February 2010 Vol. 237 No. 2

Q&A

A Builder + A Problem Solver = Cleve Hogarth

Cleve Hogarth has always prided himself as a problem solver and a builder. Along with integrity, can there be any traits more important to someone in the oil and gas business?

Hogarth, Managing Director of Quorum Business Solutions, Inc. in Houston, has represented the oil and gas industry from the operations side as well as the service-provider side. With each step up the ladder, his reputation as a knowledgeable, trustworthy business manager has preceded him. A fertile mind is always at work behind that friendly smile and firm handshake.

In an interview with P&GJ, the affable Canadian, who is also an adept listener, describes a career that seemingly was meant to be.

P&GJ: Where did you grow up and what were some of your interests?
Hogarth: I was born and raised predominantly in western Canada. My father was a petroleum geologist with Shell so we transferred frequently among Calgary, Edmonton, Toronto and Houston, several times each. One of my life-long interests is building – turning an idea or concept into reality. Initially, it was tree forts and go-carts, then cars and home renovations, eventually business transactions, processes and organizations. I attended University of Calgary and York University majoring in Political Science.

P&GJ: What led you to get into the energy industry and what was your career path that led to your current position?
Hogarth: Given my father’s career and the fact that I lived in energy-centric locations, it was natural for me to gravitate to the energy industry. My initial industry involvement was in oil and gas facility EPC and operations in western Canada.

In the mid ’80s, I became an early entrant into the newly deregulated natural gas marketing business. I spent nine years as a gas marketer, mostly with TransCanada Pipeline’s marketing affiliate, transferring between Toronto, Houston and Calgary. In the mid ’90s, I moved into the service-provider side of the business with a gas-management software system start-up. Since then, I have been with a series of oil and gas management information technology companies, culminating in my current position as Managing Director at Quorum Business Solutions.

Moving across to the other side of the table was not a huge change because I continue to work in the industry and I am able to conduct business with many clients whom I dealt with previously in my gas-marketing capacity.

P&GJ: How have you seen the energy business change since you began, especially the role of the service company in relation to operators?
Hogarth: The energy industry is much more sophisticated in how it manages the business today. Stakeholder interests (customers, counterparties, employees, investors) are balanced and translated into goals and objectives. Decision making is largely supported by information and analysis.

Service providers now play a legitimate, valued role in the business, allowing energy operators to focus on their core competencies and realize improved economic efficiencies.

Hogarth: In information technology, it is rarely the technology itself that is the driver. How current technologies are practically applied to improve business management is more important that the technology itself.

P&GJ: In a technically oriented company such as Quorum, how do you and your staff keep ahead of the learning curve of new technology?
Hogarth: Quorum utilizes a carefully balanced formula of recruiting, training, practical experience, a culture of continuous improvement and analysis of industry best practices to ensure that we continue to provide our clients with the best available solutions.

P&GJ: Are companies more or less interested in technology research and will they support it?
Hogarth: As mentioned previously, operators do not invest in technology for technology’s sake. There must be tangible benefit that contributes economically to the bottom line. So, if presented appropriately, companies are interested in technology advancement and they will support it. The technology itself isn’t the driver – it’s how you apply it.

Automate simple manual tasks. Collect and organize data with integrity so that users can be confident in easily accessing useful information. Spend less time gathering and organizing data – more time focused on decision making. Use technology to conduct analysis to compare operating conditions with expected/planned results so that time and energy is focused on dealing with exceptions, not poring through raw data to determine trends. Experience shows that this approach is successful.

P&GJ: What makes the natural gas industry special and how would you describe conditions in the industry today?
Hogarth: I am very bullish on the natural gas industry. Notwithstanding current softness of the commodity price due to near-term oversupply, prospects for natural gas have never been brighter. Natural gas is the obvious practical answer to the energy challenges we face today – economic, domestically available, abundant, reliable, secure and clean.

Collectively, our industry needs to do a better job of informing the populace and elected officials as to the facts. As the benefits and capabilities are better understood, the industry will thrive in support of our economy.

P&GJ: How has Quorum coped with economic downturn? What business opportunities have you seen open up and where do you see future growth?
Hogarth: The focus of Quorum’s business is working with energy companies to improve operational efficiencies and position them to indentify and take advantage of opportunities. So an economic downturn is the very time when many operators are even more interested in obtaining assistance in these areas. As a result, Quorum’s business does not experience quite the same degree of volatility faced by companies directly affected by energy commodity price.

Quorum expects our significant rate of growth to continue to keep pace with growth in demand for midstream energy infrastructure, development of new sources of supply (shale) and renewables (wind).

P&GJ: What does it take to be a successful manager today?
Hogarth: Aspects of skill, experience, and attitude are required for success. An important item that comes to mind is employing empathy (the ability to understand and appreciate the other person’s perspective and situation). Utilizing this skill shouldn’t result in acquiescence, but instead, should pave the way for a more successful outcome to any interaction

I’ve been fortunate that the role I’ve played through much of my career has had me negotiate with very seasoned and capable counterparties. I’ve learned many valuable lessons and techniques from a long list of clients, many of whom have become friends.

P&GJ: What are some of your interests away from work?
Hogarth: I enjoy spending time with my wife, Tammy, daughter, Bridgette and son, Travis. We all enjoy travel with regular visits to our cottage in Ontario, and to Tucson where my daughter attends the University of Arizona. My son’s participation on his high school golf team provides a great venue for me to spend valuable time with him as I practice being mediocre at golf. I continue to be an avid skier, having learned the sport at the age of 5 in Banff and serving on the volunteer ski patrols weekends for 15 years.

P&GJ: From your travels, are there any specific people or incidents that stand out for you?
Hogarth: Participating in various pipeline Federal Energy Regulatory Commission Order 636 hearings in Washington, DC was fascinating – a process unlike anything else I’ve encountered.

A day of heli-hiking in the Canadian Rockies with a diverse group of gas pipeline clients from across North America.

Delivering a presentation in Germany to an audience of energy industry executives; even attempting a couple of introductory sentences in badly mangled German – what was I thinking!

P&GJ: What would you like people to know about the natural gas industry?
Hogarth: While not the most glamorous business at first glance, the natural gas industry offers rewarding careers with almost limitless opportunity. The product (energy) is a vital input for the economy. It is “made in America”, generating local jobs and dollars. It is comprised of independent organizations exhibiting true entrepreneurial spirit, as well as some of the largest corporations in the world. The natural gas industry exhibits few of the problems plaguing many other sectors today and is quietly managed in an efficient manner – effectively in stealth mode, under the radar.