Why NHS Food Is Crap

One of the things you notice if you work long enough for large companies is that the quality of any given support service suddenly becomes a lot better if the people managing it are themselves users of that service.

When I worked in Africa, the senior management had their own company-supplied vehicles and drivers to take them to and from the airport; everyone else used a shuttle bus. With no senior management ever having to see what taking the shuttle bus was like, you can imagine the state of it.

You sometimes see a similar thing with travel departments. The administrative staff who work in them are usually local employees who generally don’t have to go on business trips in far-flung cities taking flights that leave at 7am. When you come to deal with them, this becomes painfully obvious.

Last week I saw somebody on Twitter complaining about the food in the NHS, and naturally somebody leaped in underneath to claim that this was a result of the catering being outsourced to private companies. There exists a mindset among some people that private companies cannot possibly provide a better service than public bodies because of the profit factor, the veritable planet of evidence to the contrary notwithstanding. But in the case of the NHS the food really is terrible, at least from what I’ve seen and heard.

Thanks to a decade or so traipsing around oil and gas offices, installations, and construction sites I’ve seen a lot of mass-catering and it ranges from extremely good to absolute shite. In most cases the catering has been outsourced to one of two companies: Eurest (a subsidiary of Compass, which is British) and Sodexo (which is French). I don’t know if they supply the NHS with catering services, but I’d be surprised if they don’t. What I found is that the quality of food is dependent on two things:

1. Budget

2. Whether the management or the management’s close colleagues eat it.

One the first point, the budget is the difference between reasonable food and very good food. With the oil industry swimming in money until fairly recently, the food in the canteens was generally pretty good, and offshore it could be outstanding (the food on the Safe Astoria was superb, thanks to a Singaporean chef).

But it is the second point that makes the real difference. The one place in the whole Sakhalin II construction project where the food was absolutely woeful was at the transit camp in Nogliki, halfway up Sakhalin Island. As the name suggests, it was a camp set up for people to spend a night or two in transit between Nogliki, where the train from Yuzhno-Sakhalinsk terminated, and the various construction camps that lay further to the north. Aside from a few poor bastards who were based there permanently, people were only supposed to be there for one or two nights, and it showed. I spent a night there between coming off the Lun-A platform and going to inspect the Piltun lighthouse.  The beds had been bought second-hand from the folk who dismantled the barracks at Auschwitz and fitted with dark brown sheets that were supposed to be that colour. Dinner consisted of a slab of grey meat and watery gravy by an Indian who told me that’s all there was. By contrast, the grub on the actual sites was excellent. Senior managers never, ever stayed at the transit camp.

The reason why the NHS food is crap is not because private companies are providing it, but because the people who administer the catering contract do not eat it. I’d be surprised if even the NHS staff eat it; if they do, they are low-level staff who don’t have much clout with the people in charge. Or perhaps the staff are fed in separate canteens? I don’t know, but the reason it is crap is because those who eat it have no influence over those who pay for it, and those who pay for it don’t eat it. If people want the food in the NHS to improve they should insist that the middle management eat it as well. It would improve overnight at no additional cost.

Of course, this is a long-winded version of Milton Friedman’s four ways to spend money, but it’s fun to spot examples of it in the wild.


The Fate of the Transocean Winner

Credit where it is due, Tom Lamont writing for The Guardian has done some splendid reporting here covering the fate of the semisubmersible drilling vessel Transocean Winner, which ran aground on the Hebrides last year. It is very long, but well worth a read.

I was pleased to see that, while the author reasonably writes about the environmental and societal issues surrounding shipbreaking, he resists any temptation to go off on a rant about fossil fuels or global warming. It is refreshing. It’s how journalism should be done.


Obama’s Arctic Ban Overturned

Donald Trump has signed an executive order aimed at reducing restrictions on oil drilling in the Arctic and Atlantic in order to “unleash American energy”.

reports the BBC.

It could undo a ban put in place by Barack Obama in order to protect swathes of the ocean from development.

