Transcript SPE Ethics Sub

Society of Petroleum
Engineers
Engineering Professionalism
Committee
Ethics Sub-Committee
2006
Why Ethics and Engineering
The engineer as a professional is
dedicated to improving competence,
service, fairness, and the exercise of wellfounded judgment in the ethical practice of
engineering for all who use engineering
services with fundamental concern for
protecting the environment and
safeguarding the health, safety and wellbeing of the public in the pursuit of this
practice.
This presentation brought to you by:
Ethics Sub-Committee Members
Steve Hamburg
Greg Rowe
Dean Warnken
Wayne Wisniewski
How to Use the Material:
For Self-Study
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Read the first 11 slides of this presentation
Display the first relevant “Realistic Situation” question
Think about:
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What your action(s) would have been before reading the first 11
slides
What your action(s) would be after reading the first 11 slides
How you would explain your action(s)
Review the answer slide in yellow font
Continue through all 20 question and answer slides
Document date and location of review for future
reference
Why should I study ethics?
 Adaptation
for current business
environment on corporate governance.
Increased governmental legislation on
industry.
 Fulfillment of chartering, registration, or
certification requirements on Ethics
training. Provide vehicle for required
training for SPE members.
 Better
alignment with other professions
(Attorneys, Accountants, Physicians)
where public interest is involved. Other
engineering organizations have ethics
education for membership
 Provide resource for SPE membership on
ethics training and guidelines.
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Provide suggested methods, materials and
communications dealing with ethics:
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Section Speakers
University Training
Web-based Training
Distinguished Lecturer
Audio-Visual Material for Training/Discussion
Newsletter Articles for SPE Sections
Article(s) for JPT Case Studies
Outsider Education
Ethics Decision Framework
 Ethics
can be complex, without a clear
answer. The Decision Framework
developed by the Ethics Sub-Committee is
proposed to enable the petroleum
professional to make sound decisions on
complex ethical issues.
Decision Framework
 Ask
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yourself:
Would the resulting action be legal?
Would stakeholders see the action as responsible
stewardship?
Would I feel good about the resulting action?
Would I mind having information regarding the
decision publicized?
Have I consulted with peers/others regarding the
perceived action and possible ramifications?
Would the public view the perceived act as a
responsible professional action?
Question and Answer
Session
Some Realistic Situations
Question 1
I
was told that I could hire a consultant to
take care of getting all the permits we
need from a foreign government. He
requested a $40,000 retainer and said that
he would use the money to ‘help move the
process along.’ Since we don’t really
know where the money is going, do we
have to worry about it?
Some Realistic Situations
Answer 1
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Yes. You should know enough to find out if
your consultant is getting an unfair advantage
on the competition. Is it customary for
conducting business in this foreign
government or a one-time deal to get special
favors? One must balance ethical
considerations with the realities of doing
business in many foreign marketplaces.
Acceptable behavior in one part of the world
may be very different from your normal
operating practices at home.
Some Realistic Situations
Question 2
I
have just received an invitation to attend
a hearing of a governmental/local authority
committee as an expert industry witness.
How should I respond?
Some Realistic Situations
Answer 2
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You should use your best judgment as per the
expertise required to testify. By definition, an
expert is one that has achieved a high degree of
skill or knowledge as a result of their experience
and training. Will the testimony be in your area
of expertise? Do you have sufficient education
and a long track record of industry experience in
this area? Does your company and/or peers
recognize you as an expert?
Some Realistic Situations
Question 3
 It
is the last week in the quarterly reporting
period. My boss wants to make sure we
meet our numbers for the quarter, so he
asked me to record an unconfirmed sale
now that won’t be finalized until next week.
I guess this won’t hurt anyone – should I
do what he says?
Some Realistic Situations
Answer 3
 You
must make a judgment call. Is this a
common practice or a first-time request?
Does it put your department at an unfair
advantage in the metrics? Would you
mind if other departments or senior
management found out? It is suggested to
consult peers on the proper way forward.
Some Realistic Situations
Question 4
 My
team’s year-end results are ahead of
budget. A piece of new non-material
equipment is due to be purchased and
delivered in early January of the new year.
