Engineering Professionalism Committee Ethics Sub-Committee 2006 Society of Petroleum Engineers.

Engineering Professionalism Engineering Professionalism CommitteeCommittee

Ethics Sub-CommitteeEthics Sub-Committee20062006

Society of Petroleum Society of Petroleum EngineersEngineers

Why Ethics and EngineeringWhy Ethics and Engineering

The engineer as a professional is The engineer as a professional is dedicated to improving competence, dedicated to improving competence, service, fairness, and the exercise of well-service, fairness, and the exercise of well-founded judgment in the ethical practice of founded judgment in the ethical practice of engineering for all who use engineering engineering for all who use engineering services with fundamental concern for services with fundamental concern for protecting the environment and protecting the environment and safeguarding the health, safety and well-safeguarding the health, safety and well-being of the public in the pursuit of this being of the public in the pursuit of this practice.practice.

This presentation brought to you by:This presentation brought to you by:

Ethics Sub-Committee Ethics Sub-Committee MembersMembers

Greg Rowe

Dean Warnken

Steve Hamburg

Wayne Wisniewski

How to Use the Material:How to Use the Material:For Self-StudyFor Self-Study

Read the first 11 slides of this presentationRead the first 11 slides of this presentation Display the first relevant “Display the first relevant “Realistic SituationRealistic Situation” ” questionquestion Think about:Think about:

What your action(s) would have been before reading the first 11 What your action(s) would have been before reading the first 11 slidesslides

What your action(s) would be after reading the first 11 slidesWhat your action(s) would be after reading the first 11 slides How you would explain your action(s)How you would explain your action(s)

Review the answer slide in yellow fontReview the answer slide in yellow font Continue through all 20 question and answer slidesContinue through all 20 question and answer slides Document date and location of review for future Document date and location of review for future

referencereference

Why should I study ethics?Why should I study ethics?

Adaptation for current business Adaptation for current business environment on corporate governance. environment on corporate governance. Increased governmental legislation on Increased governmental legislation on industry.industry.

Fulfillment of chartering, registration, or Fulfillment of chartering, registration, or certification requirements on Ethics certification requirements on Ethics training. Provide vehicle for required training. Provide vehicle for required training for SPE members.training for SPE members.

Better alignment with other professions Better alignment with other professions (Attorneys, Accountants, Physicians) (Attorneys, Accountants, Physicians) where public interest is involved. Other where public interest is involved. Other engineering organizations have ethics engineering organizations have ethics education for membership education for membership

Provide resource for SPE membership on Provide resource for SPE membership on ethics training and guidelines. ethics training and guidelines.

Provide suggested methods, materials and Provide suggested methods, materials and communications dealing with ethics:communications dealing with ethics: Section SpeakersSection Speakers University TrainingUniversity Training Web-based TrainingWeb-based Training Distinguished LecturerDistinguished Lecturer Audio-Visual Material for Training/DiscussionAudio-Visual Material for Training/Discussion Newsletter Articles for SPE SectionsNewsletter Articles for SPE Sections Article(s) for JPT Case Studies Article(s) for JPT Case Studies Outsider EducationOutsider Education

Ethics Decision FrameworkEthics Decision Framework

Ethics can be complex, without a clear Ethics can be complex, without a clear answer. The Decision Framework answer. The Decision Framework developed by the Ethics Sub-Committee is developed by the Ethics Sub-Committee is proposed to enable the petroleum proposed to enable the petroleum professional to make sound decisions on professional to make sound decisions on complex ethical issues. complex ethical issues.

Decision FrameworkDecision Framework

Ask yourself:Ask yourself: Would the resulting action be legal?Would the resulting action be legal? Would stakeholders see the action as responsible Would stakeholders see the action as responsible

stewardship?stewardship? Would I feel good about the resulting action?Would I feel good about the resulting action? Would I mind having information regarding the Would I mind having information regarding the

decision publicized?decision publicized? Have I consulted with peers/others regarding the Have I consulted with peers/others regarding the

perceived action and possible ramifications?perceived action and possible ramifications? Would the public view the perceived act as a Would the public view the perceived act as a

responsible professional action?responsible professional action?

