Another Clueless Politician

This time in Australia:

WA Premier Colin Barnett was quoted in local media on Tuesday as saying he believed the environmental risks with [Floating LNG] were higher than piping offshore production to onshore infrastructure.

“I don’t think it is safe environmentally to have such a massive offshore production and storage facility for gas and oil,” he was quoted as saying in The West Australian newspaper.

“Hopefully, it never will but accidents do happen, like the Gulf of Mexico and also Montara.”

Where to begin?

Okay, storing large quantities of oil offshore does pose an environmental risk.  But Shell’s Prelude FLNG – which will be the world’s first – is expected to produce 35,000 barrels per day of condensate (similar to crude oil, but has a tendency to “flash” and evaporate, at least in part, when spilled).  Any oil spill offshore Australia would be bad, but it’s hard to see how the risk of storing a week’s production (about 250,000 barrels) represents a risk unique to a stationary FLNG facility when you have oil tankers moving about the place carrying twice that and more.  By all means worry about the risk of an oil spill from an offshore vessel, but don’t single out FLNG.

However, most of what is stored in an FLNG facility is, as the name suggests, liquefied natural gas.  I’m not sure exactly what the environmental impact of spilled LNG is, but it is a heavy gas which gets carried by the wind until it is either dispersed or ignites with an almighty bang.  The main risk associated with LNG (both at the liquefaction train and the import terminals) is leaking gas being carried into a built-up area, where it then ignites.  You really don’t want that.  But as for the effect of the gas on the natural environment, it’s hard to see what the concern is, even if the leak is subsea: the gas will merely float in a bubble to the top. I’m not sure you’d want to be a fish caught up in a rising bubble of LNG or a bird flying into the gas cloud, but we’re not going to be getting marine life destroyed in a replay of Exxon Valdez with FLNG.

Mr Barnett mentions The Gulf of Mexico – presumably Macondo – and Montara.  Both of these spills came from drilling rigs, which will be used offshore Australia regardless of whether FLNG is used instead of an onshore facility.  You need to drill the wells to supply the facility with oil and gas, there’s no avoiding it, and if the reservoir is offshore, then you need to drill offshore.  Building the LNG plant on the beach isn’t going to help in that regard.  Also, both incidents mentioned involved oil wells.  Whereas there will be some condensate production on Prelude, most of what is coming out of the wells will be gas, which as the Elgin-Franklin leak in the North Sea earlier this year showed, doesn’t pose anywhere near the same environmental risk as oil.

Assuming Mr Barnett isn’t just spouting nonsense because that’s what politicians do, I suspect his comments are related to the rocketing costs of Australia’s onshore projects and the decisions of an increasing number of companies to put the facilities offshore, having first constructed them abroad.

BP Men Facing Manslaughter Charges

A quick note before we begin: my comments here relate to the oil and gas industry in general, and are based on my personal experience and conversations with other people.  They do not reflect any particular country or company, least of all my own employer.  These opinions are not a specific critique of any individual person, project, or practice, and inevitably exceptions will number in the thousands.  Nor am I writing them out of frustration or anger.  They are merely frank observations of an imperfect industry which needs to improve, and I don’t think the industry will be well served if its participants deny its shortcomings, or are not able to engage in self-criticism.

This story is worth paying attention to:

The US Justice Department has unsealed federal grand jury indictments against three BP employees who will face criminal charges including manslaughter, violating the Clean Water Act and lying to Congress in connection with the 2010 Macondo disaster.

BP’s top two company men on the Deepwater Horizon rig, Robert M. Kaluza, 62, of Henderson, Nevada and Donald Vidrine, 65, of Lafayette, Louisiana, have been indicted on 23 counts, including involuntary manslaughter and violating the Clean Water Act, officials said at a press conference with Attorney General Eric Holder in New Orleans Thursday


Attorneys for the accused said their clients were innocent of the charges, saying it was misguided to dole out blame for a complex disaster on a few individuals.

“It is almost inconceivable that any fair-minded person would blame this hard working and diligent man for one of the most catastrophic events in the history of the oil business.” Vidrine’s lawyer, Bob Habans, said in a statement.

The indictment alleges the company men were “grossly negligent” by mishandling pressure test information and failing to call in help to prevent the blowout that killed 11 workers.

