<a href="http://youngpetro.org/2013/03/06/how-is-it-possible-to-produce-oil-from-sand/"><b>How is it possible to produce oil from sand?</b></a> <a href="http://youngpetro.org/2011/10/09/people-engineers-and-spe-members/"><b>People, Engineers and SPE Members</b></a> <a href="http://youngpetro.org/2012/12/19/if-i-were-a-prime-minister/"><b>If I Were a Prime Minister…</b></a> <a href="http://youngpetro.org/2012/12/26/polish-shales-delayed/"><b>Polish shales delayed?</b></a> <a href="http://youngpetro.org/2013/01/11/russia-continues-the-policy-of-states-companies-monopoly/"><b>Russia continues the policy of state companies’ monopoly</b></a>
 

The O&G Industry Downturn: What It Means For Recent Grads? And How To Survive It?

The O&G Industry Downturn: What It Means For Recent Grads? And How To Survive It?

It was June 2014 when the oil and gas industry started to experience a downward market. Oil prices fell sharply to around $70 per barrel by November 2014, and this marked an end to a four-year period of price stability above $100 per barrel. Besides the geopolitical and economic factors responsible for the drastic change in oil prices, the prominent factor for the crash of oil prices was the unbalance between supply and demand.

According to the December 2014 monthly update of the United States Energy Information Administration ( EIA ), there was an increase in supply of liquid fuels by 1.8 million B/D to 92 million B/ in 2014, whereas demand did not keep pace. The global demand was low due to high oil prices for too long and low economic activities. On the other hand, supply was up because of U.S. shale oil boom, and the return of Libya’s production. Decreased demand and increased supply directly leads to low oil prices.

It was expected that the Organization of the Petroleum Exporting Countries would play its conventional role of protecting the oil prices by reducing its quota to balance the supply and demand as it always did. However, what OPEC did was totally the opposite. OPEC decided to not cut production in a new strategy to protect its market-share. Consequently, the O&G industry was dealt a crushing blow. The crash in oil prices has led to many layoffs, spending cut backs, project deferrals, service price deflation, renegotiation and significant delays at major projects and this officially announces that the O&G industry is in a downturn.

What The Downturn Means For Recent Grads?

The crash in oil prices especially after November 2014 -when OPEC decided to stick to its market-share strategy- has led to many layoffs from both operating and service companies along with a slowdown in the hiring activities or completely putting a freeze on hiring. As a consequence, many O&G professionals have lost their jobs and fresh graduates are finding it extremely hard to secure a job in an industry they spent four years earning an entry ticket to.

The increase in the number of people seeking jobs -both due to the current layoffs that left many professionals unemployed and recent graduates- accompanied with few or no job postings from O&G companies has undoubtedly made 2014 a pivotal point where a transition in the market type from “candidate-driven market” to a “client-driven market” took place.

In a client-driven market where demand for jobs is much higher than what is being offered, the competition is extremely high and the possibilities of securing a job is much lower especially for recent graduates. Job applicants with experiences and job training are more preferred than recent graduates in such a market. This is due to the fact that the value they add to the company comes much faster than what fresh graduates do, and this is due to the longer time required to train fresh graduates.

Even in the case of fresh graduates job openings; in a client-driven market, O&G companies are at an advantage of having a chance to choose the best candidates with even less salary. This is due to the fact that in a client-driven market, many applicants compete over few job openings unlike in a candidate-driven market where prospective candidates are currently working, and there is a need for new workforce which gives an advantage for any applicant to get the job with less competition.

Low oil prices and its consequences on the hiring activities has also driven many petroleum related courses’ graduates to either divert into different industries -sometimes not even related to their field of study- or spend their time at home doing nothing other than killing time waiting for the market to recover. It is true that fresh graduates and professionals who lost their jobs due to the crash in oil prices are experiencing a bad time, but this is the price to keep the industry going and guarantee an even-keeled revenue stream and business sustainability.

How Can Recent Grads Survive The Downturn?

