Fall 2008 Jackson  School Commencement Speaker:   Annell R. Bay,  Sr. Vice President, Exploration  Marathon Oil Co.

Fall 2008 Jackson School Commencement Speaker: Annell R. Bay, Sr. Vice President, Exploration Marathon Oil Co.

Dean Groat, distinguished faculty and researchers, honored candidates for graduation, ladies and gentleman.

Let me begin by congratulating three groups of people in today’s audience. First, to the parents, let me say how much credit you deserve on this occasion. As the mother of a daughter who is planning to graduate next May, I know well the many responsibilities you have shouldered – emotional, financial, family, and otherwise – to make this day possible.

Next, I commend the faculty and administrators, for the great atmosphere of learning you have created here at the Jackson School of Geology, and for the knowledge, support, and skills you have imparted to the students.

Last and certainly not least, I extend my heartfelt congratulations to this year’s distinguished graduates. You have done the work, passed the tests, made the grades, and mastered the subjects to bring you to this moment. I know I speak for everyone gathered here in your honor in saying how happy we all are to celebrate this milestone with you.

So this is it! This is your senior year, your graduating year. And what a turbulent, challenging and now historical 2008 year it is. It’s easy for me to say that the world is different today from when I graduated in 1980 but the world is different this year than just from last year in 2007!

The recent presidential campaign was centered on a message of change and hope. Next month, a historic new administration will take office in Washington. Policy makers are ready with proposals trying to deal with the economic and security uncertainties — there is much change in the air.

And Great change also brings great opportunity.

Great change clears the way for new players, new organizations, and fresh ideas that could offer better solutions, leading us toward greater rewards.

And that’s where you come in.

You represent the fresh infusion of human capital that our country and the world await with great expectations. You are the problem-solvers for the future. Your generation is already known as more collaborative; more resourceful and more innovative thinkers.

You have also shown that you have the desire and ability to keep up with the ever-increasing pace of changes in new technologies. My generation needs you in the workforce. We need your enthusiasm and your new ideas to solve difficult and more complex problems.

I am honored today to have the opportunity to address this distinguished group, and I think of each of you as tomorrow’s leaders in energy – both fossil fuel and alternatives.

I am well aware that not all of you have chosen careers in the energy industry YET. But energy issues are connected to every aspect of our lives today. Continued access to clean, reliable, affordable energy may be the critical issue facing our country today and could be in the foreseeable future.

What about alternative fuels? We will find new fuels, actually you all will help find new economical alternatives but to integrate them into our homes, our transportation system and our daily lives is going to take some time. It is estimated that for at least the next 20-25 years, we will still need fossil fuels to run our cars, to power the global economy, to meet the global energy demand.

At the same time we all must address the competing and complex environmental challenges, such as global climate change and the increased carbon footprint.

Because of your choice in studying geology and the knowledge and training here at the Jackson School, you are better prepared to inform, to educate and to influence the people and the policies in the United States and possibly, the world about energy.

In a career in energy, you truly have the ability to change the world, to change the lives of people in this country and the lives of people around the globe. That is what access and delivery of energy can do. Each of you can make a difference.

Now how is that going to happen? What is it like to have a career in oil and gas industry?

The energy industry is an enormous business, maybe the most dollar-intensive and technology-driven on our planet. More so than the space program.

Over the last 29 years, I have been fortunate to experience an exciting, challenging, fun and satisfying career in the oil industry. And after 29 years, I still am.

I am a geologist by schooling and spent most of my career in oil and gas exploration. It’s the front end, what is called the puzzle-solving part of the business. It involves more ambiguity than many other aspects of the energy business, pulling together disparate pieces of information to build an idea and create a fact-based story, and then, to test that idea by drilling a well.

I have made great friends and in several companies worked with creative colleagues to be able to drill wells and find oil and gas. It has been no different for other explorers in other fields, having some idea that many people might think is crazy, convince management or investors to support it and then, the exhilaration of making a new discovery.