They face maximum possible sentences that could send them to prison for the rest of their lives: 10 years for each seaman’s manslaughter count, eight years on each involuntary manslaughter count and up to a year in the Clean Water Act count.

Among other things, the workers failed to call engineers onshore when tests indicated the well could be insecure, did not account for abnormal readings during the testing and accepted a “nonsensical… bladder effect” explanation for the test results. This all paved the way for the withdrawal of the drilling fluid and cement casing breakdown that led to the blowout, the indictment said.

My first reaction is to feel somewhat sorry for two men who are now facing charges which could see them ending their days in jail for only doing their job.  I went into considerable detail in this post about the decisions which were made on board the Deepwater Horizon, and the pressures which oilfield workers face when making what are essentially judgement calls.

But one thing surprises me more than anything: the age of Robert Kaluza.  In my earlier post, I quoted another article:

[A] BP manager overseeing final well tests apparently had scant experience in deep-water drilling. He told investigators he was on the rig to “learn about deep water,” according to notes of an interview with him seen by the Journal.

A little after 5 p.m., to check the well’s integrity and whether gas was seeping in, rig workers did what is called a “negative pressure test.” It was supervised by a BP well-site leader, Robert Kaluza. His experience was largely in land drilling, and he told investigators he was on the rig to “learn about deep water,” according to Coast Guard notes of an interview with him. BP declined to comment on his experience.

At the time I assumed he was some high-flying careerist with another 20 years to go.  But it turns out he was around 60 at the time of the accident.  So what the hell was he doing being sent to the Deepwater Horizon to “learn about deep water”?  You send guys of 25 and 30 to gain experience in new areas, preferably under the watchful eye of somebody much older who knows the ropes.  But you don’t send blokes in their 60s into unfamiliar situations for the learning experience.  This sounds like nonsense to me.  I can only speculate as to why he was given this assignment, and that is exactly what I will do now: I expect BP had nobody else around to do the job, so just threw in anyone they could find.  And if you don’t believe this is common practice in the global oil industry, then you’ve not worked in it.  I’ll be keeping a close eye on the court proceedings to see if the reason for his assignment to the Deepwater Horizon is addressed, because there is a good chance his inexperience – and any difficulty BP had in filling the position or reluctance to take the job on his part – will be key to his defence.

And as I predicted in my earlier post, the senior BP company man on the rig is getting clobbered.  As I said at the time:

So, my point is that many of the decisions made in oil and gas are judgement calls, and those who have to make them are expected to shoulder a degree of risk and responsibility.  For this reason they are handsomely rewarded, which is why it is so frustrating when you encounter somebody who won’t make a decision but is happy enough to draw the salary for doing so.  Mr Vidrine would have been perfectly aware of the personal responsibility he was taking on himself in making the decision, and he will have to explain to the investigators the process by which he made his judgement.  If he can convince the investigators that his judgement process was sound and each competing factor was adequately assessed he stands to come out of this all right.  Not exactly smelling of roses, but all right.

Which under the circumstances based on the evidence presented in the article, is going to be a pretty tall order.

This is pure speculation on my part, but we might find that several similar warning flags had been raised in times previously and safely ignored.  One of the many dangers in the oil and gas business is doing something wrong several times without consequence, and eventually so many times you get used to doing it that way.  And then one day it catches you out.  Maybe we’ll learn that Mr Vidrine had made similar judgement calls previously that paid off, saved the project a few million each time, and earned him a hearty slap on the back and a Leatherman from his bosses?  If so, it’s going to be hard to put the entire blame on him personally.

What will be key to Mr Vidrine’s defence is the degree to which his actions were his alone, and the degree to which they can be credibly argued as representing the explicit and implicit wishes of BP’s management.  I find it highly unlikely that Mr Vidrine was a rogue operator who willingly and knowingly acted against the wishes of BP’s management.  I think it far more likely that he acted in a manner which he thought was in accordance with the wishes of BP’s management, but now finds himself in the dock trying to prove it whilst – probably – that same management furiously denies ever having expressed such wishes.

Which brings us to an interesting conundrum which many oil industry workers face.  As a manager, engineer, or even a lowly worker in the oil and gas business, you have not only a right but a duty to ensure the work you are involved in is safe.  In most western companies, all employees are empowered to intervene in any situation they feel is unsafe and stop the proceedings.  Every employee is expected to only partake in work which has been properly assessed and judged by competent persons to be safe, and to refuse to do so otherwise.

