Ron Clark has become a “weel kent” face in the Houston oil & gas community and always turns up at the Post Oak Hilton when the Scottish group makes its annual pilgrimage to the Offshore Technology Conference in Houston.
This product of Aberdeen Grammar School has been around the business for years and these days prefers to share his experience with others trying to break into the US upstream oil&gas marketplace.
It was Ian Gordon (another OTC stalwart and, in the early 1980s, director of the Scottish Development Agency in Houston) who introduced Clark’s then employer in Aberdeen to an American businessman from Texas who was looking for someone to promote the use of steel coiled tubing in the North Sea.
Clark’s boss didn’t bother with the idea, but the man from Texas and Clark started working together and they got along famously, apparently. The predictable happened: he was asked to move to Houston – and did.
“I then travelled the world pioneering the introduction of the company’s products,” recalls Clark.
“That was over 24 years ago and the decision to go was the right one for my family, my wife of 35 years, Gwen, and two sons, Iain and Duncan.
“Often during our frequent return visits to Aberdeen Gwen and I are asked the same age-old question: ‘Why America? Isn’t it dangerous? Isn’t it easy to lose your shirt?’.
“Remember, in the early ’80s, the Cold War was in full swing, the Cuba missile crisis and desegregation were but 20 years previous … a mere nanosecond in historical terms.
“The main reason for the move can be summed up in that overused word – opportunity. There is no other country in the world that will welcome new businesses and provide the conditions necessary to succeed. And it’s still true today.
“In any case, I really wanted to escape the ‘tall poppy’ syndrome so typical of business and social life in the UK.”
1990 saw Clark and a couple of colleagues set up a new business in Houston serving the coiled-tubing industry.
“Two investors put up all the money on a handshake and we sorted out the shareholders’ agreements later,” says Clark.
“Unusual, definitely, but talk about commitment and loyalty all around. The enterprise flourished and was sold to a strategic buyer in 2002. That was the realisation of the American dream for me … risk acceptance for appropriate reward.”
Time for a change; Clark trained his sights on Russia and eastern Europe, particularly Belarus, where he had established strong business relationships. There, he helped to build up a coiled-tubing-related manufacturing business and then helped with the sale of that company to a major US entity in 2005.
“Who but an American company would invest in Belarus, a country seen as in the grip of a dictator. Things are not always what they seem from the outside. One important thing I learned is that you have to be in the country and understand the culture before pronouncing judgment from afar.”
Another chance to pause, take stock and set up something else?
Clark: “It occurred to me that many UK and European-based firms shy away from the US as a place to expand. I put this down to fear of the unknown. A major faux pas committed by many incoming firms is the assumption that the business cultures in America and UK/Europe are the same; after all, America is full of Europeans. It is a natural assumption, but dead wrong.”
So what Clark does today is provide support for UK/European companies that wish to explore the opportunities available in the USA without setting up a full cost facility with all that that entails: offices, staff, long-term contracts, and so forth. This is about easing the way into the market.
“From my Galleria offices in Houston, I feel able to advise incoming businesses about the particular risks of an expansion into the US.
“In my opinion, there are three principal platforms that need to be considered before committing major funds.
“One: the product or services must comply with all US regulations across 50 states and should be established as in demand by means of an, initially, brief market study. Just because a product is more cost-effective that does not guarantee success, not by a long way.
“Two: commercial terms and legal work concerning setting up the new entity need to be examined to ensure that the new entrant can live with the cost and burden of complying with all US tax laws, immigration laws and environmental restrictions.
“Three: engage a savvy and very experienced US partner. To many, this seems like an unnecessary step, but my personal experience tells me differently. Too many market entrants fret about the old bogie of allowing access to their technology. This can easily be managed with the construction of the usual agreements. Hire top American management after satisfying the earlier points. Certainly, send any implant in a fairly senior position, but not at the top.”
Clark’s view is that inadequate preparation is the main reason so many potentially very successful cross-Atlantic partnerships do not realise their objectives. Not only that, it is forgotten just how important the US is in the global petroleum game.
“Right now, the US is not seen as flavour of the month for new investment. But consider this: most of the top commercial energy-related decisions may be announced in foreign lands but, so often, they are approved through the US corporate offices and in Houston, Texas, in particular.”
If you want to get in touch with Ron, e-mail him at email@example.com