What a difference a month makes. Last month, oil was over $50, the stock market was over 28,000, and you could buy toilet paper in the stores. The coronavirus was not yet classified as a pandemic, but it was starting to be a hot news topic. Now, not only has it reached pandemic level, but it has shut down most places across the nation as well as in many other nations outside the United States. I discussed black swan events in last month’s President’s Column. Let me tell you, the AAPG and the oil industry just got hit with three black swan events all at once: the coronavirus, the stock market’s major drop and the oil price plunge. While the drop in the stock market and the drop in demand for oil have a direct tie to the coronavirus, the unwinding of OPEC+ has added to the oil price drop.
Understandably, the events of this past month have caused an increased amount of anxiety for many people.
Impact on AAPG
First and foremost, I want to assure you that the Executive Committee’s number one concern is the safety and well-being of our members and staff, along with their families. Members have asked about the Annual Convention and Exhibition scheduled for early June in Houston. As of now, the event is still scheduled as planned, but we’re carefully monitoring the situation. With this and any other large conference, the AAPG has contractual obligations with hotels and other vendors, and Alan Wegener and his staff are in communication with these partners and investigating all options. We will provide additional details as soon as they are available. The Executive Committee is meeting regularly to assess the changing conditions and make necessary decisions. In contrast, the International Conference and Exhibition, which was to be held in Madrid, Spain in September, has been cancelled. The event was off to a great start with solid sponsorships and 829 abstracts submitted for the program, but the unknown duration of the pandemic, the severity of the outbreak in Spain and throughout Europe, and a growing number of postponed events now competing with us in Q3 were key factors. We were also able to exit early with very manageable costs. Repsol, our host for ICE 2020, fully supported our decision to cancel and we’re hoping to bring ICE 2023 to Madrid. Speaking of postponed events – the Offshore Technology Conference in Houston and GEO 2020 in Bahrain, have both been moved to the fall. Check on the AAPG website for more details about ACE and these and other events.
There is no doubt that AAPG will suffer losses this fiscal year. GEO 2020 and OTC alone would have generated income larger than our originally anticipated surplus for this year. The good news is that we will see that money in the next fiscal year, but since the surpluses were booked at $50+ oil prices when we did this year’s budget, we are acutely aware that we most likely will have to adjust these numbers downward. With the drop in oil prices, we have already seen companies slash travel budgets and funding for conferences and short courses registrations.
Words of Advice
I’m keeping it short this month, but want to leave you with these thoughts. These are not words of wisdom, but how I personally handle these types of events.
First, take care of yourself and your family. That is the most important thing. Heed the warnings and follow the rules on social distancing to protect yourself as much as possible from contracting the coronavirus.
Second, worry about the things in which you can make a difference. We cannot change the price of oil, but – especially to our younger members who are going through this for the first time – maintain optimism and set yourself up for success as much as possible. When prices dropped in the mid 1980s, I made the conscious choice to not let a defeatist attitude take over. I immersed myself in my work, keeping my mind on things I enjoyed instead of worrying. There are always parts of a project that you wished you had time to do, but you were so busy staying ahead of rigs. Now you might find that time, and that may lead to unlocking a way to make a certain play more profitable for your company. If you let yourself start to feel defeated, you wonder if it even matters, and you may start showing up late and leaving early, sitting around the office talking, and setting yourself up to fail. Try to find the silver lining in any situation and pause to reset your mindset when needed. I’ve always found music to be a pick-me-up. In fact, I wrote a paper on it in college for a utopian literature class. My favorite song back then was “Hold On Tight to Your Dreams” by ELO. I’ll continue to listen to music from the comfort of my home while I catch up on my projects and practice social distancing.
Everyone be safe!