Ethical Conduct Expected, Essential

A Sage Mentor Helped Me Put it in Perspective

Back when I was generating and presenting drilling deals as an independent prospector, I frequently found myself feeling resentful because of my perception that with every prospect presentation, I was giving away a certain amount of precious geological knowledge and exploration strategy.

A sage mentor helped me put it in perspective:

"It goes with the territory, Pete. You just try to limit how much you reveal, and accept the fact that you have to educate prospective buyers in order to sell the venture.

"You try to protect yourself as much as you can, with written confidentiality and non-complete agreements, selective leasing and acreage-options. But there is a gray area in which unethical people can take advantage. That's why you should be cautious and discriminating about who you show your deal to, unless it's totally under your control."

Most worthwhile joint ventures do not spring forth whole. Before most of them are signed, sealed and delivered — as a bundle of legally binding contracts covering as many future contingencies as can be imagined — they generally develop through a progressive series of conversations, meetings, memos of understanding, defined areas of mutual interest (AOMI) and letters of intent.

Among one or all parties involved, therefore, there is usually some risk in revealing sensitive concepts, geotechnical data, tactical intelligence, financial details, organizational liabilities, and business strategies, knowing that provisional co-venturers may turn out to be competitors (should the deal fall through) or that word of your ideas may leak out.

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Domains of Human Activity

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Back when I was generating and presenting drilling deals as an independent prospector, I frequently found myself feeling resentful because of my perception that with every prospect presentation, I was giving away a certain amount of precious geological knowledge and exploration strategy.

A sage mentor helped me put it in perspective:

"It goes with the territory, Pete. You just try to limit how much you reveal, and accept the fact that you have to educate prospective buyers in order to sell the venture.

"You try to protect yourself as much as you can, with written confidentiality and non-complete agreements, selective leasing and acreage-options. But there is a gray area in which unethical people can take advantage. That's why you should be cautious and discriminating about who you show your deal to, unless it's totally under your control."

Most worthwhile joint ventures do not spring forth whole. Before most of them are signed, sealed and delivered — as a bundle of legally binding contracts covering as many future contingencies as can be imagined — they generally develop through a progressive series of conversations, meetings, memos of understanding, defined areas of mutual interest (AOMI) and letters of intent.

Among one or all parties involved, therefore, there is usually some risk in revealing sensitive concepts, geotechnical data, tactical intelligence, financial details, organizational liabilities, and business strategies, knowing that provisional co-venturers may turn out to be competitors (should the deal fall through) or that word of your ideas may leak out.

As my own professional interests have expanded, I have learned that this principle applies to most business deals, not just to oil and gas exploration.

That's one reason why professional ethics is so important to successful careers, but especially in the petroleum E&P business. Because most formal legal agreements evolve (rather than emerging fully formed) they require a certain amount of trust among the parties during their gestation period.

The expectation of ethical behavior in others is the foundation of healthy free-market commerce.

Turns out that it's also essential to a vibrant scientific community and open, progressive participative government!


As described by Rushworth Kidder (1996), the English jurist John Fletcher Moulton recognized (1924) three great "Domains of Human Activity:"

  • Positive Law.
  • Ethics.
  • Free Choice.

Law can be seen as:

  • Codified Ethics — the evolved product of Custom and Values.
  • Ethics as the implementation of moral values, requiring integrity and practice.
  • Free Choice as the consequence of liberty, allowing creativity, self-realization and, in extremity, license.

    Lord Moulton described our actions in the realm of law as "obedience to the enforceable," and in the realm of ethics (which he termed "manners") as "obedience to the unenforceable." Figure 1 depicts this triad as a continuum, implying that the lateral boundaries are dynamic:

    • If ethical behavior deteriorates, society designs new laws and regulations to fill the void.
    • If liberty degrades into license, free choice begins to impinge on ethics.

    That's one reason why we worry when folks show much more concern for their individual freedom than for exercising it responsibly — an ongoing problem with many folks in the entertainment business and the print and TV media (as well as with derelict corporate managements).

As Kidder notes, Lord Moulton recognized that the real greatness of a nation (or society) "is measured by the extent of this [domain] of obedience to the unenforceable … the extent to which individuals composing the nation can be trusted to obey self-imposed law."


So, if ethical behavior is important to citizenship, then where do young people acquire sound ethical principles? Home, school and church are the standard answers (although academe increasingly cops out under the doctrine of ethical relativism and situational ethics).

More particularly, how and where do young graduates learn how to translate general ethics to more specific business ethics?

How do they marry technical competence with ethical standards, so as to become young professionals?

How do they acquire sound familiarity with tried and true E&P business usages?

In the past, that was the arena of mentors, a traditional societal convention (and an honorable function) that, in our modern organizational wisdom, we have largely allowed to atrophy. In most E&P companies, the older folks who would have been mentors have now been down-sized out, or retired.

But in any case, prospectors should always remember: The expectation of ethical behavior in others is the foundation of healthy free-market commerce. And it's a two-way street!


What should AAPG be doing to elevate awareness of professional ethics among younger (as well as older) geoscientists? Here are some ideas, in various stages of advancement, that have been engendered by AAPG leaders such as Dan Smith, Robbie Gries and others.

  1. Insist that each AAPG member who serves as a Visiting Petroleum Geologist devote five or 10 minutes of his/her talk to ethics and professionalism. There is already affirmative movement here.
  2. Similarly, maybe we should "beef up" AAPG's Mentorship Program with respect to ethical content.
  3. The first AAPG Distinguished Ethics Lecturer, John Gibson, president and CEO of Halliburton Energy Services Group, will deliver 15-20 lectures to select AAPG audiences during 2003 and 2004.
  4. Publish a regular series of articles in the EXPLORER, relating actual case histories of ethical conflicts in the E&P business, paying particular attention to the consequences to the parties involved.
  5. The Division of Professional Affairs is sponsoring the design of a lively and engaging new short course on ethics and professionalism in geoscience and the E&P business.
  6. AAPG is encouraging universities with petroleum geology programs to consider including regular or annual lectures on professional ethics in their required curriculum.

Recommended Reading: How Good People Make Tough Choices: Resolving the Dilemmas of Ethical Living, by Rushworth M. Kidder, Fireside (Simon & Schuster) New York, 1996.

I'm indebted to John Gibson for referring me to this outstanding, highly readable little book, one of the very best references I've ever read about practical ethics in professional practice as well as everyday life. I used Kidder's book extensively in preparing this column, and I commend it to all AAPG members as a "must" read!

Read it, you'll like it!

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