A ban put in place via executive order in December 2016 is one of many pieces of legislation Obama petulantly signed in his last hours in office mainly to hamstring his successor. In other words, reversing the ban will take us back to the end of last year. Was America a vast wasteland where any human peaking out of the ash piles would be picked off by giant, mutant pterodactyls? No.

It is debatable how much income might be generated by a reversal of Mr Obama’s order. Worldwide prices for oil have dropped in recent years, with a review by news agency Reuters finding the amount of money oil companies spent in the central Gulf of Mexico’s annual lease sale dropped by more than 75% between 2012 and 2017.

Perhaps Trump, unlike Reuters and BBC journalists, is aware that the oil industry is cyclic and the period in question mostly covers a downturn.

David Jenkins, president of Conservatives for Responsible Stewardship, a non-profit conservation group, said: “The Trump administration’s hasty move today toward expanding offshore oil drilling … defies market realities and is as reckless as it is unnecessary.”

If it defies market realities, i.e. nobody is going to drill in these waters anyway, then what’s the problem? How can it be both reckless and unnecessary? Alas, thanks to the BBC’s policy of quoting environmental groups’ press releases without scrutiny, we don’t get to find out.


ExxonMobil’s Lobbying Efforts

This is a rather good tweet from ExxonMobil, presumably posted to set straight the dimwitted journalists who reported on Rex Tillerson’s confirmation hearing yesterday:

This is something ExxonMobil has long claimed, and was reported in Steve Coll’s Private Empire: ExxonMobil and American Power: their efforts in Washington D.C. are aimed less at trying to change government policy than 1) trying to figure out how government policy will impact ExxonMobil, and 2) inform lawmakers what impact those policies will actually have.

The difference might be too subtle for some, but this is different from ExxonMobil lobbying the US government to implement (or not) policies in order to benefit the corporation at the expense of everyone else.


Fracking Idiots

Via Tim Worstall, The Daily Telegraph dishes up some quality journalism on the subject of fracking:

Plans are being made for fracking to take place under Sherwood Forest where an ancient oak stands where according to legend Robin Hood and his merry men rested.

Ineos, one of the world’s biggest chemicals company, is poised to start looking for gas under Sherwood Forest, Nottinghamshire, in a move which could lead to it seeking permission to frack the area.

So are plans being made to start fracking, or is Ineos looking for gas?  Which is it?

Fracking is the process of drilling down into the earth before a high-pressure water mixture is directed at the rock to release the gas inside.

The Government has committed to fast tracking permissions for exploratory work amid forecasts that trillions of cubic feet of shale gas may be recoverable from underneath parts of the UK.

Fracking is not the same as exploratory work, which takes the form (at this stage) of seismic surveys which do not involve drilling.

Documents show Ineos – via their land surveyors, Fisher German – have been in correspondence with the Forestry Commission since August 2016, regarding access to their land.

Access in order to drill?  No.

If these plans progress, Ineos’ seismic surveys would pass within a few hundred yards of the Major Oak, a 1,000-year-old tree near the village of Edwinstowe.

Pass within?  These people have no idea what form a seismic survey takes, do they?

According to local folklore, it was Robin Hood’s shelter where he and his merry men slept and hid from the Sheriff of Nottingham in the 15th century.

In a 2002 survey, it was voted “Britain’s favourite tree”.

Information The Daily Telegraph considers more important to impart to its readers than the differences between carrying out a seismic survey and drilling a well.

Guy Shrubsole, a Friends of the Earth campaigner, said: “Is nothing sacred? By hunting for shale gas in Sherwood Forest, Ineos is sticking two fingers up at England’s green heritage, all in the pursuit of profit.

“The public wants to protect their English countryside and prefers renewable energy, not dirty shale gas, which will only add to climate change.”

And on the last day of 2016 a self-appointed expert declared what the public wanted, a practice which hitherto seemed doomed following high-level episodes of catastrophic wrongness regarding Brexit and Donald Trump.

Ineos confirmed that it was looking to start work in Sherwood Forest but insisted that great care would be taken to protect the Major Oak.

Tom Pickering, Ineos’s Shale operations director, said: “Any decision to position a well site will take into account environmental features such as the Major Oak and the planning process would also consider those issues.”