The companies you join will teach you how to find oil and gas. Just as in graduate school, you will have the chance to attend training seminars in some specific area or skill.

But most of your training is on-the-job and the geoscientists who will teach you the most about finding oil and gas are the previous generation. Many of the folks from my generation are inventive, resourceful and have a wonderful sense of humor. Some of the humor is making fun about how we work, the processes we follow or even management.

And I’ve been on both sides of those jokes!

One influential leader told me he took his job very seriously, and he did. But he also said every job should be fun and that there was a lot of room for respectful folly among colleagues, and there was.

Do you all still have Final Bedlam in the department here every year where you make fun of the faculty and school-year events?

You all may not have read or remember the early Dilbert cartoons by Scott Adams, who worked in the telecommunications industry. We thought Dilbert worked in the oil business because the stories about management at odds with the cubicled army of engineers and office staff seemed so familiar and thus, humorous.

And that is the key, familiarity. So to be able to get the jokes, or to be able to make fun of the processes gone awry, we all have something in common or find common ground.

Our commonality is this love of geology, geophysics and the energy business: the intellectual satisfaction of solving a riddle, puzzle or problem, possibly on a daily basis; or the new ideas within the project itself and the interaction with people from work and from different cultures that turns a job into an exciting adventure.

We want to bring you, the new graduates into this fold.

This adventure of a lifetime.

A career in oil and gas can take you to many places with different customs and experiences. On one trip I made to Kazakhstan, we were a team of five. I was the geologist; there was one geophysicist and three engineers. We were looking for oil and gas leases and concessions during the day, working with interpreters and geologists from Russia and Kazakhstan.

One evening we were asked at an informal dinner to sing. Our hosts had just sung several songs in Kazakh and they wanted us to reciprocate.

We were colleagues who worked together on technical projects Monday thru Friday. We weren’t a singing group. One colleague said “I’m an engineer, I didn’t sign on to sing”. We took what seemed like a long time trying to decide on what to sing and we finally landed on “Take Me Out to the Ballgame”. Once we got started we really got into it and sang louder, especially on the counting out. “One, two, three strikes you’re out”. Our hosts didn’t understand any of the words but they were laughing with us….or at us. So we sang it again.

So how do you find the right company to work for? What do you look for in starting to design a career? You begin with your values, knowing what is important to you.

Good common wisdom says that shared values with your colleagues are the foundation for happiness and joy in work and life. It is certainly something you look for in friends and relationships, and it is also true of companies you work for.

Companies are made up of people who either walk and talk those values or not. Integrity and honesty, passion, courage, openness and respect are some of the values of enduring, great oil and gas companies.

At one point early in my career, I was in a roomful of people, mostly geoscientists, and we were reviewing wells with my manager and his boss, the vice president. The question was asked about who had made a specific decision on a well, and as I recall it had been a poor decision. I said that I had made the decision.

Later, when I was alone in my office the manager came by and told me “Don’t ever claim responsibility publicly for a bad decision”. Now he said this in a manner of advising me, as if letting me in on the secret to his success as a manager.

That manager was clearly telling me about himself, how he would have acted. In this case he would have hid or disavowed fault. The successful leaders that I have worked for over the years did not fear or punish the truth.

Leadership begins with values, your values and it provides the anchor, the foundation, the morale compass to do the right thing. When confronted with ethical conflict, and you will be confronted, there are people in all companies from whom you can seek advice, be it an ethical hotline, managers, supervisors or the legal or financial departments. Don’t ever compromise your integrity. A good rule of thumb is how your decision would look on the front page of the newspaper. If it passes that test you should be ok.

So first is values, second is what do you really love to do? What was your favorite assignment or your favorite class? While that may sound like a cliché, it isn’t. What is it about geology or work that you like the most? What is it that turns up your energy levels and enthusiasm?

