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09 April 2004
Scottish Business Insider
Oil's international man of bravery

In his dynamic career in the oil industry Bill Gammell has never flinched from taking risks - after all, he knows two of the world's biggest risk takers. He also featured in the first edition of insider. Alasdair Northop reports.

When Bill Gammell was featured in the first issue of  insider in 1984, he was photographed with the Texan boss of an oil exploration company which the former Scotland rugby international's company was supporting by finding investors for its drilling deals.

George W Bush, future President of the US, then just the son of the then US vice President, was actually sitting in the offices of Cairn Petroleum - later to become Cairn Energy - when insider founder Ray Perman interviewed the ambitious young Gammell, then 31.

At that stage, Gammell had been in the oil business for around four years, spending time in the US  learning about risk from the masters of the art. He had also learned a great deal from his own father, James, chief executive of Ivory & Sime, who had backed Bush senior in the 50s.

'The 80s for me were exciting times exploring new horizons', recalls Gammell 20 years on, sitting in the Lothian Road headquarters of his company whose market cap is now over 1.2 bn.

'I got exposure to international business and to an understanding of risk against reward in its rawest sense in terms of drilling oil and gas wells. It taught me a hell of a lot. I suppose for me what was exciting was being exposed to the US can-do-culture'.

For investors who bet on Gammell the road has been a rollercoaster at times, with Cairn's  market cap sinking to a low of 6m in the early 90s. Earlier this year, however, the company hit the jackpot when it announced a huge oil find in Rajasthan, India, resulting in its market cap more than doubling in size.

At some stage in the conversation, you know that he will talk about his home-spun philosophy of 'taking the Brave Pill' - an attitude of mind which is now deeply embedded into his company.

'I think i only formalised the Brave Pill in the 90s, but it was very much the ethos i learnt from the wildcatters in the west Texas that it was only by being brave and bold that you sometimes achieved extraordinary success.

'To me that embodies the whole industry more than any other. There are very few businesses i know of that you can put a million dollars on black - drilling a well - and create $300m if you are right. The leverage to a discovery if you get the right balance of risk and reward can be huge. It is only a question of managing the failures and the financing to allow you to take particular bold moves without going bust on the way.

'One over-riding challenge for me is that you are, to some degree, a product of your roots. I was the son of a succcessful father whose one failing was probably of not leaving behind a succession plan in Ivory & Sime.

'But there is no doubt he created a huge amount of entreprenurial talent who then left and set up extremely successful businesses: Stewart Newton of Newton fund managers, Walter Scott, the guys at Aberforth Partners and Artemis. I believe in an entreprenurial culture and i am happy to do anything to encourage people to fulfil their potential in whatever area in life'.

Back in his home country Gammell witnessed a new dynamic culture which resulted in the redevelopment of key parts of Edinburgh including the site where Cairn's HQ is now based.

'Maybe there was a reaction to the Glasgow's 'Miles Better' campaign',  he says. 'I think people realised Edinburgh was a great city to live in, but we had to grow and attract people externally to have a more vibrant economy. At the moment I wonder whether we have slightly stalled'.

However, Gammell is encouraged by movements like the Entrepreneurial Exchange.

'It does a great job in encouraging people to go for it and helping them by sharing experiences with others who maybe had failures on the road to success'.

Looking back over the past two decades Gammell would have liked to have seen more independent Scottish businesses created.

'But I am hugely impressed by the lead of the banks, particularly in showing what can be achieved from Scotland. So I am keen to see that Scotland is regarded as a strong location for headquarters and that we don't set our horizons too low'.

Gammell also believes that a more positive attitude is key to the country's future.

'If in 20 years time we can look back and say confidently that the culture of Scotland is one where the glass is seen as half full and where our natural scepticism and Calvinistic conservatism are positive attributes, combined with a culture of going for it and not being frightened to fail, it would be very positive to me'.

Meanwhile, Gammell is reluctant to talk about his links with the Bush family and particularly the young oilman visiting his office in 1984.

'He was just one of the guys we were doing business with', says Gammell, who was also at school with Tony Blair at Fettes College, putting him in a unique position of knowing two of the most powerful men.

Gammell has been a regular reader of insider since he was featured in that first issue and believes it has been fulfilling a positive role within Scottish business.

'Insider has acted as a business forum widely read by people in the community to get a better understanding of growing business in the economy of all sectors.

'I think it has acted as a good focus for what is going on over and above what the dailies are doing and that is only to be applauded'. 

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