My plant manager has asked that the
invoice for the equipment be accrued out
of this year’s budget. Is this OK?
Some Realistic Situations
Answer 4
 Is
this a common practice or a first-time
request? Are you breaking any tax laws?
Is this an illegal ploy or good, solid
financial engineering? It is suggested to
consult peers and perhaps tax/finance
professionals on the proper way forward.
Some Realistic Situations
Question 5
 Every
week we are required to test
chemical discharges that are produced
when we make a particular product. The
tests always come out the same, so
sometimes when work is very busy we
skip the tests and do them a day or two
later if we can. Then, when we do the
missing tests, we just back date the
results. Since this helps manage our
work-flow, is this really wrong?
Some Realistic Situations
Answer 5
 Definitely
wrong. Would you want to live
next to a plant that followed this behavior?
Probably not. Back-dating quality-control
measurements is unacceptable in any
situation and few things “always” stay the
same. Measurements are recorded to
ensure safe, legal operation of your
business. No answer at all is better than a
back-dated entry. Don’t do this.
Some Realistic Situations
Question 6
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The company just seconded me to be the
controller of a new production JV company. I
see competitors in the same marketplace
transferring crude at less than market price to a
subsidiary of one of the joint ventures for resale
at market price to a third party. That can have
the effect of reducing taxes for the joint venture
and increasing profits for one joint venture.
Should I suggest that the JV consider a similar
deal with one of my company’s subsidiaries?
Some Realistic Situations
Answer 6
 You
have a responsibility to do what is
best for your company. Is this a legal
loophole and/or acceptable practice in the
jurisdiction? Will it facilitate an unfair
advantage for your company or just get
them on equal footing with the
competition?
Some Realistic Situations
Question 7
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A former Company A employee who worked on
my team recently contacted me to request that I
provide copies of some materials we worked on
during his employment. In the course of this
conversation, I learned that this former
employee has copies of several binders and
CDs with Company A materials and data we
used in a project. I told this employee that I
would get back to him/her. What should I do
now?
Some Realistic Situations
Answer 7
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If you told someone you will contact them, then
you should follow your commitment. As far as
the materials are concerned, you should ask if
they are proprietary materials that belong to
company A or intellectual property resulting from
your work together. You should also be familiar
with company A’s policy on intellectual property
as to what is & is not transferable and pass
along this information as appropriate to the
former employee. If you are still in doubt,
disclose your activities to your superior(s) and
seek the counsel of peers & other co-workers.
Some Realistic Situations
Question 8
I
have a large grass-mower at home which
I’m lending to a friend. Is it OK if I borrow
a Company A truck at the weekend to take
it to my friend’s house and then use it
again in two weeks to bring it back?
Some Realistic Situations
Answer 8
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Since this is a work truck, you should follow
company A’s policies on the personal use of
company vehicles. There are many liability
issues to consider. You certainly should not be
using the truck to generate additional income
outside of work. However, if it is a simple, onetime non-commercial request then you should
fully disclose you request and ask for permission
from the proper authority at company A.
Some Realistic Situations
Question 9
I
have just joined Company A as a new
employee. My prior employer is one of
Company A’s largest competitors. Can I
share some important confidential
marketing information that I developed
while working for this competitor?
Some Realistic Situations
Answer 9
 You
must follow your conscience as what
is acceptable knowledge transfer. Your
intellectual property is yours to keep and
may be transferred. However, proprietary
information that you know is confidential
should not be shared with out permission.
You also have potential legal implications if
confidential information is shared,
especially if you signed a confidentiality
clause with your former employer.
Some Realistic Situations
Question 10
I
have an idea to reduce subscription costs
for trade publications. The office would
get just one subscription to each journal or
newsletter, which would then be circulated
to everyone with instructions to copy any
articles they want. Is this a good costcutting measure?
Some Realistic Situations
Answer 10
 Check
each publication for their particular
policy.
 SPE’s policy is up to 5 copies of any
article for personal use.
Some Realistic Situations
Question 11
 We
have someone on our team who is
hearing impaired. He is a great worker
and can speak but sounds very differently
than everyone else. Some people make
fun of him behind his back. I find it
embarrassing and bad for teamwork.