No decision on fracking under Sherwood Forest had yet been taken, he said, adding that Ineos would “undertake an extensive exploratory programme of seismic data acquisition across our wider licence area to better understand the subsurface geology including the fracture systems”.

Asked how Ineos would protect the trees of Sherwood Forest, Mr Pickering added: “When we do drill a vertical ‘coring’ well in the area, there are many general and specific environmental protections in place and we will of course abide by them.”

There was a time when journalists asked difficult questions that forced companies to reveal information that had hitherto been kept hidden.  Nowadays, journalists ask questions which can be answered by a cursory ready of a company’s website.


More Ruling by Decree from Barack Obama

Apparently Barack Obama doesn’t think America resembles a banana republic quite enough, and is keen to do something about that before he leaves office.  From the BBC:

Outgoing US President Barack Obama has permanently banned offshore oil and gas drilling in the “vast majority” of US-owned northern waters.

Permanently?  Just like that?

Mr Obama designated areas in the Arctic and Atlantic oceans as “indefinitely off limits” to future leasing.

The move is widely seen as an attempt to protect the region before Mr Obama leaves office in January.

Apparently eight years in office wasn’t long enough.

Supporters of president-elect Donald Trump could find it difficult to reverse the decision.

I imagine Trump’s supporters would find reversing Obama’s decisions difficult, yes.  Trump himself?  Maybe not so much.

Canada also committed to a similar measure in its own Arctic waters, in a joint announcement with Washington.

The White House said the decision was for “a strong, sustainable and viable Arctic economy and ecosystem.” It cited native cultural needs, wildlife concerns, and the “vulnerability” of the region to oil spills as some of the reasons for the ban.

Counterarguments such as jobs and energy independence from the rapidly imploding Middle East were presumably not considered.

But while Canada will review the move every five years, the White House insists Mr Obama’s declaration is permanent.

Read that again – “Mr Obama’s declaration is permament” – and remind yourself this is the USA and not Venezuela or Zimbabwe.

The decision relies on a 1953 law which allows the president to ban leasing of offshore resources indefinitely.

Really?  Which law?  The BBC doesn’t tell us, I suspect because this law allows for no such thing.

During the election campaign, Donald Trump said he would take advantage of existing US oil reserves, prompting concern from environmental groups.

But supporters have already suggested that any attempt to reverse the “permanent” decision outlined by the law would be open to a legal challenge.

Leave aside the idiotic belief that an administration can bind its successors and that a mechanism exists which allows Obama to declare something into law but doesn’t allow the next president to reverse it.  Let’s look at the fact that these idiots never learn.  If indeed Obama is allowed to make laws simply by issuing decrees from his office that completely bypass Congress and cannot be reversed, then Donald Trump is going to avail himself of those exact same powers in just over a month’s time, isn’t he?  Is that what everyone wants?

Reacting to the Arctic declaration, Friends of the Earth said: “No president has ever rescinded a previous president’s permanent withdrawal of offshore areas from oil and gas development.

That’s probably because no former president has been idiotic enough to do such a thing via last-minute declaration as he’s packing his bags to leave.  But I’m glad the clowns at Friends of the Earth understand the concept of precedent: they might find Trump is using this word a lot soon suffixed with the phrase “set by Obama”.

“If Donald Trump tries to reverse President Obama’s withdrawals, he will find himself in court.”

In which court?  On what charges?  Perhaps the BBC could have asked Friends of the Earth such basic questions.

However, the American Petroleum Institute said “there is no such thing as a permanent ban,” and that it hoped Mr Trump’s administration would simply reverse the decision.

Ah, finally somebody sensible.

Oil firms will still want to explore for further profits, though.

And there was me thinking oil companies explored for reserves.  Such high quality journalism is what Brits are forced to pay £3.5bn a year for.

And the next secretary of state, Exxon’s Rex Tillerson, may offer the industry a route round the ban by paving the way to an Arctic drilling deal with Russia.

