Morningstar's 2012 CEO of the Year Reshaped Oilfield Equipment
Our winner has done a stellar job at capital allocation, identifying major industry trends, investing billions in capital ahead of the shifts, and then executing brilliantly on deals.
The oil and gas industry can be deeply unforgiving. Drilling a well can cost tens, if not hundreds, of millions of dollars. Even then, success is not guaranteed. After spending months scrutinizing seismic analyses and well logs, a well can still turn up bereft of commercial quantities of oil and gas. The last things an oil and gas company wants to worry about are whether the rig's equipment is reliable, whether the roughnecks on the rig are familiar with it, and whether the next shipment of drilling consumables will arrive on time.
Morningstar's 2012 CEO of the Year-- National Oilwell Varco's (NOV) Merrill (Pete) Miller Jr.--has successfully minimized those concerns for his customers. Furthermore, he's done a stellar job at capital allocation, correctly identifying several major industry trends, investing billions in capital ahead of the shifts, and then executing brilliantly on deals to ensure National Oilwell Varco stays ahead of its competitors. The degree of difficulty here shouldn't be underestimated. It should be noted that far beyond just a single deal, Miller has pursued an acquisition-heavy strategy that carries the risk of operational miscues in an industry where reliability is prized, and he pulled it off without a hitch. Miller's excellence across all three facets of a CEO's job (strategic insights, capital allocation, and execution) is indeed a rare combination.
Stephen Ellis does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.