STEPHEN HESTER

Stephen Hester has more than 15 years of global, C-suite and senior executive leadership experience in the oil and gas industry, with multi-billion dollar supply chain expertise across: procurement, sourcing, contracting, category & supplier management, logistics, and sales & operations planning.

Hester has had global responsibility across a $4 billion annual spend, led post-merger supply chain integration of a $34 billion acquisition, and been named by the board as a corporate director of a $12 billion oilfield services division. Hester’s executive roles have provided unique perspective and expertise spanning integrated operating companies and oilfield service providers. This combination enables him to understand business drivers, recognize critical trends, and leverage his business acumen to drive bottom-line value. 

Passionate about continuous improvement, Hester repeatedly has succeeded as a change agent in transforming global procurement organizations from “silo” functions into strategic business partnerships. He is known for his ability to integrate complex, matrixed organizations. Utilizing a diplomatic, inclusive style, Hester is adept at gaining alignment among key stakeholders who often have conflicting agendas.

In 2010, Hester was recruited into Smith International as Chief Procurement Officer.  Reporting to the CEO, his responsibilities included $4 billion in global spend and leadership of a team of 125 across the breadth of Smith.  Hester achieved large-scale transformation, including implementation of a strategic sourcing organization (“Smart Source”) yielding $55 million per year in immediate savings.  He led the sales and operations planning process (s&op) to improve demand forecasting, increasing revenues and reducing non-billing inventory from 75 to 20 days.  Hester also has significant post-merger experience, having led a supply chain integration with Schlumberger that produced $175 million in cost synergies.

Prior to Smith, from 2002 to 2009, Hester was an executive with ConocoPhillips. As head of Global Well Operations – Procurement, he oversaw worldwide sourcing, contracting and management of key drilling and completion-related suppliers across an annual 1,500 well / 110 rig / $3 billion budget. Hester’s philosophy of business partnering and continuous improvement helped him enroll regional drilling managers as part of a monthly steering committee. Under his leadership, the committee dramatically reduced rig NPT, reduced overall wellbore AFEs and improved safety TIRRs. In anticipation of the 2008-2009 decline in commodity prices, Hester’s team renegotiated $75 million in immediate supplier pricing concessions to maintain profit margins in Q4/08.

Also while at ConocoPhillips, Hester oversaw post-merger integration of Burlington Resource’s supply chain operations while maintaining activity levels. This generated $175 million and $120 million in net prior-price savings for 2007 and 2008, respectively, on such critical services as rigs, directional drilling, pressure pumping, drilling fluids, wireline and general oilfield services. Hester strategized and negotiated a creative solution for the 3,200-unit compressor rental fleet, including neutralizing the vendor’s charge for unit change-out costs ($125K/unit/change-out). He revamped the $500 million-a-year OCTG supplier agreement ensuring floating price discount, reduced inventory balances by 67 percent, and achieved 100 percent continuity of supply.

From 1998 to 2002, Hester honed his strategic thinking and results-oriented, problem-solving style as a Senior Strategy Executive with Accenture. There he led C-level engagements with energy clients to improve their hydrocarbon and material/service supply chains.

Hester holds an MBA in Finance and Management from The University of Texas at Austin and a BA Degree in Economics from Westminster College in Missouri. He is a frequent speaker before the Supply Chain Council, APICS and Procurement Leaders Forum, and he chairs the Oil & Gas CPO Round Table.

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