Question and Answer Question and Answer SessionSession

Some Realistic SituationsSome Realistic SituationsQuestion 1Question 1

I was told that I could hire a consultant to I was told that I could hire a consultant to take care of getting all the permits we take care of getting all the permits we need from a foreign government. He need from a foreign government. He requested a $40,000 retainer and said that requested a $40,000 retainer and said that he would use the money to ‘help move the he would use the money to ‘help move the process along.’ Since we don’t really process along.’ Since we don’t really know where the money is going, do we know where the money is going, do we have to worry about it?have to worry about it?

Some Realistic SituationsSome Realistic SituationsAnswer 1Answer 1

Yes. You should know enough to find out if Yes. You should know enough to find out if your consultant is getting an unfair advantage your consultant is getting an unfair advantage on the competition. Is it customary for on the competition. Is it customary for conducting business in this foreign government conducting business in this foreign government or a one-time deal to get special favors? One or a one-time deal to get special favors? One must balance ethical considerations with the must balance ethical considerations with the realities of doing business in many foreign realities of doing business in many foreign marketplaces. Acceptable behavior in one part marketplaces. Acceptable behavior in one part of the world may be very different from your of the world may be very different from your normal operating practices at home.normal operating practices at home.

I have just received an invitation to attend I have just received an invitation to attend a hearing of a governmental/local authority a hearing of a governmental/local authority committee as an expert industry witness. committee as an expert industry witness. How should I respond?How should I respond?



You should use your best judgment as per the You should use your best judgment as per the expertise required to testify. By definition, an expertise required to testify. By definition, an expert is one that has achieved a high degree of expert is one that has achieved a high degree of skill or knowledge as a result of their experience skill or knowledge as a result of their experience and training. Will the testimony be in your area and training. Will the testimony be in your area of expertise? Do you have sufficient education of expertise? Do you have sufficient education and a long track record of industry experience in and a long track record of industry experience in this area? Does your company and/or peers this area? Does your company and/or peers recognize you as an expert?recognize you as an expert?

It is the last week in the quarterly reporting It is the last week in the quarterly reporting period. My boss wants to make sure we period. My boss wants to make sure we meet our numbers for the quarter, so he meet our numbers for the quarter, so he asked me to record an unconfirmed sale asked me to record an unconfirmed sale now that won’t be finalized until next week. now that won’t be finalized until next week. I guess this won’t hurt anyone – should I I guess this won’t hurt anyone – should I do what he says?do what he says?



You must make a judgment call. Is this a You must make a judgment call. Is this a common practice or a first-time request? common practice or a first-time request? Does it put your department at an unfair Does it put your department at an unfair advantage in the metrics? Would you advantage in the metrics? Would you mind if other departments or senior mind if other departments or senior management found out? It is suggested to management found out? It is suggested to consult peers on the proper way forward.consult peers on the proper way forward.

My team’s year-end results are ahead of My team’s year-end results are ahead of budget. A piece of new non-material budget. A piece of new non-material equipment is due to be purchased and equipment is due to be purchased and delivered in early January of the new year. delivered in early January of the new year. My plant manager has asked that the My plant manager has asked that the invoice for the equipment be accrued out invoice for the equipment be accrued out of this year’s budget. Is this OK?of this year’s budget. Is this OK?



Is this a common practice or a first-time Is this a common practice or a first-time request? Are you breaking any tax laws? request? Are you breaking any tax laws? Is this an illegal ploy or good, solid Is this an illegal ploy or good, solid financial engineering? It is suggested to financial engineering? It is suggested to consult peers and perhaps tax/finance consult peers and perhaps tax/finance professionals on the proper way forward.professionals on the proper way forward.

Every week we are required to test Every week we are required to test chemical discharges that are produced chemical discharges that are produced when we make a particular product. The when we make a particular product. The tests always come out the same, so tests always come out the same, so sometimes when work is very busy we sometimes when work is very busy we skip the tests and do them a day or two skip the tests and do them a day or two later if we can. Then, when we do the later if we can. Then, when we do the missing tests, we just back date the missing tests, we just back date the results. Since this helps manage our results. Since this helps manage our work-flow, is this really wrong?work-flow, is this really wrong?