At least, that’s the theory.  Unfortunately, the practice often looks quite different.  Enormous pressure is put on employees to complete “urgent” works on time, with the heavy implication that achieving this goal is more important than safety or quality.  Of course, this is never explicitly said nor written down, but the implication and the pressure is very real.  Cultural aspects come into play a lot, especially with workers from hierarchical societies in Asia and Africa where the “boss is always right”.  Despite the soothing words from management in the weekly safety bulletins, there exists a genuine fear of reprimand, poor performance ratings, or dismissal if a worker defies management instructions on safety or quality grounds.  Nobody wants to be the guy who holds up the job and costs the operation a million quid because he wanted to double check that something wasn’t going to go horribly wrong.

The main reason for this is that by virtue of the incredible value of what is produced, even a small delay results in millions of dollars of lost revenue.  A deep water drilling rig costs over $500k per day, and even that isn’t huge compared to lost production from delays in a well coming onstream.  Even a modestly producing well at 10k barrels per day represents $1.2m at recent prices.  You delay something by only a few hours and the lost production and the rig costs are already well over $1m.  When you’re talking about large integrated projects producing 100k+ barrels per day, any slippage in your “first oil” date is going to be hitting you in the pocket to the tune of $12m+ per day.  Little wonder those offshore are put under pressure by the management on the beach, who have partners and investors to satisfy.

So going back to Mr Vidrine’s predicament, if he can demonstrate that safety at BP was often subordinate to production as practiced and endorsed – even if not officially – by management, then we might find he is not the last BP boss to be hauled into court.  However, even if this is the case, it is unlikely to save him – as the company man on the rig, he is expected to make the right decisions, in defiance of his superiors if need be.  Now if he made a judgement call to the best of his knowledge which turned out to be wrong, then he really is an unfortunate soul.  But chances are, he knew he was running a risk and is now wishing to hell that he had the balls to go along with the advice of his contractors even if it meant incurring the wrath of the management over cost and schedule overruns.  Unfortunately, with careers made or broken on such decisions, and it being awfully difficult to point to people who would otherwise be corpses in defence of your actions, such courage is rare among oil company employees.

So what should be done?  In my opinion, there needs to be a corporate culture instilled across the industry whereby safety and quality really is placed above production – in practice, not just in words.  Anybody who has worked in the oil industry will tell you umpteen examples of a corporate or managerial directive telling you safety is the top priority, and before the day is out another set of (usually verbal) decisions are made which demonstrate that actually, safety is not the first priority after all (and sometimes not even the second or third).  Management directives need to be consistent with subsequent managerial decisions, and top management need to demonstrate that safety really is top priority by – if necessary to reduce the risk of an accident – losing production.  Executives of oil companies need to remind their investors that unforgiving, hell-for-leather financial performance expectations can lead to catastrophic incidents like Macondo which came close to eliminating the entire company, and remind them again that such behaviour is not what they bought into when choosing to invest in a responsible oil company.

Management should also drive a culture whereby employees have the courage to speak up and challenge their superiors on matters of safety and quality without being dismissed out of hand or belittled.  Employees should be made to understand that they are not obliged to endorse, approve, sign, or authorise anything unless they are fully satisfied that it represents a minimised residual risk and sound industry practices, and management should put in place procedures and systems to ensure they are never asked to do so in the first place.

But mainly, the major step which needs to take place is an industry-wide reconciliation of “safety” and “production”.  By repeating over and over the “safety first” mantra, the subject has become to a large extent divorced from the actual purpose of the company, i.e. hydrocarbon production.  The prevailing culture therefore is often one by which “safety” is addressed first with posters, meetings, and statistics and once that’s out of the way and the box ticked, everyone can get down to the more serious business of “production”.  In my opinion, this is the wrong approach as it reduces safety to a series of exercises which are too often removed from the context of production.  Safety should consider production activities as much as production should consider safety.  One cannot be considered independently of the other.  I would much rather see oil companies move their priority to one of “safe production”, which would go a long way to clarifying what the company stands for and minimise the instances in which safety and production conflict with one another.

“Safe production”.  You heard it here first.

(And for my part, I pinched it from a colleague.)

Managing Contractors in the Oil Industry – Part 2

Part 2 – Respect your contractor’s technical knowledge.

