For ConocoPhillips, Harvey a test of remote operations

HOUSTON (Reuters) - ConocoPhillips is still shut out of its global headquarters nearly two weeks after Tropical Storm Harvey slammed into Houston, so Chief Executive Ryan Lance and thousands of employees are running the world’s largest independent oil and natural gas producer remotely.

Ryan Lance, Chairman and CEO of CononoPhillips, listens to Chinese Premier Li Keqiang, at Zhongnanhai Leadership Compound in Beijing, China June 20, 2017. REUTERS/Fred Dufour/Pool

Lance, whose own Houston home was flooded by Harvey, has 2,800 employees in the region working at home or at smaller offices in Dallas or Bartlesville, Oklahoma, overseeing natural gas trading along with operations in the Texas Eagle Ford shale region and the Gulf of Mexico. Many were moved out of Harvey’s path before the storm.

“You can run virtually for a long time if you’ve got the right systems and personnel,” Lance told Reuters on Wednesday.

Conoco’s headquarters in west Houston sustained minor flooding damage, but roads to the campus are still submerged under several feet of water. Another nearby ConocoPhillips office was flooded.

“Like everyone else, we didn’t anticipate all this rain. The damage quickly passed for our Eagle Ford operations, but then our attention turned to our headquarters,” he said.

The flooding stems from a decision by regional officials to release water from a nearby reservoir to prevent collapse after nearly 52 inches (132 cm) of rainfall during Harvey.

Conoco initially expected to reopen by Sept. 5, but flooding pushed that back until at least Sept. 11. The company is not expected to need temporary office space, he said.

Lance, CEO since 2012, said he speaks daily with emergency staff and board members, most of whom do not live in the Houston area. About 8 percent of Conoco employees in the region, roughly 200 people, have long-term home damage from the storm.

Conoco said it donated $5 million to the United Way and American Red Cross, the largest sum from any oil company in Harvey’s wake.

BP Plc’s U.S. offices, less than 2 miles (3 km) west of Conoco headquarters, suffered extensive flooding and are closed indefinitely. Some of the day-to-day functions were absorbed by BP’s London headquarters.

Companies that need temporary office space will find a Houston real estate market with spare capacity, though the extent of damage is unclear. There were about 10 million square feet of office space available ahead of Harvey, according to real estate firm CBRE.

“As oil and gas companies continue to downsize in response to the low oil price environment, Houston remains flush with sublease space with existing furniture already in place,” said CBRE’s Graham Horton.

Reporting by Ernest Scheyder; Editing by Matthew Lewis