What garbled rubbish is this?  Obama’s declaration – assuming it is worth anything – concerns US arctic waters.  Drilling in non-US waters is no more “getting around the ban” than drinking in a bar in Paris is “getting around” the Saudi ban on alcohol consumption.  And the “Arctic drilling deal” they refer to is an exploration pact between ExxonMobil and Rosneft, not “the industry” and “Russia”.

Very little oil drilling currently takes place in the Arctic region, as it is more expensive and difficult than other available options.

Well, yes.  It’s almost as if Obama’s declaration is mere posturing.


Shock as World Learns Rex Tillerson is an Oil Company Executive!

This is amusing:

Leak reveals Rex Tillerson was director of Bahamas-based US-Russian oil firm

screams The Guardian.

Rex Tillerson, the businessman nominated by Donald Trump to be the next US secretary of state, was the long-time director of a US-Russian oil firm based in the tax haven of the Bahamas, leaked documents show.

Tillerson – the chief executive of ExxonMobil – became a director of the oil company’s Russian subsidiary, Exxon Neftegas, in 1998. His name – RW Tillerson – appears next to other officers who are based at Houston, Texas; Moscow; and Sakhalin, in Russia’s far east.

I’m not sure what the issue is here.  Presumably the dolts at The Guardian had never heard of ExxonNeftegas, unlike pretty much everyone else in the oil industry who pays attention, and thinks it is some sort of shady shell-company set up to launder Putin’s personal cash float, or something.  The reality is a lot less interesting: ExxonNeftegas is merely the consortium set up to operate the Sakhalin I project, as its website tells us:

Sakhalin-1 is comprised of Russian, Japanese, Indian and American participants and is operated by Exxon Neftegas Limited, a subsidiary of ExxonMobil — the world’s largest non-governmental oil and gas company.

Anyone who has spent time in Yuzhno-Sakhalinsk would have seen the ExxonNeftegas building on the corner of Prospekts Mira and Kommunistichesky, and they would have encountered lots of young Russians employed by the firm each of whom had a business card with the company name and Sakhalin-1 logo printed on it.  (They may also have encountered a Canadian with more air miles under her belt than Voyager 2.  Let’s see if she’s reading this.)  Secretive it is not.

Maybe The Guardian takes issue with the fact that the information regarding Tillerson’s directorship of ExxonNeftegas had to be leaked for them to find out.  And they would have a point, were ExxonMobil not silly enough to include such top-secret information on their corporate website:

But as The Guardian tells us:

Though there is nothing untoward about this directorship, it has not been reported before and is likely to raise fresh questions over Tillerson’s relationship with Russia ahead of a potentially stormy confirmation hearing by the US senate foreign relations committee.

There is nothing untoward about this directorship, but as Guardian journalists didn’t know about it then it’s a scandal worthy of a newspaper column.

ExxonMobil’s use of offshore regimes – while legal – may also jar with Trump’s avowal to put “America first”.

Fair point, but it might be a bit of a stretch to complain that ExxonMobil isn’t insisting its Russian operations are headquartered in the United States.  The company’s registration in the Bahamas is probably new information to most: I knew about it because I have signed contracts with ExxonNeftegas Limited and their corporate address is stated in them (along with a stipulation that any arbitration will be heard in the courts of New York).  The incorporation in the Bahamas may seem odd, but it is not unusual.

ExxonNeftegas’ counterpart in that corner of Russia is Sakhalin Energy Investment Company (SEIC), which is the operator of the Sakhalin II project.  SEIC is registered in Bermuda, probably for much the same reasons ExxonNeftegas is incorporated in the Bahamas.  SEIC has been majority owned by Gazprom, the government-owned gas company, since 2007.  If there was anything untoward in these consortia being registered outside the Russian Federation on balmy island tax havens, the Russian government would likely have done something about SEIC by now given they have had control of the company for the past 9 years.  That they haven’t suggests there is nothing illegal or improper going on.  As The Guardian reports:

[ExxonMobil] said the oil firm had incorporated some of its affiliates in the Bahamas because of “simplicity and predictability”.

“It is not done to reduce tax in the country where the company operates,” Exxon said. “Incorporation of a company in the Bahamas does not decrease ExxonMobil’s tax liability in the country where the entity generates its income.”