What should I do?
Some Realistic Situations
Answer 11
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It is difficult, if not impossible, to control the behavior of
co-workers at all times. Also, offensive behavior is
relative and takes on many different meanings,
especially in a multi-cultural work environment.
However, if you find this mockery in bad taste and
counter-productive to work, you should talk to the
offending individual in private and tell them your feelings.
If the problem persists, you should comply with your
company’s code of conduct and report the offending
behavior to a supervisor. Also, at some point, you
should inform the hearing impaired individual and seek
his assistance in ceasing the offensive behavior.
Some Realistic Situations
Question 12
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I was working late last night at the office. When
I went to use the photocopier I found a small
stack of personnel records in the sorter. I
noticed that the copies contained payroll
information for our department. There was a lot
of personal information on these forms. I didn’t
want to get anybody in trouble, but I also didn’t
think it was right that this kind of information was
left for all to see. What should I do?
Some Realistic Situations
Answer 12
 Unfortunately
this is a fairly common
occurrence and there is great potential for
identity theft and inappropriate
communication of personal information.
Put the personnel records in a safe place
and immediately notify the responsible
authority for this material. Disclose at the
start of the next day of business and don’t
read anymore of the confidential
information while you are working late.
Some Realistic Situations
Question 13
 You
are offered tickets from a vendor to a
local sporting event. Should you accept?
Some Realistic Examples
Answer 13
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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
be relevant to most situations:
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
also customary to avoid any “extra contact” with vendors during a
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
event like the Super Bowl, World Cup, etc.?
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 impact
your judgment for a purchase.
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
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 your
fair judgment, then you have an ethical dilemma and probably should not
accept the tickets.
Sample Ethics Questions:
Question 14
 A personal
friend is a candidate for a job
with your company and you will potentially
be involved with the hiring decision. What
should you do?
Some Realistic Situations
Answer 14
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You should not let your friendship affect a hiring
decision with your company if it gives them an unfair
advantage. However, if your friend is also a
potential valuable resource to your company, it is
equally unfair to “penalize” your friend in a hiring
competition.
It is always best to disclose your friendship to
everyone in the hiring process and to volunteer to
be excluded from sensitive hiring conversations. It
is acceptable to share your friend’s qualifications
and offer other outside references to assist in a fair
hiring decision.
Consider recruitment incentive.
Some Realistic Situations
Question 15
 You
work for an operating company and an
old friend from college is now a senior
manager with a service company. You are
working in a very busy area and there is
robust competition for your well services,
including many competitive bids. What
should you do?
Some Realistic Situations
Answer 15
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It is not ethical to give your friend an unfair
advantage over his competitors.
It is best to disclose your friendship to your
supervisors. You should also have an agreement
with your friend to not discuss sensitive issues and
avoid private meetings during contract tenders.
“Common sense” goes a long way on this judgment.
Also, if it is a good friend, you should have better
things to discuss in private than work.
Follow your company’s guidelines for bidding
procedures. Consider recusing yourself from the
process.
Some Realistic Situations
Question 16
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You work for an operating company that is operating
a joint venture with a national oil company. Your
company has expats to work with local staff to
perform the daily operations and field development.
The national oil company is the only operator in the
country and there are no government safety or
conservation regulations. Operating standards are
well below your company’s published internal
standards for safety and environmental issues.
What do you do?
Some Realistic Situations
Answer 16
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This is a difficult issue where one must balance business
issues versus acceptable tolerance of relaxed safety and
environmental standards. No laws are being broken and
the national oil company obviously holds itself to a
different standard from the international company.
In this situation it is most often best to have a realistic
view of your company’s influence on the operator.
Do your best to achieve conformance with your preferred
standard.
You should ensure that there is full disclosure to your
senior management of the operating issues. It is also
good to have informal discussions with fellow expats on
what will not be tolerated under any circumstances.
Some Realistic Situations
Question 17
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You provide engineering services to clients in
the fields of reservoir engineering and reserves
analysis and reporting and are paid for your time
and reasonable expenses. Your client wants to
be provided a signed report showing that their
fields contain a certain level of reserves. You
receive data necessary to make an evaluation
along with the client’s own reserves estimate
which is really the target they wish to see.
