Field Fraud In O&G:

Today I was reading an article about a Southwestern Energy Employee whom pled guilty to embezzlement. Seems she had stolen roughly $450,000 from the company in a scheme internally in the office. She has 4 counts of wire fraud, each with possible 20 year sentences, but wether they get imposed fully, or wether they are consecutive or concurrent, remains to be seen.

Although we rarely hear of such a scheme in the office involving an AP/AR employee, when we do hear about cases like this, they are prosecuted.

It leaves one to wonder why so rarely a company will pursue prosecution and repayment in most cases that don't make the press.

Part of the boom bust cycle is always the intensity and volume of work, invoices, and high service costs. Leaving many avenues for such activity to occur. The scale of this problem is much bigger than the industry cares to admit. Often times in my career I have been left to assume that most companies refuse to dedicate the resources to prevent, or catch the majority of this. Often times when they catch someone, they refuse to prosecute them. Why is that? Is it that they do not want to publicly admit to investors that they should not trust them so freely? A possible public and investors relations nightmare?

We all see it, we have all witnessed it at all levels. I will say that where you have one individual, you have multiple that cover several layers of supervision. I always go back to the old saying, birds of a feather, flock together.

I remember my grandfather, he would say, do not ever cut rates, do not ever buy your work. It is not worth it, a company or person is better off to sit and go broke with a clear conscience than to live that lie and be owned by anyone. I have always applied that when I was in the service side of this business. I have always applied that while working on the E&P side of this business. Give me an honest attempt to do the work, good or bad results happen equally. Give me an honest invoice. Answer the phone and don't avoid issues, as well as swing by and check on your crews and customers. No need to bring me lunch or hats or gifts. If you bring lunch, bring it for the crew as a token to your own crew of appreciation. But nothing should be expected, ever.

Read more: http://oilpro.com/post/24144/greed-and-theft-disease-plagues-mankin...