As a geologist, I liked mapping, both the regional mapping to understand depositional patterns of sands and detailed mapping on a prospect level needed to drill a well.

I worked Pennsylvanian Morrow sands in the deep Anadarko of Oklahoma and the Northwest Shelf of New Mexico. And the thrill for me was finding a specific correlation marker on logs in the lower Morrow and thus being able to predict which sands were connected. I mapped Morrow sands across one county and we ultimately drilled several successful wells.

Why I’ve told you this story in all this detail is that my personal “discovery” of this datum probably occurred over only one or two days of work. But the excitement from the discovery, and the subsequent follow up mapping which led to drilling successful wells carried me on high energy in the Morrow play for months. In fact, that happened in 1988 and look at me now, I am still talking about it.

I have one more story I must share with you of my recent experience in my role as a vice president of exploration in leading successful bidding in a lease sale in the Gulf of Mexico. The whole project occurred over a two year time frame and required yet another skill set. I started the lease effort by replacing the leadership of the teams.

We secured multi-year funding for a massive seismic reprocessing effort; I removed distractions to keep the teams on target to meet the internal and external deadlines.

I was also making changes in the previous habits and culture of the staff. And, half of the staff and their families were relocated nearly overnight to Houston following hurricane Katrina’s destruction of New Orleans. It required consistent and patient communication on my part. I had to convince them this could be done. And, this was just the Gulf team – I had responsibilities for many other geographic areas, some with similar issues.

The most difficult challenge was selling the opportunities internally to my colleagues and the executive leadership.

I’m proud to say we were very successful. The discoveries of new ideas, new maps, new plays that the team generated, the team and technical staff did all the work, and allowed us to convince executive management of the new opportunities and to secure the largest amount of money from the Board of Directors that was ever exposed in any United States Gulf of Mexico lease sale.

I can best sum up the exhilaration of the whole project by a plaque I received from one of the team members. The plaque had these words. “Life is not measured by the number of breaths we take, but by the moments that take our breath away”.

Our shared experience together on that multi-year project not only brought new business opportunities for the company, from leases we won in the bid round that day, but equally important built a community spirit, a commonality amongst a team. We made history together and those teams are still on high energy today.

Lease Sale 205 in October 2007 as the culmination of nearly 3 years of work, took our breath away.

How can you personally change the world? The energy challenges we face today are the direct result of other countries wanting similar access to clean, affordable, reliable energy just as the United States has. The developing countries want this improved standard of living and so, we will have to share the world stage a bit more today and in the future.

We will have to learn both to compete and to cooperate with a greater number of other countries and trade groups. Energy resources in a given country can tip the power balance and possibly create stress in surrounding regions and global markets.

Do you all recall the Russians’ planting a flag on the North Pole last year, not on top of polar ice but on the sea bottom? The race for the Arctic sure isn’t for the ice.

You may have heard the phrase “the easy oil is gone”. In reality it has never been an easy business to find new oil and gas, but now the risks are higher than before because we are targeting more difficult and challenging reservoirs, terrains and cultures.

Finding an oil and gas field has a huge impact on the world – that is one way you can change the world. People around the world want to improve their standard of living and that takes abundant supplies of energy in many forms.

You will touch people through your effort and success. People who you will never meet but who will enjoy a better life because of the energy supplies that you helped to create.

We in the oil industry need your ability to find, develop, manage and produce hydrocarbons along with your diplomacy skills to work in different countries with different cultures. This cooperation between countries and people to find energy solutions will be led by your generation.

This giant task to provide the world with energy is yours to continue, yours to manage and yours to enjoy its rewards.

But know this, the problems you solve, and the contributions you make are in your interest, are in the country’s interest, and are in the interest of humankind.

In closing, the slogan of the University of Texas at Austin “What Starts Here Changes the World” applies to each of the graduates of the Jackson School today. I would like to be the first to welcome each of you to the energy business.

Come join us and we’ll take your breath away.

Annell R. Bay