(Bloomberg) -- Exxon Mobil Corp (NYSE:XOM).’s Sara Ortwein has delivered some of the energy industry’s biggest engineering feats over a 38-year career. Her newest challenge: Winning in the nimble, fast-moving world of shale.
Ortwein’s task is as much cultural as technical. Exxon had given the XTO shale unit she runs a long leash to free it from the parent company’s famously exhaustive planning process. Now she’s moving XTO’s headquarters to Exxon’s Houston hub to better blend the unit’s shale know-how with the oil giant’s technical and management expertise.
Exxon was slow to the shale revolution that wildcatters began in 2005. By buying XTO in 2010, it served notice it had arrived. And Ortwein, who started at Exxon drilling wells in East Texas, was named to lead the unit in 2016. She’s one of just three women among the company’s top tier of 25 executives, in an industry long dominated by men.
“It’s a different culture for a different part of the business than a big mega-project,” Ortwein said in an interview. “Bringing it on campus means we can still retain all the experience and expertise of XTO” in shale while getting “the face-to-face benefit” of Exxon’s experts across disciplines.
Ortwein is seen within the company as the perfect leader for such an effort, with a career marked by a string of breakthroughs. Off Russia’s Pacific Coast, she was part of a subsea project that broke multiple drilling records, boasting an 8 miles-long sideways well. She also worked on liquefied natural gas operations in Qatar that were unprecedented in their day, enabling the kingdom to tap one of the world’s largest gas bonanzas.
Now, the pressure is on for Ortwein to deliver once again.
Exxon is struggling with global production declines that are weighing on its stock price. Her portfolio, which includes fast-to-develop wells in the Permian Basin, provides the best opportunity to quickly arrest the output gap, making it the cornerstone of Chief Executive Officer Darren Woods’s 8-year, $230 billion plan to resuscitate Exxon.
She’s orchestrating a big expansion of the company’s rig fleet in the region from 24 in March to 30 by the end of the year. If successful, that’ll make Exxon the region’s top driller.
‘Another Dimension’
“We have the ability if the market changes, upwards or downwards, either to pick up rigs rapidly or lay down rigs if we need to,” Ortwein said. “It adds another dimension to our portfolio.”
The oil and gas industry is still mostly a man’s world but was even more so in the 1980s when Ortwein began her career. That didn’t put her off when she graduated from the University of Texas as a civil engineer.
“I interviewed with a lot of different industries, but I found the oil and gas industry very dynamic,” she said. “I really was drawn to the people, the passion for the business and the pace of the business.”
For greater gender diversity in the industry, society as whole needs to encourage more women and minorities to study science and math “to ensure we are accessing the entire talent pool,” she said.
Notable Successes
There have been some notable recent successes. Occidental Petroleum Corp (NYSE:OXY). elevated Vicki Hollub to CEO in April 2016, while Chevron Corp. (NYSE:CVX) and Royal Dutch Shell (LON:RDSa) Plc both have women CFOs. BP (LON:BP) Plc and Shell recently appointed women to lead their U.S. businesses.
Efforts to boost female participation in the industry rely heavily on high-profile executives like Ortwein because they exemplify how women can rise to the top in male-dominated industries, said Katie Mehnert, founder of Houston-based Pink Petro, which promotes gender diversity.
“The first step is to get women in these positions but then we need to socialize it, make it normal,” Mehnert said. “Telling their stories creates a culture of transformation.”
Ortwein was promoted to oversee XTO when oil markets were just starting to recover from the worst crash in a generation. At the time, American crude was trading for about $46 a barrel and Exxon’s U.S. oil and gas wells were in the midst of a two-year run of negative returns.
Now, oil is close to $68 a barrel and production from the Permian has doubled to 3 million barrels a day, which is more than OPEC-member Kuwait. Such is the importance of the field to Exxon that it spent almost $6 billion buying additional drilling rights last year.
The plan is to triple Exxon’s shale production to almost 800,000 barrels a day by 2025, which would be a fifth of the company’s output today. To do that, Ortwein is convinced the XTO will have to incorporate Exxon’s traditional strengths of project management, technology and long-term planning, while preserving its fast-paced no-frills culture.
An example: the Permian’s production has risen so fast that pipeline capacity is scarce, forcing some producers to take lower prices for their oil. To combat this, Ortwein wants to utilize Exxon’s vast Texas infrastructure.
“Connecting the Permian production through the midstream, to the downstream, and chemical gives us a value chain advantage,” she said. “I think it’s a real competitive advantage.”
Ortwein’s rivals aren’t resting easy. Blending XTO’s shale operation into the rest of Exxon will make it a more formidable competitor, said Greg Guidry, the executive vice president who runs Royal Dutch Shell Plc’s shale business.
“I’m much more concerned of XTO as a competitor as being a full part of Exxon than I was when they were separate,” Guidry said. “No question about it.”