PAUL FRANKEL, who has died at the age of 88, was the most distinguished and influential oil consultant of our day. His contribution to the understanding of the oil industry was profound.
From his earliest work, Essentials of Petroleum, first published in 1946, he underlined the fact that the industry was not self-adjusting. To observe that oil is a liquid - as he did - might appear a truism. To spell out the economic implications of this fact - the relationship of fixed and variable costs, the price inelasticity of both supply and demand, the menace of the marginal barrel combined with the aleatory nature of exploration, all leading to the inherent instability of the industry - was to illuminate for oil men and women the framework in which they lived their working lives.
A 'free' market, Frankel pointed out, oriented solely towards lowest-cost oil, would result in violent fluctuations damaging for both consumer and producer and was an unworkable alternative to some system of 'management' in which a latent surplus of supply maintained a downward pressure on price. In a world where demonology thrives, he was exceptional in judging this 'management', whether by the major oil companies or Opec, with dispassionate analysis. That members of both came to learn from him was witness to the scrupulous independence of approach which underlay his success.
Frankel was born and educated in Vienna and entered the oil industry in 1925, holding executive posts in Austria, Poland and Danzig. He came to Britain in 1938, working first with oil brokers and then Manchester Oil Refineries, of which he became a Director, before setting up his own consultancy.
While Frankel's writings have an elegance and felicity of phrase rare in this field, it was as a teacher that he excelled. Countless people of many nationalities sat at his feet in the numerous forums that he taught. Frankel knew his own worth and did not suffer fools. But these traits were accompanied by a marvellous generosity of spirit, particularly to the younger generation, and an unquenchable love of teaching inseparable from this.
Honours came first from the Continent - from France, Germany, Austria and, later, Italy - which understood his message more readily than the United Kingdom which, although now a major oil-producer, believed its own rhetoric about 'free markets', while profiting from the price stability which Opec management provided. But two awards gave him particular pleasure: the CBE in 1981 from his adopted country; and the Cadman Medal, the oil industry's highest recognition, in 1973, which placed him among the leaders of the great oil companies who were its conventional recipients.
Petroleum Economics Limited, the immensely successful consultancy firm he founded, will continue as his tangible memorial. So too will the Institute of Petroleum's Paul Frankel Award, initiated in 1988 by his friends and admirers to celebrate his many contributions through the provision of a biennial postgraduate scholarship in a subject relevant to the industry. But, most importantly, he will live on in the deep affections of all those men and women who had the good fortune to know him.
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