Definitely wrong. Would you want to live Definitely wrong. Would you want to live next to a plant that followed this behavior? next to a plant that followed this behavior? Probably not. Back-dating quality-control Probably not. Back-dating quality-control measurements is unacceptable in any measurements is unacceptable in any situation and few things “always” stay the situation and few things “always” stay the same. Measurements are recorded to same. Measurements are recorded to ensure safe, legal operation of your ensure safe, legal operation of your business. No answer at all is better than a business. No answer at all is better than a back-dated entry. Don’t do this.back-dated entry. Don’t do this.

The company just seconded me to be the The company just seconded me to be the controller of a new production JV company. I controller of a new production JV company. I see competitors in the same marketplace see competitors in the same marketplace transferring crude at less than market price to a transferring crude at less than market price to a subsidiary of one of the joint ventures for resale subsidiary of one of the joint ventures for resale at market price to a third party. That can have at market price to a third party. That can have the effect of reducing taxes for the joint venture the effect of reducing taxes for the joint venture and increasing profits for one joint venture. and increasing profits for one joint venture. Should I suggest that the JV consider a similar Should I suggest that the JV consider a similar deal with one of my company’s subsidiaries?deal with one of my company’s subsidiaries?



You have a responsibility to do what is You have a responsibility to do what is best for your company. Is this a legal best for your company. Is this a legal loophole and/or acceptable practice in the loophole and/or acceptable practice in the jurisdiction? Will it facilitate an unfair jurisdiction? Will it facilitate an unfair advantage for your company or just get advantage for your company or just get them on equal footing with the them on equal footing with the competition? competition?

A former Company A employee who worked on A former Company A employee who worked on my team recently contacted me to request that I my team recently contacted me to request that I provide copies of some materials we worked on provide copies of some materials we worked on during his employment. In the course of this during his employment. In the course of this conversation, I learned that this former conversation, I learned that this former employee has copies of several binders and employee has copies of several binders and CDs with Company A materials and data we CDs with Company A materials and data we used in a project. I told this employee that I used in a project. I told this employee that I would get back to him/her. What should I do would get back to him/her. What should I do now?now?



If you told someone you will contact them, then If you told someone you will contact them, then you should follow your commitment. As far as you should follow your commitment. As far as the materials are concerned, you should ask if the materials are concerned, you should ask if they are proprietary materials that belong to they are proprietary materials that belong to company A or intellectual property resulting from company A or intellectual property resulting from your work together. You should also be familiar your work together. You should also be familiar with company A’s policy on intellectual property with company A’s policy on intellectual property as to what is & is not transferable and pass as to what is & is not transferable and pass along this information as appropriate to the along this information as appropriate to the former employee. If you are still in doubt, former employee. If you are still in doubt, disclose your activities to your superior(s) and disclose your activities to your superior(s) and seek the counsel of peers & other co-workers.seek the counsel of peers & other co-workers.

I have a large grass-mower at home which I have a large grass-mower at home which I’m lending to a friend. Is it OK if I borrow I’m lending to a friend. Is it OK if I borrow a Company A truck at the weekend to take a Company A truck at the weekend to take it to my friend’s house and then use it it to my friend’s house and then use it again in two weeks to bring it back?again in two weeks to bring it back?



Since this is a work truck, you should follow Since this is a work truck, you should follow company A’s policies on the personal use of company A’s policies on the personal use of company vehicles. There are many liability company vehicles. There are many liability issues to consider. You certainly should not be issues to consider. You certainly should not be using the truck to generate additional income using the truck to generate additional income outside of work. However, if it is a simple, one-outside of work. However, if it is a simple, one-time non-commercial request then you should time non-commercial request then you should fully disclose you request and ask for permission fully disclose you request and ask for permission from the proper authority at company A.from the proper authority at company A.

I have just joined Company A as a new I have just joined Company A as a new employee. My prior employer is one of employee. My prior employer is one of Company A’s largest competitors. Can I Company A’s largest competitors. Can I share some important confidential share some important confidential marketing information that I developed marketing information that I developed while working for this competitor?while working for this competitor?