It is important to keep in mind that the oil and gas business is boom and bust by nature, this is not the first price bust in the O&G industry and definitely will not be the last. A similar downturn occurred in the late 1980s through the 1990s and the most recent downturn occurred in 2008. Downturns are harsh realities that can not be avoided as it is the nature of this business. What you can do as a recent graduate who is passionate about this industry is to navigate the industry during the downturn in the following ways:

1- Keep in mind that it will get worse before it gets better as the current events in 2015 are indicating signs of no price recovery such as the continuous increase in production from Iraq, Iran and Libya and few other countries, China’s dramatic slowdown, refining maintenance season which is about to begin soon, Greek crisis and lifting sanctions from Iran. Knowing that things will get worse will ignite the fire within you to take the following advice seriously and work hard.

2- Get informed about the current events in the oil and gas industry. Know where layoffs happened, which sectors are more affected and which are still having employment activities and apply for them. Besides, knowing where new projects are taking place will help you to increase your possibilities of getting a job by applying for jobs in response to the need.

3- Diversify. This means keeping your petroleum engineering skills broad. It doesn’t matter what your focus is or what your final year project was, you should learn about other engineering disciplines, and read more. It also means cultivating new skills that will surely set you apart from the rest of your peers.

4- Widen your connections. This is a very crucial point not only for getting a job, but also for your career development and success. Create a LinkedIn profile if you do not have one, make it professional, start adding people and network with them. Attend conferences and events related to your industry. All those will help you widen your network, which comes with an advantage of increasing opportunities.

5- Volunteering. Volunteering during a downturn has career benefits. Apart from enhancing your industry network which surely can help you get a job, it develops your leadership skills, provides a résumé boost, and it gives you access to technical information. Never underestimate the outcomes of any volunteer activity even if it is not related to your field of study. Just go for it, and learn. Chances are, it will pay you back later.

6- Get a job that will help you be independent and support you to make a living. It does not matter where as long as you work, and make money. And if you can afford to further your education, do so. This adds value and helps increase your chances of getting a job later especially if you further your study in business administration, finance and so on.

The downturn is going nowhere at least for the end of 2015, and it is your decision how to react to that. If the O&G industry is your passion, I trust you will fight and win the battle. But before that happens, a lot must be done, so start now.

Corrosion and it’s remedy

Corrosion and it’s remedy

In simple words corrosion is defined as ruination of material because of its reaction with environment. It should be made clear here that for corrosion material does not have to be metal only and this vast term is not restricted to metals alone. On the other hand ruination of wood, rubber and paint due to exposure to sunlight is also considered to be corrosion.
Stress Corrosion Cracking (S.C.C) happens when mechanical stresses occur in the presence of corrosive environment and this phenomenon can cause serious problems. It is common observation that corrosion is always detrimental but interesting fact is that in some cases corrosion is beneficial and desirable like while anodizing of aluminum used to obtain a protective corrosion product on the surface and uniform appearance.
Chemical machining is widely used in aircraft’s industry. In this process unmasked areas are subjected to acid treatment and excess metal is dissolved. This process is adopted in situations where parts are hard and difficult to machine. Analysis of corrosion in Oil & Gas industry is of prime importance because of two main reasons:
1. To maintain continued and extended production to avoid loss of revenue.
2. To avoid catastrophic failures of facilities and avoid irreparable loss of life.
To control corrosion many industries are spending several billion dollars so one can realize the devastation caused by this phenomenon. Corrosion can be classified as either Sour or Sweet depending upon environments. Usually sour corrosion is caused due to the presence of high sulphur contents and its compounds in oil and gas industry.
Most common corrodents are:
1. Acid gases
2. Brine
3. Aggressive soils
4. Anaerobic bacteria
To control corrosion following corrosion measures may be taken:
1. Chemical Inhibition
2. Chemical Control (removal of dissolved gas)
3. PH control
4. Oxygen Scavenging
5. Cathodic Protection
6. Thickness measurement (Ultrasonic thickness meter)
7. Control of physical factors (Shocks etc)
It is important to calculate cost effectiveness of any of corrosion control measures before applying it and this can be calculated only in case of proper monitoring, the effectiveness of corrosion control program can be judged only in case of its proper monitoring.
At the end in Oil and gas industry it is difficult to total elimination of corrosion one can feel comfortably satisfied if the rate of corrosion is retarded up to safe extend.