Indeed.  Only among Guardian readers is this a story.


ExxonMobil is doomed, says the NYT

Exxon’s Next Chief Will Lead a Weakened Empire

The New York Times confidently tells us.

With Saudi Aramco hoping to take over as the world’s biggest listed oil group and rival Shell coming up fast, Exxon’s days as Big Oil’s unparalleled heavyweight are numbered.

Hmmm.  Let’s see the details of Saudi Aramco’s IPO and let it actually take place before we start writing off ExxonMobil, shall we?  Are the reserves up for sale, for instance?

And Shell?  On what measure are they catching up fast?  Sure, their purchase of BG for a vastly inflated $70bn makes them the largest gas player, but 2015 saw them make $1.94bn profit against revenues of $265bn whereas ExxonMobil made $16.2bn from revenues of $259.5bn.  ExxonMobil’s return on capital employed was 7.9%, Shell’s 1.9%.  Granted, Shell employs 93,000 people and ExxonMobil a mere 73,500 but only people who get their information from the New York Times would see that as a good thing.

Shell is a sprawling behemoth which still needs to undergo some serious restructuring, and doesn’t seem to have much of a strategy other than to become the world’s biggest oil company by biting off more than it can chew.  ExxonMobil, for all its size, remains a tightly-run ship.

The company’s market cap of around $380 billion is not much changed from a decade ago, and could soon be dwarfed by the state-owned Aramco, which analysts estimate could be worth up to $1 trillion if it goes ahead with an expected 2018 initial public offering.

Sure.  But Aramco is being forced into this IPO because despite sitting on top of the world’s largest oil reserves they are woefully short of working capital.  The privatised company might be larger than ExxonMobil, but we should remember that British Leyland was larger than Volkswagen.

Shell — now valued at more than $200 billion thanks to its 2015 acquisition of BG Group — may produce more barrels than Exxon by 2019.

Production is king?  What is this, 2012?  Perhaps the journos at the NYT have been left off the mailing list, but the majors stopped chasing production targets and switched to CAPEX reduction and profitability shortly after the oil price tanked in 2014.

Shell’s leader, Ben van Beurden, also wants to beat his larger rival in terms of total shareholder return.

Yes, we know Shell wants to “beat” ExxonMobil – that’s been their goal for years, although Lord knows why – but they’ve never been able to quite manage it.  What’s different now?

The good news for Mr. Woods is that Exxon still dominates in one key respect: return on average capital employed.

Over the last five years, Exxon’s return on that measure has bested Shell’s by nearly 7 percentage points on average. That is one imperial feature that will take time to erode.

Well yes, that is good news, isn’t it?  One is permitted to ask why the NYT is giving equal weight to the egotistical dreams of the Shell CEO versus ExxonMobil’s vastly superior financial performance.

Because those at the NYT are clueless and  don’t like ExxonMobil, that’s why.


The Real Challenge Facing Rex Tillerson

There is much speculation as to whether Rex Tillerson will make a good Secretary of State in a Trump administration, much of it to do with his relationship with Russia.  Personally I think ExxonMobil’s dealings in Russia are of no concern, and if anything make him more suited to the job.  (For some good articles on this subject see this from Steve Coll, author of Private Empire: ExxonMobil and American Power; this post from Streetwise Professor; and these two posts from The Dilettante).

I think Tillerson will do very well on the world stage in front of what passes for global leaders these days, and will do a fine job of representing America’s interests abroad.  Where I think he might struggle is when he stops looking upwards and outwards and casts his eye downwards through the organisation he will inherit.

ExxonMobil is extremely well run by any standards, let alone those of the oil industry.  It is by far and away the standout supermajor, and the only one that appears to have considered the full business cycle in its long term plans.  They haven’t even had to shed many workers during the downturn because they weren’t overstaffed in the first place.  ExxonMobil has a reputation for efficiency which Tillerson inherited from Lee Raymond, his predecessor as CEO, and it is well deserved.

