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Energy Advisory Board Spotlight on member Clay Williams By Janet Miranda

clay-williams-web.jpgClay Williams, Chairman, President and CEO of National Oilwell Varco is one of the 24 industry leaders who make up the UH Energy Advisory Board. Williams is part of the effort to lend strategic guidance to the energy initiatives at the University of Houston, helping to develop resources and strengthening the university’s reputation in Houston and beyond.

Williams has worked for NOV and its predecessor companies for more than 20 years, serving at various times as COO, CFO, VP Finance & Investor Relations, VP Corporate Development, and VP Pipeline Services. Before joining a NOV predecessor company in 1995, Mr. Williams spent two years with SCF Partners, a private equity management firm which invests in oilfield service companies, and seven years as a petroleum engineer with Shell Oil Company, where he began his career.

Born and raised in Katy, Texas, and currently residing in Houston, Williams received his bachelor’s degree in Civil & Geological Engineering with highest honors from Princeton University, and a Masters of Business Administration from the University of Texas. He has been named CFO of the Year by both Institutional Investor and the Houston Business Journal.

Since 2008 Mr. Williams has served as a director of Benchmark Electronics, Inc. (NYSE:BHE), a global provider of electronic manufacturing services. He was previously Chairman of the board of directors of the Center for Hearing & Speech; and is currently director of the Sam Houston Area Council of the Boy Scouts of America; director of Spindletop Charities; and a member of the Society of Petroleum Engineers.

The following conversation has been lightly edited for clarity.

UH Energy: How long have you been on the Energy Advisory Board? What do you try to bring to your role with the board?

Clay Williams: I joined a couple of years ago and was very pleased to do so. I think the University of Houston is an exciting place that has a growing presence in the energy space with its relatively new petroleum engineering degree program. The opportunity to contribute to that, and to bring some perspectives from the energy space, is very appealing to me.

UHE: How do you think the EAB helps UH ensure that our students are prepared to join the energy industry?

CW: The EAB gives constructive feedback to Dr. Renu Khator, the faculty, and the administration at the university in terms of what skills we are looking for from new college graduates. The EAB can also help provide guidance with respect to research efforts that the university undertakes in energy.

UHE: What advice would you give yourself as a college student?

CW: What I've learned as an executive working in business since I graduated college is that so much depends on teamwork. What I would have told myself back then is to focus on academics and studying, but also to focus on leadership development and teamwork skills. Because in business it’s not about individual success -businesses succeed or fail as teams. They require a diversity of perspective and talents to be successful. What I've learned is the real importance of leading diverse teams with different skill sets, talents, and perspectives. That's really the key to success in business. I didn't fully appreciate that as a college student.

My other piece of advice, I would say: pay more attention to what mom and dad tell you.

UHE: What do you attribute your success to?

CW: I have been very, very blessed in my career. I encountered a lot of people that took a chance on me, and I will always be grateful for those mentors that influenced my life. I’ve always tried to remember that I'm very fortunate to be in the position that I'm in, and that I have a deep responsibility to the people that I work with. I recently counted 14 jobs that I had before I graduated from college, starting from the time I was 15 years old, through college graduation. When I think about my experiences, I realize I really learned a lot by all the different jobs and people I worked with through that period, before I launched my career. Those experiences did a lot to shape me as a leader.

UHE: The industry has gone through a lot of changes over the past five years. How has NOV adapted to the changing environment?

CW: Five years ago, most of NOV’s revenue and profitability was derived from offshore activity in oil and gas. One of the big changes we've seen in the downturn that has hit the oil and gas industry is that the offshore sector of our business has declined the most.

This has forced us to, first, adjust our size to smaller market prospects offshore, which was very difficult on our employees and our organization. The second thing that we've done is to focus on areas that have seen higher levels of activity, as compared to offshore. So, we've pivoted towards unconventional production technologies. These technologies are unlocking new sources of oil and gas from onshore shale formations in North America and are currently expanding into international areas.

Shale is a very tight, almost impermeable rock that was previously uneconomic to produce, but has seen the application of horizontal drilling and hydraulic fracture stimulation make its production much more economic. Our organization got very focused on providing these technologies to the oil and gas industry and, consequently, we pivoted from being about two-thirds offshore several years ago to being two-thirds land based today, reflecting the pivot to shales, which are all on land.

Finally, we’ve been quietly exploring opportunities in alternative energy that I’m excited about. NOV is now the one of the largest suppliers of equipment used to install offshore wind turbines, for instance.

UHE: How do you see the next class of students changing the landscape of the energy industry? Specifically, in the oil and gas industry?

CW: There is a lot of attention focused on climate change and the carbon footprint that fossil fuels generate. There is also legitimate scientific debate around quantifying the impact that this may have on atmospheric temperature. In the end, I think that mankind will pivot to a lower-carbon-footprint source of energy, probably a combination of sources, to stem the risks of climate change. This will not be an easy transition, and [more] importantly, fossil fuels will still be required for decades to come. In fact, I think natural gas will play an important “bridge fuel” role in this transition. That challenge - executing the transition - is going to fall on the next generation of leaders entering the energy [industry].

I'm confident that innovation, technology and creativity are going to lead us to new sources of energy but in the meantime, the oil and gas industry will remain a critical industry, because, for instance, air transportation is solely dependent on oil and gas operations which produce jet fuel. Our food supply chain, the one that feeds the planet's seven billion inhabitants, depends on oil and gas operations. I mean, tractors are powered by diesel, combines that harvest grain are powered by diesel, the fertilizers that drive up agricultural yields and productivity are manufactured with natural gas. So for the next few decades at least the oil and gas industry will remain critical to feeding the planet, improving the standards of living, and lifting people out of poverty globally.

In the long run, I believe the creative minds within the oil and gas industry will lead the way in finding and developing more sustainable sources of energy. The skill sets that we employ in oil and gas are precisely the sort of skill sets that are best suited to undertake this challenge. We raise capital, execute complex projects, build out sophisticated supply chains, and employ emerging technologies in very practical ways.

Oil and gas is an exciting industry, it's a critical industry and it's an important industry. The future generation of students that are studying now to launch their careers in this industry will have tremendous opportunities ahead, while making people’s lives around the globe better and helping to lift them out of poverty. I’m very proud of what the oil and gas industry has done to improve people’s lives and I’m looking forward to seeing what innovative people who make up this industry come up with next.