You must follow your conscience as what You must follow your conscience as what is acceptable knowledge transfer. Your is acceptable knowledge transfer. Your intellectual property is yours to keep and intellectual property is yours to keep and may be transferred. However, proprietary may be transferred. However, proprietary information that you know is confidential information that you know is confidential should not be shared with out permission. should not be shared with out permission. You also have potential legal implications You also have potential legal implications if confidential information is shared, if confidential information is shared, especially if you signed a confidentiality especially if you signed a confidentiality clause with your former employer.clause with your former employer.


I have an idea to reduce subscription costs I have an idea to reduce subscription costs for trade publications. The office would for trade publications. The office would get just one subscription to each journal or get just one subscription to each journal or newsletter, which would then be circulated newsletter, which would then be circulated to everyone with instructions to copy any to everyone with instructions to copy any articles they want. Is this a good cost-articles they want. Is this a good cost-cutting measure?cutting measure?



Check each publication for their particular Check each publication for their particular policy.policy.

SPE’s policy is up to 5 copies of any SPE’s policy is up to 5 copies of any article for personal use.article for personal use.

We have someone on our team who is We have someone on our team who is hearing impaired. He is a great worker hearing impaired. He is a great worker and can speak but sounds very differently and can speak but sounds very differently than everyone else. Some people make than everyone else. Some people make fun of him behind his back. I find it fun of him behind his back. I find it embarrassing and bad for teamwork. embarrassing and bad for teamwork. What should I do?What should I do?


It is difficult, if not impossible, to control the behavior of It is difficult, if not impossible, to control the behavior of co-workers at all times. Also, offensive behavior is co-workers at all times. Also, offensive behavior is relative and takes on many different meanings, relative and takes on many different meanings, especially in a multi-cultural work environment. especially in a multi-cultural work environment. However, if you find this mockery in bad taste and However, if you find this mockery in bad taste and counter-productive to work, you should talk to the counter-productive to work, you should talk to the offending individual in private and tell them your feelings. offending individual in private and tell them your feelings. If the problem persists, you should comply with your If the problem persists, you should comply with your company’s code of conduct and report the offending company’s code of conduct and report the offending behavior to a supervisor. Also, at some point, you behavior to a supervisor. Also, at some point, you should inform the hearing impaired individual and seek should inform the hearing impaired individual and seek his assistance in ceasing the offensive behavior.his assistance in ceasing the offensive behavior.


I was working late last night at the office. When I was working late last night at the office. When I went to use the photocopier I found a small I went to use the photocopier I found a small stack of personnel records in the sorter. I stack of personnel records in the sorter. I noticed that the copies contained payroll noticed that the copies contained payroll information for our department. There was a lot information for our department. There was a lot of personal information on these forms. I didn’t of personal information on these forms. I didn’t want to get anybody in trouble, but I also didn’t want to get anybody in trouble, but I also didn’t think it was right that this kind of information was think it was right that this kind of information was left for all to see. What should I do?left for all to see. What should I do?


Unfortunately this is a fairly common Unfortunately this is a fairly common occurrence and there is great potential for occurrence and there is great potential for identity theft and inappropriate identity theft and inappropriate communication of personal information. communication of personal information. Put the personnel records in a safe place Put the personnel records in a safe place and immediately notify the responsible and immediately notify the responsible authority for this material. Disclose at the authority for this material. Disclose at the start of the next day of business and don’t start of the next day of business and don’t read anymore of the confidential read anymore of the confidential information while you are working late.information while you are working late.



You are offered tickets from a vendor to a You are offered tickets from a vendor to a local sporting event. Should you accept?local sporting event. Should you accept?

Some Realistic ExamplesSome Realistic ExamplesAnswer 13Answer 13

Accepting sporting tickets is a typical ethical dilemma that does not carry Accepting sporting tickets is a typical ethical dilemma that does not carry a one-size-fits-all answer. However, there are some guidelines that can a one-size-fits-all answer. However, there are some guidelines that can be relevant to most situations: be relevant to most situations:

First, what are your company’s rules? Is this stated in your code of First, what are your company’s rules? Is this stated in your code of conduct? Most companies forbid “extravagant” gifts of any kind. It is conduct? Most companies forbid “extravagant” gifts of any kind. It is also customary to avoid any “extra contact” with vendors during a also customary to avoid any “extra contact” with vendors during a contract tender period. Is the vendor giving you tickets from a “face contract tender period. Is the vendor giving you tickets from a “face value” purchase or are these a special, high-end purchase to a coveted value” purchase or are these a special, high-end purchase to a coveted event like the Super Bowl, World Cup, etc.? event like the Super Bowl, World Cup, etc.?