There are two reasons why oil companies subcontract work.

The first is when you know how to do a job, but you don’t have the manpower to carry it out.  For instance, no oil company has enough engineers and draftsmen to design even a small oil and gas facility, even if they have the technical expertise to actually do so.

The second is when you don’t have the necessary technical expertise (mainly because the area concerned does not fall within an oil company’s core business) and so you need to engage somebody who does, and it is this latter case which I will talk about now.

You must start by understanding that the reason you have hired this contractor is because he knows how to do the job and you don’t.  He is an expert in his field, and you barely know what field you’re standing in or if there is a bull lining itself up behind you.  Therefore, if you are sensible, you will listen to what he advises and restrict your role to identifying a vehicle by which his advice can be put into practice at an acceptable cost.  You may and you should ask clarification questions, and you may ask him to explain in precise detail every aspect of his proposal, and if he is any good he will be quite happy to oblige.

Now in these cases you do run the risk of being ripped off by a contractor who realises that you don’t know his business.  You could end up being sold a far more expensive solution than you actually need, but there are various ways to minimise (note I didn’t say eliminate) this.  For instance:

  1. Tender the work.  If you know enough to put a scope of work together, then get several companies to bid.  Unless all the contractors have formed a cartel, what you get would be around about a market price.
  2. Find out whether a similar job has been done before, and see what it cost.  But be sure to identify any major differences between that scope and yours.
  3. Phase the work: tell the contractor that you will give him Phase 1, which is to prepare a scope of work document for Phase 2; and that Phase 2 will most likely go to him but might be tendered if you feel the proposed workscope is excessive or you are being ripped off.  This will give the contractor a strong incentive to give you a fair proposal in terms of scope and cost.  I’ve done this on a job recently, and it allowed us to obtain crucial information about the works without committing the whole project cost.
  4. Best of all, use a contractor you know and trust.  Nothing can beat working with people you know who have done the job before to your satisfaction.  Or at least, try to get feedback from colleagues in the industry about the performance of potential contractors.

So in summary, what you should do is to listen to what your contractor proposes but remain on your guard, especially if you are not familiar with the contractor in question; you should ask pertinent questions about various aspects of the proposal, and listen to the answers; and you should structure the contracting process through which the work will be awarded in such a manner as to minimise the risk of your contractor exploiting your relative lack of knowledge.

What you should not do is smugly sit there assuming that because he works for a contractor he must be as thick as pigshit compared to you who, working for an oil company, must be ten times smarter on all subjects because that is what you were told during your graduate induction.  You should not second-guess every piece of technical advice he is giving you, and make condescending comments like “Well, I don’t think that is really necessary” or “You need to demonstrate…” when you have not the faintest idea what you’re talking about and your contractor, who has been doing this all his life, advises you do something so mundanely commonplace that he can’t believe it’s even being discussed.  All you will do is run a flag up the pole saying you are either to be ripped off magnificently or left well alone.

I have personal experience in being grilled by a manager of an international oil company regarding equipment I was proposing to mobilise for a job.  This took the form of him reviewing my list of equipment (all of it pretty basic), none of which he could identify, demanding a justification of why it was required, and then sneering at my justifications with the heavy implication that it wasn’t needed.  This wouldn’t have been so bad, but he had with him a trade supervisor from his own department who knew his stuff inside and out, had reviewed the list with me the day before, and was strongly advising his boss to stop fannying about and go ahead.  Had I been that manager, I’d have gone along with whatever the supervisor said.  But most of them, driven by pure ego and an inflated idea of their own understanding of a situation, wouldn’t lower themselves to acting on the advice of a mere supervisor.  The meeting ended with the supervisor being as frustrated as me.

What you also should not do is start telling the contractor how to do his job.  You should make clear the project intentions and expected outcomes or deliverables in the scope of work, and identify applicable standards and any specific peculiarities you want incorporated.  And then you should leave him to do his job.  After all, he’s the expert, which is why you hired him.  Unfortunately, there are a lot of people working for oil companies who hire an expert and then go on to dictate to him how he should execute the work.  I know one instance whereby somebody, who didn’t know very much about the subject in question but assumed he did, hired a contractor to carry out some very specialist work – and then proceeded to issue instructions as to how the calculations should be done, what factors to include, and what materials to specify.  Had I been that contractor, I’d have been tempted to ask “Why did you hire me if you’re the f***ing expert?!”  Unsurprisingly, the job ran into serious problems later on as the deliverables were found to represent a mixture of specialised engineering by experts and the interference and unwise inputs from a client who didn’t have a clue.

