Energy Company Saves Millions, Reduces Negotiation Time, and Builds Long-Term Relationship with Potential Partner
Situation: Multinational energy company faced months of fruitless attempts spent negotiating with the president of X country around securing a time extension to drill an exploratory well. Despite scientific data that showed that their originally proposed location would not produce oil, the president insisted they drill a well anyway, in keeping with their original contract. Drilling a known empty hole, or simply walking away, would cost the company at least 17 million dollars and tarnish the reputation of the country as a possible future partner in supplying the world with energy. No other company would want to take the risk.
The Catch: Understanding the futility of the current location, the company attempted to approach people they hoped could influence the president – including the Minister of Oil and even the president’s sons. No one could get him to change his mind.
Innovative Actions: Third Angle was called in to conduct a workshop with a cross-functional team, using tools from our Way of Thriving Method™ like our Framing Question and our NEWCO Mapping™. Once we were able to change the Framing Question from “How to get a well extension” to a much broader, deeper question of “How can we develop a long-term, trusting relationship of mutual value”, other ideas and influencers emerged on the NEWCO Map™. One in particular caught our attention - the country of Norway.
Norway already had a long-term, trusted relationship with the president. As it turns out, their energy advisors had more influence on the president than his own in-country advisors and even more than his sons. Norway and our client also had a long-term relationship of mutual respect, and both understood the accuracy and implications of the science, and the need for more time and exploration before drilling.
A small team from our client flew to Norway the week following our workshop. There they shared the data and got immediate consensus that they would talk to the president. Within three weeks, the president changed his mind and granted the extension.
Growth & Value: The client saved 17 million dollars off the top and secured billions in upside potential assuming their further exploration yielded new findings. What had cost the company months in time and frustration was now resolved in three weeks.
Mini-Lessons: The cross functional team learned the value of Re-Framing Questions and mapping the situation more holistically than they had thought before.
The new framing and strategy needed to ensure that all stakeholders and influencers were accounted for. Keeping all parties’ goals and wins in mind is crucial for long-term management of the entire system.