 

References:

http://www.npl.co.uk/upload/pdf/beginners_guide_to_corrosion.pdf

http://www.npl.co.uk/upload/pdf/basics_of_corrosion_control.pdf

http://www.ce.berkeley.edu/~paulmont/241/Corrosion.pdf

Dispelling Shale Myths

Dispelling Shale Myths

With UK offshore gas supplies declining and the UK becoming increasingly reliant upon gas imports, the establishment of a successful onshore oil and gas industry is now of growing importance.  Generating a sustainable UK shale industry could be the answer to such problems, providing not only energy security, but also boosting the UK economy through job creation and investment. In light of the impending 14th onshore licensing round ESGOS sat down with Ken Cronin, Chief Executive of UKOOG, to discuss the next steps for the UK shale industry.

Dispelling Shale Myths

The shale industry has long fallen victim to a host of misconceptions, with community concerns over safety continually serving as a stumbling block to the development of the sector. What steps do you feel need to be taken to ease community concerns about shale?

‘There have been a lot of unfounded myths put out there. The truth is that over 80% of our homes and industries are heated using gas, over 500,000 people are employed by the chemicals industry which uses gas as a raw material as the building block for products that are as varied as cosmetics, computers and medical equipment. By 2020 80% of that gas will come from outside the UK paying no tax and creating few jobs. We have a very good regulatory system and the industry has been reviewed by a number of independent bodies and all found the risks in a properly regulated are low. These are the messages we need to continue to communicate with local communities. That and the fact our industry has been operating safely for over 100 years. People are amazed when I say we have 250 operating wells in this country producing enough oil to power over a million family cars a year’.

14th Onshore Licensing Round set to Kick-start UK Shale Industry

Progress within the UK shale industry to date has to a large extent remained stagnant. However with the results of the 14th onshore licensing round imminent, forecasters are predicting a kick-start to UK operations. How many wells do you expect to be drilled during 2015-2016?

‘We have drilled 34 wells in the last two years albeit mainly conventional wells. 2014 was actually a better year than the previous 3. The number of future shale wells depends on a number of variables but I think we need to be thinking about 5 to 6 sites having activity by the end of 2016’.

Ensuring the positive impact of the 14th onshore licensing round also depends upon overcoming a number of other industry hurdles, particularly with regard to the planning process. What steps do you feel need to be taken to ensure that the 14th onshore licencing round is as productive as possible?

‘I think we need to see this as a nationally important resource as we did with the North Sea in the 70s. Planning and permitting needs to be made as efficient as possible and the overlaps between the two systems need to be eradicated. We also need to educate people why gas is so important not only to our energy security but also our economy’.

Emphasis now is also moving toward increasing private investment in the UK shale industry. Do you expect to see an increase in private investment to help fund shale operations?

‘We have already seen a lot of new investment in the last 18 months with new players such as Centrica, Total, GDF and Ineos coming in. As progress to proving the resources happens I expect to see more investment’.

Boosting the UK Economy

Kick-starting the UK shale industry also holds the potential to substantially boost the UK economy. With potential for job creation, increasing the level of skilled workers and growing UK trade and investment the shale industry could play a key role in redefining the UK economy. Do you feel the development of a successful shale gas industry will boost the UK economy?

‘Absolutely – we commissioned a study by EY last year that showed £33bn would need to be spent on the supply chain to create the first 100 sites and alongside that 64,000 jobs would be created’.

Successfully establishing a shale industry within the UK also has the potential to benefit a number of other sectors within the UK. What other industries do you feel can benefit economically from the development of a UK shale industry?

‘I think the chemical industry will benefit significantly from a secure source of feedstock without the recourse of having to buy imported gas. The UK supply chain and in particular SMEs will also benefit from supply chain activities from sand production through to waste treatment facilities’.

With the UK shale industry witnessing an increasing trend toward growth and progress, what are UKOOG’s plans over the course of the next 12 months?

‘To continue to promote the industry with a strong focus on helping the industry move to exploratory drilling to allow us to ascertain the true extent of the gas under our feet’.

Ken Cronin will be discussing the development of the UK shale industry and its role in the UK economy further at the European Shale Gas & Oil Summit taking place on the 15th-16th October 2015.

For further details visit the summit website www.esgos.eu

Image source: carbonbrief.org