But the industry, as a whole, has been appallingly slow in coming to terms with the changed priorities of its primary market, the western consumer. There were valid arguments for draconian action in the 1980s and 1990s. Unparalleled cash flows in the previous two decades had led to swollen staff numbers and a portfolio of investments well beyond the industry's core competence. A return to record levels of profitability in recent years should provide senior management with the confidence they need to take another look at their public images. They must take the opportunity to rebuild their reputation as major contributors to economic growth, as pioneers in the development and application of technologies that reinforce, rather than hinder, the attainment of public sector goals and of being good citizens as employers.
Oil companies have a good story to tell.
But they need to overcome the decades of bad habits which have reinforced their reputation as nay-sayers to government and customers. Unless they do, they could become vulnerable, as public disdain at their high-handed methods combines with a wave of higher prices to create a demand for more intense regulation. This contingency is not so remote and could become frighteningly real with a single sustained disruption in the Persian Gulf or north Africa. In just such an environment, oil companies might witness a major review of the laissez-faire regime in which they have operated for decades.