AGAINST ALL ODDS

It’s no secret that Ireland is home to some of the most innovative minds globally and Aidan Heavey stands out as a shining example of pioneering creativity in business. He saw and quickly seized an opportunity. He cultivated his vision and sold it to investors. He reveals to Niamh MacSweeney the secret to his success

As founder and CEO of Tullow Oil, Aidan Heavey has played a key role in the development of the company from its formation in 1985, to its current international status as a leading independent oil and gas exploration and production company.

With an obvious eye for opportunities and endless confidence to turn a vision into a reality, Heavey saw plenty of prospects in the oil and gas industry and so set about convincing others of his foresight.

“I travelled to Africa and saw a brilliant opportunity even though I didn’t have any money,” Heavey admits. He beleives that this is what makes entrepreneurs different from managers, because although they might not necessarily have the resources, they always see the opportunities and this is what pushes them to succeed. “The biggest distinction between an entrepreneur and a manger is that a business manager basically takes an asset and certain resources, be it a financial resource or human resource, and manages them as best as possible. But an entrepreneur will look at an opportunity and is never resource constrained. If the entrepreneur thinks an opportunity is good enough then they will find the resources to do it,” Heavey explains.

SET-UP CHALLENGES

The oil business is very different from any other business in that it requires enormous amounts of cash. It is extremely different from setting up, for example, a manufacturing plant in Ireland, where your local market helps to establish the business. With an international oil and gas company there is no local market so you have to go straight into an international market, because ultimately the world is the market.

Building up the reputation of the company, persuading investors of the opportunities available and convincing top class people to come and work for Tullow Oil, with all the uncertainties, meant it was a constant struggle in the early days. According to Heavey people thought he was mad and while they could certainly see opportunities in the Celtic sea because it was close to home, the idea of setting up in Africa, and knowing nothing about the oil industry, was considered by many as utterly insane. But Heavey says, “when you get stuck into something and you are focused on it I find that I just ignore everybody. I was doggedly going ahead and I was going to prove everyone wrong.”

Undeterred by the mammoth challenge of funding Tullow Oil, Heavey forged ahead and against all odds managed to persuade banks that a business man from Roscommon could build one of the largest independent oil and gas exploration companies in Europe.

“I’m a confident guy and if I see something that I think is a great opportunity I will be able to talk people in to giving me the money to do it. When Tullow first started off everybody treated it as a complete joke from a banking point of view and from an investment point of view because we had no experience in the business and no backing and it had never been done before,” he admits.

Building credibility for the company took time but Heavey managed to grow the business from zero to a market value of £5 million sterling by 2003. It was at this time that he decided to take stock and re-examine the business model. “We built on our key strengths and decided we would try to accelerate the process by trying to buy into the company in the areas that we were weak at. We saw an opportunity in Energy Africa, which was a company on the Johannesburg stock exchange and we bought that in early 2004. What we were trying to do there was to accelerate our growth and from 2004 to today which is three years later, we have gone from a five million market cap to three billion sterling, so we multiplied it six times in three years,” Heavey proudly reveals.

STEP CHANGES

According to Heavey every business should regularly re-evaluate their business methods because it is crucial if the company is to expand and embark on new opportunities. “One of the aspects of the success of our business is understanding the faults of the individuals. I know what I’m good at and I know what I’m not good at and I surround myself with people who are good at the things that I’m not good at. People sometimes make the mistake of hiring clones of themselves and they think that is what they actually need, but in fact it is quiet the opposite, you need people who are the opposite to yourself,” he says.

Heavey graciously admits he did make mistakes in the early days. “You reach a plateau and you wonder where you are going to go next. You are so tied up in the business that you miss some of the opportunities in that business and you need to stand back from it and get fresh new blood in and look at the opportunities going forward. Those step changes are difficult but if you look at Tullow, in the oil industry it is pretty unique. Its never been done before and the reason for our success is because we have actually took a step back and looked at the business critically at different stages and brought about changes. Looking back I probably would have shaved off maybe about ten years off our growth period by knowing what I know today,” he reveals.

INVALUABLE ADVICE

Although Heavey is clearly confident in his endeavours and although he exudes an aura of success, he is not afraid to admit his mistakes. “When you start up your business and you have your initial success you think you are great and you don’t listen to anybody because you think you have done this yourself and you are better than everybody else and that is a problem,” he says. He recalls Tullow spent three years fighting a battle in Bangladesh with Chevron Texaco over a licence, which he says completely took their attention off the ball. “In hindsight it was madness, I should have done a deal with them on day one instead of wasting three years of the companies’ life. Sometimes you get caught up in things and really it is ego and arrogance so basically you should stand back and think what am I doing and if you are wasting good time or money its time to call a halt to things before they really back you into a corner,” Heavey warns.

RISK TAKING

So for a man who defied all the odds and for someone who managed to instil his beliefs in others, is Heavey a businessman intent on taking numerous risk in business? Apparently not as he informs with a laugh, “I don’t actually take risks. People think entrepreneurs are risk takers but I’m not sure that is the case; I think they are opportunity takers. I don’t say to myself ‘I’m going to take a risk on this’ I say this is ‘a great opportunity’ and I’m pretty confident that I will be able to get the funding to do this.”

LEADERSHIP ATTRIBUTES

Heavey is adamant that he is not and never will be a manager, rather he is a motivator who has the ability to inspire and infuse confidence in others. He is also good at taking responsibility for his actions, one of the main criteria for any business owner. “I don’t shoulder responsibility and I don’t blame other people for mistakes. Ultimately if you are running a business the buck stops with you and so we don’t have a blame culture; it’s a learning culture,” he says. By giving people within the business a sense of ownership people working in Tullow oil feel they are part of that culture. According to Heavey there are numerous ways to encourage shared ownership and through proper corporate social responsibility, which is the foundation from which Tullow was started, employees get a sense that management care about, not just the community they are working in, but it also shows the company cares about its employees.

ENERGY CONCERNS

There are an abundance of theories and predictions on a possible energy crisis looming and it’s obvious that we will have to think smarter in terms of energy consumption in the future. Heavey maintains the biggest problem we have is not things like oil or coal because we need these as developed economies, but the fact that there is no viable or sustainable alternative right now. There are great business opportunities for entrepreneurs starting businesses in renewable energies but according to Heavey the reality is that renewable energies are not going to be able to replace fossil fuels because the world cannot generate enough product “There needs to be a gradual move from carbon emitting fuels to alternative energy but what are the alternatives?” he asks. “There is big business in alternative fuels but you look at the ethanol plants and the problem is if you replace coal or oil with these ethanol products you use up all the food resources of the world. The big question is should you be using grain for ethanol when people are starving all over the world?”

Heavey argues we are going to have to seriously consider how we generate electricity and he maintains that the cleanest way to do this will be through nuclear power. Heavey claims, “nuclear plants are inevitable and it’s a cleaner way of generating electricity. Twenty years ago with the Sellafield plant, nuclear energy literally stopped and got a bad name, but the times have changed and the technology has changed and I think the way fuel prices are going nuclear power is going to be back on the picture big time.”

Published in the Yearbook 2007 of Irish Entrepreneur