became a major player in the West Pembina oil field. Chevron thought the successful Home-Leeson combination to be too much of a coincidence, and after unsuccessful private attempts to mediate a mutually acceptable solution, it finally went to court.
Dozens of top executives at various states of transition, either between companies or about to set up private consulting practices, found themselves at once immobilized.
Prospective employers and employees simply shied away from each other because they would not risk similar legal proceedings. The Chevron-Home-Leeson case has made Canadian legal history, as it directly linked a rival employer and a former employee with a specific corporate property: knowledge of West Pembina's complex geology.
The court chose to believe the defense -- that nothing improper took place during Home's negotiations with Mr. Leeson. It also accepted Mr. Leeson's statements that he had made no use of sensitive information contained in Chevron's geological and geophysical techniques used to zero in on the subterranean targets. In fact, the court praised Mr. Leeson's integrity for voluntarily absenting himself from managerial strategy meetings concerned with West Pembina.
Industry sources say traffic in senior personnel has already resumed and, if anything, the hiatus served to increase salaries and benefits both anticipated and offered. It is still not clear what Chevron might have demanded in compensation had the verdict gone the other way. West Pembina, not quite drilled up, is now credited with half a billion barrels of recoverable oil worth a staggering $15 billion at prevailing average world prices.
The wellhead value even at Canada's ridiculously low oil prices comes to a respectable $6 billion, at $13.75 (Canadian) a barre, most of which under certain circumstances, perhaps, might have accrued to Chevron.
Chevron managed to remain in the West pembina field only by diluting its interest in choice tracts of land and paying hefty bonuses to fend off intruders.