Probably the main ethical question to ask is whether accepting the Probably the main ethical question to ask is whether accepting the tickets is intended to be a simple gesture of appreciation or an attempt to tickets is intended to be a simple gesture of appreciation or an attempt to impact your judgment for a purchase. impact your judgment for a purchase.

As a final judgment, you must be able to live with yourself on the right As a final judgment, you must be able to live with yourself on the right course of action. If you have a simple gesture of appreciation that will course of action. If you have a simple gesture of appreciation that will not change your relationship with the vendor for better or worse, then not change your relationship with the vendor for better or worse, then you probably should go and have fun. If accepting the tickets will impact you probably should go and have fun. If accepting the tickets will impact your fair judgment, then you have an ethical dilemma and probably your fair judgment, then you have an ethical dilemma and probably should not accept the tickets.should not accept the tickets.

Sample Ethics Questions:Sample Ethics Questions:Question 14Question 14

A personal friend is a candidate for a job A personal friend is a candidate for a job with your company and you will potentially with your company and you will potentially be involved with the hiring decision. What be involved with the hiring decision. What should you do?should you do?


You should not let your friendship affect a hiring You should not let your friendship affect a hiring decision with your company if it gives them an unfair decision with your company if it gives them an unfair advantage. However, if your friend is also a advantage. However, if your friend is also a potential valuable resource to your company, it is potential valuable resource to your company, it is equally unfair to “penalize” your friend in a hiring equally unfair to “penalize” your friend in a hiring competition. competition.

It is always best to disclose your friendship to It is always best to disclose your friendship to everyone in the hiring process and to volunteer to everyone in the hiring process and to volunteer to be excluded from sensitive hiring conversations. It be excluded from sensitive hiring conversations. It is acceptable to share your friend’s qualifications is acceptable to share your friend’s qualifications and offer other outside references to assist in a fair and offer other outside references to assist in a fair hiring decision.hiring decision.

Consider recruitment incentive.Consider recruitment incentive.


You work for an operating company and an You work for an operating company and an old friend from college is now a senior old friend from college is now a senior manager with a service company. You are manager with a service company. You are working in a very busy area and there is working in a very busy area and there is robust competition for your well services, robust competition for your well services, including many competitive bids. What including many competitive bids. What should you do?should you do?


It is not ethical to give your friend an unfair It is not ethical to give your friend an unfair advantage over his competitors. advantage over his competitors.

It is best to disclose your friendship to your It is best to disclose your friendship to your supervisors. You should also have an agreement supervisors. You should also have an agreement with your friend to not discuss sensitive issues and with your friend to not discuss sensitive issues and avoid private meetings during contract tenders. avoid private meetings during contract tenders. “Common sense” goes a long way on this judgment. “Common sense” goes a long way on this judgment. Also, if it is a good friend, you should have better Also, if it is a good friend, you should have better things to discuss in private than work.things to discuss in private than work.

Follow your company’s guidelines for bidding Follow your company’s guidelines for bidding procedures. Consider recusing yourself from the procedures. Consider recusing yourself from the process.process.


You work for an operating company that is operating You work for an operating company that is operating a joint venture with a national oil company. Your a joint venture with a national oil company. Your company has expats to work with local staff to company has expats to work with local staff to perform the daily operations and field development. perform the daily operations and field development. The national oil company is the only operator in the The national oil company is the only operator in the country and there are no government safety or country and there are no government safety or conservation regulations. Operating standards are conservation regulations. Operating standards are well below your company’s published internal well below your company’s published internal standards for safety and environmental issues. standards for safety and environmental issues. What do you do?What do you do?


This is a difficult issue where one must balance business This is a difficult issue where one must balance business issues versus acceptable tolerance of relaxed safety and issues versus acceptable tolerance of relaxed safety and environmental standards. No laws are being broken and environmental standards. No laws are being broken and the national oil company obviously holds itself to a the national oil company obviously holds itself to a different standard from the international company. different standard from the international company.

