Gift Horse

The oil industry has always had its share of flamboyant and buccaneering characters.

This tale is about Armand Hammer, founder, owner and president of Occidental Petroleum. I heard it from a friend who was previously an accountant at Oxy.

Hammer ran Occidental in a highly autocratic way. His business methods were idiosyncratic and not always scrupulous.

One Monday he arrived in his office furious because of something he had read in the Financial Times that morning. He had intended to fire his finance manager, after their row on Wednesday about the accounts. But the victim had seen it coming and handed in his notice. The FT reported that he had been appointed finance director of one of the big supermarkets.

Hammer believed that any senior executive who fell out with him should be fired before he could resign, and should never work again. Usually Hammer told the human resources people to do it. Sometimes he saw to it himself.

Hammer rang the supermarket’s chairman. He said that their new finance director was an idiot, and demanded that they fire him immediately without notice or compensation. In return Hammer said he would give them a seventeen and a half per cent interest in an oilfield in Venezuela.

Not all oilfields are worth anything. Many are depleting. Some are uneconomic, especially in times of low oil prices. Some even come with substantial historic liabilities.

The chairman rejected Hammer’s offer out of hand. He said they were very happy with their new finance director. They had no aspirations in the oil sector. So they had no need to look Hammer’s gift horse in the mouth.