There are ways of making sure your contractor does a good job; second-guessing their proposals, telling them how to do their job, and assuming you are superior by virtue of your position in the contracting chain are not among them.

(Part 1 is here.)

Project Costs Blow-Out

Upstream Online reports on a project whose budget has been blown to the tune of $20bn:

The paper cited … union demands, high-cost local manufacturing and productivity issues as the reasons behind the expected cost increase.

Union demands?  Productivity issues?  This must be Nigeria, right?

Erm, no.

It’s Australia.

It appears it’s not just African countries which seem determined to kill the goose that lays the golden eggs.  Maybe they should send Oprah to Barrow Island?

Of course, nobody saw this coming.  Nobody at all.

Managing Contractors in the Oil Industry – Part 1

One of the main tasks in my current position is to manage contractors, i.e. companies to whom we are outsourcing work, on behalf of my employer, a major oil company.  In fact, this is pretty much the main role for a lot of people working for major oil companies, as they are set up more to manage works than execute them.  Almost everything is outsourced, and so the management of contractors is essential to the operation of any department in an oil company.  But somewhat surprisingly, this is an area in which oil company employees are often very weak, and you’ll be hard pushed to find any formal training which contain what I consider to be the fundamentals of managing contractors.

One of the reasons for this is that oil companies like to recruit people fresh from university, blank canvasses ready and willing to be turned into a production-line automaton in the service of the Company.  Most managers (I would say well over half) in a major oil company have been recruited straight from university, and hence have never worked for any other company.  In my case, since university, I have worked for a telecoms giant which collapsed within 6 months of my joining (not my fault!); a third-rate American risk and engineering consultancy which stayed in business largely because its parent company reaped the financial rewards of protectionist policies back home; a rough and ready scaffolding and insulation company whose coarseness did not prevent them from being able to do a pretty damned good job when it came down to it; an independent oil and gas operating company, albeit managed by a supermajor, which was a hoot to work for; a reasonable brownfield engineering firm whose Sakhalin operations were thankfully not typical of the company as a whole; and now a major oil company.  With the exception of a major EPC contractor like Fluor or Foster-Wheeler and specialist vendors, I have covered pretty much the whole contracting food chain in the oil and gas business, albeit only for short periods in each one.

It’s drawing on this wide, albeit shallow, experience that enables me to do my job and bring to you a multi-part guide on how to manage contractors if you find yourself working for a major oil company.  Additional parts will be added from time to time.

Part 1 – Understand how to negotiate.

Firstly, learn what your contractor does and how he makes money.  Understand that contractors make money by employing human capital to directly produce something, which is then sold.  Contrast this with the fact that oil companies make money by opening a tap and flogging what comes out the end.  Understand that whereas the profits of an oil company are wholly unrelated to the utilisation of human capital, for contractors the two are almost always one and the same.  So whilst you in your comfy oil company seat do not feel the wasted costs of ten blokes sat around doing nothing, or do not see the costs of bringing an additional five bodies onto the job, a contractor will live and breathe this concept from day one.  If you want him to do extra work, he will need more money.  If you want him to do something different, he will need more money.  If you want him to take on commercial, contractual, or technological risk, he will need more money.  Finally, if you want him to do some work then you must pay him.  There is no such thing as a free lunch.

One of the most annoying habits of oil companies (and some EPC contractors) is to immediately ask for a 10% discount on commercial figures submitted in response to a call for tender.  This is pathetic, yet is sadly all too common.  Somebody in the contracts and procurement department thinks he is saving the company 10% on costs expended, without having to put any effort in himself.  Good, yes?  Well, no.  If a contractor is going to reduce his costs across all items by some arbitrary amount, then he is going to reduce his effort expended on that job by that same amount.  Oh, he’ll not tell you that he’s skipping NDT inspections, using second-hand parts, or not bothering with functional tests to get his costs down by 10%, but that’s what he’ll do.  So what part of the job does the client want removed?  The smart-arse in contracts and procurement doesn’t know, as he thinks the contractor will take the hit out of his profits.  The contractor isn’t going to tell you which corner he’s cut, so it’s up to the client to find out when the equipment or design fails in mid-operation costing several million dollars in lost production.  In order to save 10% on a $50,000 job.