ExxonMobil has achieved this largely by putting in place a rigid corporate management system containing ultra-strict procedures which are adhered to universally by a workforce who is under no illusions as to what happens to those who breach them.  This can often border on paranoia: I once saw an ExxonMobil staffer go purple in the face and demand to know from where I obtained a certain document, which was actually one that was specifically written to inform outsiders of a particular ExxonMobil internal process.  Nevertheless he snatched it from me as if it were reservoir data, leading me to joke for several years afterwards that ExxonMobil employees don’t give out business cards because they consider them proprietary information.

Like those of all large organisations, ExxonMobil’s employees are expected to toe the corporate line at all times, and departure from the company way of doing things is not tolerated for long.  In return for their cooperation and loyalty, ExxonMobil staff enjoy generous salaries, perks, work conditions, and career opportunities.  It also helps greatly that the ExxonMobil way produces some quite outstanding results, which cannot be said for all corporations which insist on absolute obedience and compliance from its workforce.  I can think of some exceptions, but if you ever come into contact with ExxonMobil employees they nearly all fit the same mold: well presented, intelligent, and ready to explain things with a PowerPoint presentation.  They speak always with caution, and are extremely aware of the applicable corporate policies and they refer to them constantly.  The attraction of remaining an ExxonMobil employee is too great for anyone to deviate too far from the norm, and any revolutionaries won’t last long.  Naturally, and like all oil majors, ExxonMobil can afford to recruit the best graduates from the top technical, oil and gas, and mining schools in the country.

It is one thing managing a giant corporation full of ultra-obedient high-flyers whose loyalty is beyond question and who can be fired immediately for the slightest breach of a corporate policy or directive, but quite another to manage public sector workers who are heavily unionised and many of whom shunned the private sector because it looked too much like hard work.  I don’t know what public bodies fall under the Secretary of State, or what the equivalent is of the British Civil Service is in the United States, but you can be sure that whatever there is will be chock-full of vested interests, entrenched archaic work practices, troublemaking employees, appalling inefficiencies, treachery, disloyalty, back-stabbing, dishonesty, and laziness.  These will be organisations of a type that Rex Tillerson will have no experience being in charge of: when he says “jump” as ExxonMobil CEO his entire workforce leaps into the air in unison; in his new job, be probably has to go around waking people up first only to hear them telling him that Kerry let them sleep until lunchtime before they go home crying about racism.

Rex Tillerson looks like a good fit for Secretary of State, but his greatest challenges might not be Russia, Iran, and China.


Another Nutjob in the Pipeline

Whenever the US gets involved in a conflict somewhere in the world there is always, always somebody on the American Right who will come out with some bizarre conspiracy theory involving a pipeline.  It’s always a pipeline.

Before 9/11 when the Taliban were running Afghanistan and blowing up statues of Buddha, the lunatics on the extremes of both Left and Right were saying that the US was supporting the Taliban because they wanted to build a pipeline through the country between Pakistan and, erm, somewhere.  They cited a report showing that Unocal, an American oil company now owned by Chevron, did once consider building a pipeline through Afghanistan but the project got nowhere near even the engineering phase.  They accepted without question, as these people often do, that US foreign policy is determined in part by medium-sized oil companies best known for gasoline retail.  Or at least it is when the Jews go for their lunch break.

Immediately following the American assault on the Taliban which removed them from power, the conspiracy theorists simply switched to claiming the reason for the attack was in order to build – you guessed it – this Unocal pipeline.  Oliver Kamm wrote a decent post covering this switch and the absurdity of it on his blog at the time, and it is worth reading.

I was reminded of this today when I was directed via another blog to this Twitter post:

It’s always about pipelines with these people.  They have this daft idea that pipelines are so valuable it is worth going to war just to build one.  How the US government is supposed to benefit from a pipeline, presumably carrying gas, from Qatar to Bulgaria(!) I don’t know.  Obviously whoever dreamed up this particular theory hasn’t heard much about LNG and the growing spot market, nor US shale gas.

You don’t need to be a fan of Obama or Clinton to find this level of political analysis from the American Right to be as stupid as anything the American Left can come up with.