In this situation it is most often best to have a realistic In this situation it is most often best to have a realistic view of your company’s influence on the operator.view of your company’s influence on the operator.

Do your best to achieve conformance with your preferred Do your best to achieve conformance with your preferred standard.standard.

You should ensure that there is full disclosure to your You should ensure that there is full disclosure to your senior management of the operating issues. It is also senior management of the operating issues. It is also good to have informal discussions with fellow expats on good to have informal discussions with fellow expats on what will not be tolerated under any circumstances.what will not be tolerated under any circumstances.


You provide engineering services to clients in You provide engineering services to clients in the fields of reservoir engineering and reserves the fields of reservoir engineering and reserves analysis and reporting and are paid for your time analysis and reporting and are paid for your time and reasonable expenses. Your client wants to and reasonable expenses. Your client wants to be provided a signed report showing that their be provided a signed report showing that their fields contain a certain level of reserves. You fields contain a certain level of reserves. You receive data necessary to make an evaluation receive data necessary to make an evaluation along with the client’s own reserves estimate along with the client’s own reserves estimate which is really the target they wish to see. which is really the target they wish to see. Should you take on this consulting project? Should you take on this consulting project?


Discuss with the client that your estimates Discuss with the client that your estimates may or may not match their expectations.may or may not match their expectations.

Explain your role or job as an independent Explain your role or job as an independent evaluator. That role is not to provide the evaluator. That role is not to provide the “expected” answer.“expected” answer.

Maintain your role as an objective third Maintain your role as an objective third party.party.

Your answer must be auditable.Your answer must be auditable.

Some Realistic SituationsSome Realistic SituationsAnswer 17 (con’t)Answer 17 (con’t)

You consider your preliminary reserves report to You consider your preliminary reserves report to be objective. It provides an estimate less than be objective. It provides an estimate less than the client desires. The client tries to “arm twist” the client desires. The client tries to “arm twist” you and implies that the invoice for your services you and implies that the invoice for your services might not be paid.might not be paid.

Discuss, on a technical level, the data set, field Discuss, on a technical level, the data set, field operations, and assumptions with the client.operations, and assumptions with the client.

If you cannot agree with the client, agree that If you cannot agree with the client, agree that you have reached an impasse, but payment you have reached an impasse, but payment should be made for the services provided to that should be made for the services provided to that point.point.


You consult as a petroleum engineer in the U.S. You consult as a petroleum engineer in the U.S. One recently completed client project concerns One recently completed client project concerns the evaluation of an oil field. Client “A” owned a the evaluation of an oil field. Client “A” owned a large working interest. You spent considerable large working interest. You spent considerable time analyzing the logs, well files, reservoir time analyzing the logs, well files, reservoir maps, volumetrics, drilling potential, etc. Later, maps, volumetrics, drilling potential, etc. Later, client “B” calls you for an evaluation of its assets, client “B” calls you for an evaluation of its assets, including the oil field evaluated for client “A.” including the oil field evaluated for client “A.” Client “B” lacks engineering and geological data Client “B” lacks engineering and geological data other than public data sources.other than public data sources.


First, is it a conflict of interest and is it ethical to First, is it a conflict of interest and is it ethical to take on the assignment for client “B” since you take on the assignment for client “B” since you earlier worked on the same field with client “A”? earlier worked on the same field with client “A”? Secondly, can you use the data you obtained Secondly, can you use the data you obtained from client “A” in making an evaluation for client from client “A” in making an evaluation for client “B”? “B”?

Ask client “A” if it is OK to use the information.Ask client “A” if it is OK to use the information. If not, use public data sets and prior learning If not, use public data sets and prior learning

points.points.