You need to understand that buying engineering or oilfield services is different from buying soya beans in a Lagos market.  If somebody offers you a kilo of beans for 1,000 Naira in Lekki market, then it is fair enough to haggle down the price of those beans as you’re still going to be getting a kilo of them.  But if you get offered a kilo of new potatoes in a Tesco in Manchester for £1, and you refuse to pay more than 50p, then you’ll be going home with half a kilo by the time the deal is wrapped up whether you realise it or not.  Buying oilfield services has far more in common with a British Tesco than a Nigerian farmers’ market, but surprisingly few people in the industry understand this.  Part of the problem is culture and egos (or both, to the extent that the former often drives the latter). There are some cultures in this world that forbid anyone with any self respect from accepting the first price he is offered.  Like the comical scene in Monty Python’s Life of Brian, “you have to haggle”.  But there’s a big difference between haggling and negotiating a price.  Haggling is arguing about the price assuming the product stays the same.  Negotiating a price is the process by which you arrive at a product and price acceptable to both parties.  The problem with haggling is the person on the receiving end often finds out that what he’s bought isn’t what he thought it was.

The added value a decent manager can bring to an oil company is the ability to break down a contractor’s price, identify which items or services being offered were requested or are desirable, and ascertain whether the price being charged for each is reasonable given prevailing market conditions.  But first, he needs to look at where the actual costs lie.  If you are looking at a total price of $100k and $60k is in personnel hire, $38k is in equipment hire, and $2k is in consumables, there is no point arguing for a week over the consumables.  You’d be amazed at how many people don’t understand this, or allow their egos to get the better of them and attempt to argue about everything.

The skill of a manager is in being able to identify the major costs items and ask the right questions – without prejudice.  Perhaps the $130 per day you’re being asked to pay for hire of a compressor is a fair price?  But without a comparator, how do you know?  Well, you can ask – or find out online – what the capital cost of the compressor (or other piece of equipment) is.  From there you can work out how quickly it will have been paid for at the proposed hire rate.  Then  you take a guess at the lifespan of the item and judge whether the payback period is reasonable.  If you’re hiring a compressor which costs $10k to buy and typically lasts 2 years under site conditions with some maintenance, then charging it out at $1k per day is taking the piss somewhat.  Charging it out at $30 per day will have it paid for in about a year, which is more reasonable.  I had a client grill me on this very issue with regard to vehicle hire in Sakhalin once, and I learned from it.  He had bought identical vehicles a short time previously and (quite rightly) objected to me trying to get them paid for in under a year.  I reduced my prices sharpish.

The point is, don’t automatically assume you’re being ripped off when presented with a high price.  If you’re going to challenge it, you must have a basis for doing so.  Moaning that “this is very expensive” without being able to say why is not going to get the price down any.  Personnel costs are a bit harder to judge, and chances are you won’t be in a position to challenge the rate much.  So you challenge the man-hours or man-days instead.  Find somebody to give you a rough idea how long the job should take, if you can’t figure it out for yourself.

If you think what you’re being charged is fair but the price is still too high, then you need to look at the scope of work.  Is there anything which can be removed?  Did some dickhead in HSE bolt on ill-defined “training” at some stage of the scope development which is now a major cost item?  Is your contractor really the best person to be updating Company documentation on this project?  Is that new deluge system really required?  This is the time to get rid of the expensive “nice-to-haves” and concentrate on what is essential.  But if the “nice-to-haves” comprise only a fraction of the overall cost, by all means leave them in.

Finally, you need to remember that you’re only looking to avoid getting ripped off here, not to get the bargain of the century and impress the bosses with your supposed business acumen.  (If you think you’re getting a bargain in the oil and gas business, come and see me when the job gets delivered and we’ll talk then.)  So if somebody is proposing 20 days to do a job and you think it should be 10, get it down to 10 or 12.  But if you think it should be 18 or 19, then leave it at 20.  The small stuff doesn’t matter, and if you’re a manager, you cannot get bogged down in such details.  Get the price approximately right, and don’t worry if the contractor is making a little bit more than the absolute minimum.  Provided he’s not taking the piss and ordering his Sunseeker when walking out of your office, you’ll have done your job.