Should you take on this consulting project?
Some Realistic Situations
Answer 17
 Discuss
with the client that your estimates
may or may not match their expectations.
 Explain your role or job as an independent
evaluator. That role is not to provide the
“expected” answer.
 Maintain your role as an objective third
party.
 Your answer must be auditable.
Some Realistic Situations
Answer 17 (con’t)
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You consider your preliminary reserves report to
be objective. It provides an estimate less than
the client desires. The client tries to “arm twist”
you and implies that the invoice for your services
might not be paid.
 Discuss, on a technical level, the data set, field
operations, and assumptions with the client.
 If you cannot agree with the client, agree that
you have reached an impasse, but payment
should be made for the services provided to that
point.
Some Realistic Situations
Question 18
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You consult as a petroleum engineer in the U.S.
One recently completed client project concerns
the evaluation of an oil field. Client “A” owned a
large working interest. You spent considerable
time analyzing the logs, well files, reservoir
maps, volumetrics, drilling potential, etc. Later,
client “B” calls you for an evaluation of its assets,
including the oil field evaluated for client “A.”
Client “B” lacks engineering and geological data
other than public data sources.
Some Realistic Situations
Answer 18
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First, is it a conflict of interest and is it ethical to
take on the assignment for client “B” since you
earlier worked on the same field with client “A”?
Secondly, can you use the data you obtained
from client “A” in making an evaluation for client
“B”?
 Ask client “A” if it is OK to use the information.
 If not, use public data sets and prior learning
points.
Some Realistic Situations
Question 19
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Your parent-based position is staff reservoir engineer at
Company X. In the past year you have come into the
offshore West Africa asset group. Your office handles most
subsurface work, but the overseas office handles “hardware”
issues including facilities/platform engineering, design, and
project planning. In your work you determine technical
recoverable oil reserves of 150 million barrels. This fact is
exciting to your management and they want the oil booked
this year. While it seems reasonable for you to make the
reserves booking, you know that the overseas office does
the project planning and economics, and you have not
examined project economics, nor ascertained whether
company financial commitments to develop have yet been
made. Your manager says all is okay in that regard and go
ahead and do it.
Some Realistic Situations
Question 19 (con’t)
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Can you book these reserves? Who or what
level of your company has the responsibility for
validating reserves and the economics of
reserves? Can the ethics “ball” be bounced
from player to player in a corporation?
 Follow appropriate corporate, governmental, and
professional guidelines.
 Assure yourself and provide documentation of a
viable development plan.
Some Realistic Situations
Answer 19
 Follow
appropriate corporate,
governmental, and professional
guidelines.
 Assure yourself and provide
documentation of a viable development
plan.
Some Realistic Situations
Question 20
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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
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
fields. Your compensation package is salary plus bonus.
Bonus is tied to “results:” exceeding production targets,
reserves growth, and HS&E. The year has been good so far,
but at the December meeting with your staff, covering
reserves and production targets, you realize that there are
problems. For one thing, the maps on which some major
reserves have been booked are wildly optimistic. In fact, they
show gas below lowest known gas. Also, production goals
are based upon these interpretations. You would hate to
have a lost time accident when your boss hurts you for
blowing the reserves target and cutting the production goal
for next year.
Some Realistic Situations
Question 20 (con’t)
 Should
you mention the mapping problem
to your management? Should you request
new reserves maps? To what degree
should your short time on the job be a
factor? How much do you need to know
before something becomes an ethical
issue? When is it ethical to plead
ignorance?
Some Realistic Situations
Answer 20
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Rely on technical analyses of the problem and
when convinced there is a discrepancy, report
appropriately.
 Follow appropriate corporate, governmental, and
professional guidelines.
 Assure yourself and provide documentation of a
viable development plan.
 When reporting, consider a good pair of running
shoes and a clear path to the exit.
Thank you for participating in this
presentation on ethics.
For additional information on
professionalism and best practices,
contact SPE Professional development at
[email protected]