President’s Lunch – Judith Hanratty Address 12 MArch 08

Judith Hanratty, barrister, Company Secretary and Counsel of BP plc until 2004, who is now a Director of the UK Gas and Electricity Authority provided an insightful and inspiring address at the President’s Lunch on Wednesday 12 March 2008. She was awarded an OBE for her services to the Oil and Gas industry in the UK in 2002 and more recently has been appointed a Commander of the Royal Victorian Order.

This was the first President’s Lunch during the term of our President, Richard Fowler. In introducing Judith Hanratty, Richard Fowler paid tribute to Judith’s career which includes being our highest serving corporate lawyer and her central role in the energy sector in the Northern hemisphere. She is one of the highest-achieving Kiwi women in international business circles.

Colleagues from throughout the profession gathered at Russell McVeagh’s offices, for a lunch generously hosted by Russell McVeagh.

It was a remarkable privilege to meet with Judith Hanratty. Judith was born in Wellington and completed a Bachelor of Laws and later Master of Laws with Honours at Victoria University. In 1986 Judith’s career took her to BP’s head office in London, though she does visit her New Zealand home each summer.

Judith was heavily involved in some of the biggest global oil deals of the 1980s and was the most senior woman in BP throughout her time with the oil giant in London. Judith is still in the energy business as a member of the UK Gas and Electricity Authority. Her personal views on the worldwide future of energy, and comments on her role as a regulator were insightful and fascinating.

Judith’s address was packed with thoughtful observations and facts and figures on oil and gas and other forms of energy generation, how this interplays in the world economy, and affects us in New Zealand both in the present and into the future.

There has been rapid change in the energy sector in recent years. The price of oil is at its all time record, and unfortunately, at least in the medium term, the era of cheap energy is behind us. Energy security and access to reliable energy are key issues for governments worldwide. The world is becoming steadily more dependant on traded oil and gas. Twenty years ago world oil trading accounted for 45% of supply. That figure is now nearly 70%.

Judith commented that growth in the trade of oil and gas is actually a good thing as it is an indication that the markets are resilient, robust and strong, and free trade creates mutual dependence and mutual advantage.

For all of us worldwide this means that we have to ensure in each country that the domestic market is well integrated into the global energy market. And while we may strive for self sufficiency, we can never know what is around the corner – there is always the possibility of the unknown exemplified for the US by Hurricane Katrina.

Looking forward, energy demand is expected to rise by 50% in the next 20 years - 70% from developing countries and 30% of that just from China.

Alternative forms of energy generation such as wind, solar and biofuels, are growing. For the time being we are reliant on fossil fuels. Judith spoke on the world’s oil and gas future production and how they are still central to the world’s supply for some time.

Judith spoke on the challenges of production (pipelines, geography, engineering and the politics), and other pressures on the industry such as climate change.

For us as lawyers, there are other implications. Judith commented on the great need for lawyers in this environment. Meeting the future challenges will require cross-industry collaboration which in turn requires agreements. Agreements can break down and then too more lawyers are required.

It was fascinating to learn that with the strides in disposal of nuclear waste, nuclear energy could perhaps be an option 10 to 15 years out for those who have not yet got it.

Judith also commented on future issues in the energy sector, which include investment, standardisation, and getting efficiency into the sector; and on emissions trading schemes. She referred to some of the issues arising now in regulation, particularly in the UK.

This was a comprehensive, thorough and knowledgeable briefing on the energy sector from a business leader and lawyer who knows the sector inside out and has immense breadth of experience.

Andrew Butler, Partner in Russell McVeagh in his vote of thanks acknowledged how Judith had taken us through the vast range of developments affecting energy and in a way that all of us could understand and tap into. She had communicated complex ideas in a way that could be readily understood.

My grateful thanks to Judith Hanratty for her assistance with this article.