If you are going to be big, you have to make it work for you. The problem for Big Oil is that one of the world’s biggest opportunities, shale, doesn’t necessarily reward bigness. Royal Dutch Shell’s partial retreat from U.S. shale this year suggests it overreached as it scooped up assets there. Latecomers always risk getting the crumbs after first-movers have picked up the choice cuts. But there also is a structural problem confronting Big Oil. Until recently, majors went anywhere but the onshore U.S., thinking it was tapped out. Instead, they hunted “elephant” fields with huge reserves in deep-water locations or far-flung countries. This played to their strengths. Huge balance sheets and solid credit ratings allowed them to finance megaprojects. Bob Brackett, analyst at Sanford C. Bernstein, characterizes the majors’ model as deploying capital and technical teams with “lots of command and control.” One advantage: This model scales […]