Russ: This is the PKF Texas Entrepreneur’s Playbook. I’m Russ Capper, this week’s guest host, and I’m here with Denise Patrick, managing director of Energy Markets Access and lead researcher of the Profit and Peril Report. Welcome to the Playbook, Denise.
Denise: Hey Russ, how are you?
Russ: I’m doing great. Great to have you here.
Denise: Great, I’m excited.
Russ: Well, lead researcher, tell us how this evolved.
Denise: Well, it’s very interesting. We had conducted Energy Markets Access about two years ago, a research report for INSTOK, which is a Norwegian oil and gas company. And in that, we interviewed all the Norwegian companies that had come to the US and what happened. And then when PKF got involved, and we also got involved with the other sponsors, we really wanted to see if there were any differences across countries or culturally. So this time, the report is comprised of hundreds of hours of interviews with mid-market sized companies in oil and gas: half companies from the US that are internationalizing out, and half companies—foreign companies that are internationalizing in. And they’re all across the value chain in oil and gas. So, we interviewed them just to hear what their experience is like; what the story is, because we all go through this, and I was interested in knowing if there were differences and how business owners approached markets and that type of thing.
And what was interesting is, there is no difference from where you come from. The difference is that all of us have to remember that no matter where we’re going, it’s different than where we came from.
Russ: (That was unanimous)
Denise: So, even if it seems very similar, you know, like Europeans coming to America or etcetera, we do know it’s going to be different but I think it’s human nature that we underestimate the actual differences. So, check your assumptions, because the way that capital flows through the market, the way the money flows through, the way a market works, is very different every country you go to.
Russ: And very important.
Denise: And very important because, obviously, the name, Profit and Peril: there’s definitely risk involved when you internationalize or you go somewhere, but the point of doing it is to make money. So, when you’re looking at a market, you have to look at things, because we make assumptions. For example: in oil and gas, we’re the only nation that owns its own— personally owns their own land rights. So, wherever else you’re working, you’re working against competitors who’ve been selling to their home national oil company that whole time, and the value propositions are different. So, here we have a cost analysis associated with everyt—everyone does; I mean, when you’re transacting, it’s capitalism. We’re all functioning in a capitalistic market here, all over the world. But here, we want to know the cost analysis, we want to know the benefits, but we’re always just automatically thinking about how it’s going to work out moneywise.
But in other countries, where the government is funding a lot of the oil and gas, there are additional objectives that Americans might not be aware of. For example: in Norway, everyone knows this about Norway, their national objective, and they really invest a lot in this, is technology and innovation. So, if you’re creating a value proposition to sell in the North Sea, you want to start with those benefits first and then the money; as opposed to, how does this work for you moneywise? Which is how, America, we want to know that first, and if that’s going to work, then we also want to know about the benefits. It’s just a different way of telling your story, I think.
Russ: I really appreciate you sharing that with us.
Denise: Thanks, it was fun.
Russ: You bet, you bet. For other International topics visit www.pkftexas.com/internationaldesk. This has been another Thought Leader production, brought to you by PKF Texas Entrepreneur’s Playbook.