The Irish Virtue of Being from a Small Place

By David J. O'Reilly, Chairman and CEO
ChevronTexaco Corporation

Gold Medal Industry Lecture

Dublin, Ireland, September 12, 2003

Chairman and CEO Dave O'Reilly spoke to the Royal Dublin Society upon his acceptance of the Industry Gold Medal from the Society, founded 250 years ago in Dublin, Ireland, to promote the development of industry, arts, science and agriculture.

It's an honor to be here and to receive the Royal Dublin Society's (RDS) Industry Gold Medal.

Being here at the RDS brings back many happy memories. I grew up a short walk from here on Merlyn Drive, going to school at Willow Park and Blackrock College. I remember many visits to the annual spring show and all of the exhibits as well as the horse show every August. Those visits helped stimulate my interest in business; I went to University College Dublin and graduated with a degree in chemical engineering.

I must admit that I did not know the origins of the Royal Dublin Society. In reading its history it is clear that from the very beginning in its efforts to encourage Irish agriculture and manufacturing, the society respected, recognized and rewarded the highest performance. I'm convinced it is values such as these that have contributed to Ireland's stellar economic record.

Tonight, I'd like to suggest that those of us who've grown up in Ireland are the beneficiaries of a special virtue, one that comes from being from a small place. This heritage has given us an ability to form relationships and to be outward-looking, which in turn has taught us important values – values I believe we can share in helping others in the world, especially the developing world.

I joined Chevron, a major oil company based in California, which merged with Texaco two years ago. I was attracted to the oil business because it is an exciting one involving technology, economics and geopolitics. Here you'll best know us by the familiar Texaco star on your corner service station – more than 350 of them, in fact. Today, we hold about a 20 percent share of Ireland's petroleum market.

You may be less familiar, however, with ChevronTexaco Corporation, ranked among the world's top five oil companies. Our 53,000 employees operate in over 180 countries, producing some 2.6 million barrels of oil-and-gas equivalent per day and covering all aspects of the energy business. We are one of the top oil and gas producers in the United States, Africa, Indonesia, Central Asia and Latin America. We also refine and market in the United States, Southeast Asia, Korea, China, Australia, New Zealand, sub-Saharan Africa, and Central and Latin America.

Important in the context of my remarks tonight, a growing part of our business is in less developed countries, such as Nigeria, Angola and Indonesia.

The oil and gas industry is one of the most technology-intensive businesses. We've probed frontiers, facing obstacles that demanded our best skills, our best science. To give just one example: In the late 1970s, when we towed the Ninian oil production platform into place in the North Sea, it was the largest object that man had ever moved, half-again taller than the Great Pyramid and weighing a colossal 600,000 tons.

We are now drilling wells at 3,000-meter water depth and sometimes, in excess of that, to a 6,000-meter depth. Using satellites and computer technology, we can monitor well performance off the coast of Angola.

For most of the last century, petroleum has been one of the world's biggest businesses as well. Our industry has contributed to the global economy, providing transportation fuels, heating fuels, chemicals and plastics. The contributions have helped increase standards of living and significantly improved the quality of life for billions of people.

Today, we are developing new energy resources – sustainable resources such as hydrogen fuel cells – to reliably supply energy where it's needed, when it's needed and at an affordable cost. But, for the near term, and by that I mean at least the next generation, the world will continue to rely on fossil fuels, mostly oil and gas, for the energy it needs.

Much of that additional oil and gas will come from less developed nations, because it is there – in Latin America and Africa, on the steppes of Central Asia and under the vast Asia-Pacific seas – that most of the world's new resources are being discovered.

Unfortunately, though, these are often the same places where poverty is found. And it is this issue and what can be done about it that I want to talk about this evening.

Make no mistake: We live in a prince-and-pauper world of economic disparity, and I believe this disparity is at the root of many of the global challenges we face, such as terrorism and political instability.

In Africa, as I was told recently by one African leader, the average income for most of its citizens comes to less than the agricultural subsidy for a European or Japanese cow. Surprised by his statement, I checked it out. You know what? He was right: The average European cow earns $2.50 per day, and the Japanese cow earns $7.50 per day in government subsidies. Meanwhile, three-fourths of Africans live on less than $2 a day. Almost half the population survives – barely – on less than $1 a day.

Developing nations face other plights: crushing debt, lack of fresh water, substandard health care, the absence of universal education.

By now, you might think countries with abundant natural resources would have solved such problems. But many of those countries also rank low in good governance.