Your parent-based position is staff reservoir engineer at Your parent-based position is staff reservoir engineer at Company X. In the past year you have come into the Company X. In the past year you have come into the offshore West Africa asset group. Your office handles most offshore West Africa asset group. Your office handles most subsurface work, but the overseas office handles “hardware” subsurface work, but the overseas office handles “hardware” issues including facilities/platform engineering, design, and issues including facilities/platform engineering, design, and project planning. In your work you determine technical project planning. In your work you determine technical recoverable oil reserves of 150 million barrels. This fact is recoverable oil reserves of 150 million barrels. This fact is exciting to your management and they want the oil booked exciting to your management and they want the oil booked this year. While it seems reasonable for you to make the this year. While it seems reasonable for you to make the reserves booking, you know that the overseas office does reserves booking, you know that the overseas office does the project planning and economics, and you have not the project planning and economics, and you have not examined project economics, nor ascertained whether examined project economics, nor ascertained whether company financial commitments to develop have yet been company financial commitments to develop have yet been made. Your manager says all is okay in that regard and go made. Your manager says all is okay in that regard and go ahead and do it. ahead and do it.

Some Realistic SituationsSome Realistic SituationsQuestion 19 (con’t)Question 19 (con’t)

Can you book these reserves? Who or what Can you book these reserves? Who or what level of your company has the responsibility for level of your company has the responsibility for validating reserves and the economics of validating reserves and the economics of reserves? Can the ethics “ball” be bounced from reserves? Can the ethics “ball” be bounced from player to player in a corporation?player to player in a corporation?

Follow appropriate corporate, governmental, and Follow appropriate corporate, governmental, and professional guidelines.professional guidelines.

Assure yourself and provide documentation of a Assure yourself and provide documentation of a viable development plan.viable development plan.


Follow appropriate corporate, Follow appropriate corporate, governmental, and professional governmental, and professional guidelines.guidelines.

Assure yourself and provide Assure yourself and provide documentation of a viable development documentation of a viable development plan.plan.


You have been hired in mid-year as a division level manager You have been hired in mid-year as a division level manager of E&P assets in a major oil company. Of course the job is of E&P assets in a major oil company. Of course the job is new for you; also, your staff is fairly thin in experience but at new for you; also, your staff is fairly thin in experience but at least there is some continuity in knowledge of the gas and oil least there is some continuity in knowledge of the gas and oil fields. Your compensation package is salary plus bonus. fields. Your compensation package is salary plus bonus. Bonus is tied to “results:” exceeding production targets, Bonus is tied to “results:” exceeding production targets, reserves growth, and HS&E. The year has been good so far, reserves growth, and HS&E. The year has been good so far, but at the December meeting with your staff, covering but at the December meeting with your staff, covering reserves and production targets, you realize that there are reserves and production targets, you realize that there are problems. For one thing, the maps on which some major problems. For one thing, the maps on which some major reserves have been booked are wildly optimistic. In fact, they reserves have been booked are wildly optimistic. In fact, they show gas below lowest known gas. Also, production goals show gas below lowest known gas. Also, production goals are based upon these interpretations. You would hate to have are based upon these interpretations. You would hate to have a lost time accident when your boss hurts you for blowing the a lost time accident when your boss hurts you for blowing the reserves target and cutting the production goal for next year.reserves target and cutting the production goal for next year.

Some Realistic SituationsSome Realistic SituationsQuestion 20 (con’t)Question 20 (con’t)

Should you mention the mapping problem Should you mention the mapping problem to your management? Should you request to your management? Should you request new reserves maps? To what degree new reserves maps? To what degree should your short time on the job be a should your short time on the job be a factor? How much do you need to know factor? How much do you need to know before something becomes an ethical before something becomes an ethical issue? When is it ethical to plead issue? When is it ethical to plead ignorance?ignorance?


Rely on technical analyses of the problem and Rely on technical analyses of the problem and when convinced there is a discrepancy, report when convinced there is a discrepancy, report appropriately.appropriately.

Follow appropriate corporate, governmental, and Follow appropriate corporate, governmental, and professional guidelines.professional guidelines.

Assure yourself and provide documentation of a Assure yourself and provide documentation of a viable development plan.viable development plan.

When reporting, consider a good pair of running When reporting, consider a good pair of running shoes and a clear path to the exit.shoes and a clear path to the exit.

Thank you for participating in this Thank you for participating in this presentation on ethics.presentation on ethics.

For additional information on For additional information on professionalism and best practices, professionalism and best practices,

contact SPE Professional development at contact SPE Professional development at [email protected]@spe.org

Engineering Professionalism Committee Ethics Sub-Committee 2006 Society of Petroleum Engineers.

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