There are those who blame the petroleum industry for these problems. They look at the countries where we find most of the world's oil and see nations that have largely failed to share in their own riches. They call oil a "curse."

But the fact is, the oil industry has had a very positive influence.

At ChevronTexaco, until now we've mostly focused on health and education in communities where we operate. And we've done a lot of good. For example, in Indonesia, ChevronTexaco over the years has given scholarships to more than 36,000 students. Elsewhere, we've supported technical skills acquisition programs and small-business development, and we've built hospitals, health clinics, and schools ... even housing for teachers in remote African villages.

I'm immensely proud of our record. I truly believe it has made a difference, but it hasn't been enough. All of us must do more. We've yet to climb the tallest mountain – what I call the defining challenge of the 21st century: how do we enable the 3 billion people currently living on less than $2 a day to attain a standard of living that at least approaches the standard that many of us in the developed world enjoy?

And that brings me to what I mentioned at the outset, what I most associate with being Irish: the virtue of being from a small place.

As a young person growing up in Ireland, I was convinced that almost everything important happened somewhere else. But I think all of us as we grow older come to realize that being from a small place teaches an important lesson: that the world truly is interdependent.

But I contend all of us from small places have an advantage when it comes to respecting peoples' differences and distinct contributions – and learning how to listen. You will, I hope, agree that those are the very values found in successful partnerships.

And the more I look at the problems facing us, the more I am convinced that only through collaboration can they be resolved. That's something that has guided me, especially during the last few years: the realization that we can't succeed alone.

Progress depends on all of us working together.

  • Governments, first of all, must do the things only they can do. They must advocate and practice good governance, meet basic human needs and create a favorable investment climate.
  • Multilateral organizations such as the World Bank, the International Monetary Fund and the World Trade Organization (WTO) should help governments establish good policy mixes. The WTO must push for trade liberalization particularly in the agricultural sector. Debt relief must also be tackled in a systematic way.
  • Nongovernmental organizations (NGOs) and community groups must help local populations make lasting, sustainable improvements in their own economies, not just fly in experts who fly out again a few years later. They also need to be open to working with all stakeholders, including industry – this is something I would note with some disappointment that not all NGOs have been willing to do.
  • Business, for its part, must forge new partnerships and coalitions, especially public-private ones. We should work with governments, NGOs and communities to ensure that benefits flow from our activities. In pursuing our business goals, we must endeavor to make a positive contribution to people's lives.

In short, the only way to move forward is together.

There are signs of hope. Those of us who work in developing countries are forming new coalitions that link governments, NGOS, public agencies and private companies in ways they haven't been linked before. These new partnerships and coalitions welcome all participants and they aim at improving life not just for those near our oil wells and terminals but for entire national populations and, in some cases, even entire regions.

Late last year my company formed the Angola Partnership Initiative, committing up to $50 million to spur sustainable growth. One of the projects, in conjunction with the United States Agency for International Aid. (USAID), was a major campaign to restart Angola's agriculture.

The overall benefits of this one agricultural project will reach an estimated 600,000 Angolans. And, along the way, the people will get food, farm implements and training so that the progress made is sustainable.

Separately, we're also looking at "microcredit banks" to grant small enterprise loans, satellite-based education for remote villages, and a national business development center. Whatever their specific form, each reflects the initiative's "hand up" – versus "hand out" – approach to building human capacity.

You might think that Ireland, with a population less than a twentieth of Nigeria's, could do little to solve the developing world's problems. Yet Ireland's impact and influence extend far beyond its size through Irish Aid; NGOs such as Concern, Christian Aid; and leaders Mary Robinson and Peter Sutherland. Ireland's contributions to hunger relief, education, trade reform and the eradication of HIV/AIDS, especially in developing areas such as sub-Saharan Africa, have been significant.

Tonight, I urge all of us in this room to build on these endeavors and continue to support efforts to build human capacity in the developing world.

In the end, the success of efforts such as the Angola Partnership Initiative depends on those very same 'small place' values I talked about earlier. They help us work together.

How important are these values? On a planet that shrinks every day, I believe they are vital to a secure future for us all.

How long can we tolerate a world of economic disparities so vast that human beings in one place earn less than livestock in another?

I believe the lesson of our experience in Angola and elsewhere is clear: There is a path to peace, prosperity and progress, but it is up to us to follow it by working together, by respecting differences, by listening and by valuing our mutual interdependence.

In so doing, we will prove that size can't limit our hopes, our dreams or our accomplishments. And as we share the values we've learned, we will also prove the virtue of being from this small place.

Thank you.

Updated: September 2003