the way ahead vol. 8 issue 2 year 2012
TRANSCRIPT
An Official Publication of The Society of Petroleum Engineers • www.spe.org
TULLOW OIL CEO AIDAN HEAVEY | GUIDE TO JAKARTA | SURVEY ON DUAL-CAREER COUPLES
The Magazine by and for Young Professionals in Oil and Gas VOL. 8 // ISSUE 2 // 2012
INDEPENDENTS
RISE TO POWER
Drilling and CompletionsHealth, Safety and EnvironmentProductionReservoirGeosciencesSurface EngineeringFinanceHuman ResourcesInformation ManagementSupplyOperationsLand
Shenzi, Gulf of Mexico
Vol. 8 // No. 2 // 2012 1
Printed in USA, Copyright 2012, Society of Petroleum Engineers.
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ContentsVOL. 8 // ISSUE 2 // 2012
2 What’s AheadPerspective from TWA’s editor.
3 TWA InterAct Letters to the editor sent via email and social media.
4 TWA InterviewConversation with Aidan Heavey, chief executive offi cer of independent Tullow Oil.
6 HR DiscussionChevron’s Eve Sprunt and Susan Howes discuss results of an SPE survey on dual-career couples.
10 Tech 101Well test analysis in practice.
15 Pillars of the Industry Harry Simons of Hess Corporation ponders: Who provides the better career—independents or majors?
17 YPCC InterviewsInterviews with three award-winning YPs.
18 Soft Skills Results of a survey that examines job satisfaction in the oil and gas industry.
19 A YP’s Guide to...What it is like to live and work in Jakarta, Indonesia.
22 SPE 101An overview of the various types of forums, conferences, workshops, and training sessions SPE provides.
23 AcademiaExplore the win-win partnership that exists between academia and independents.
25 Technical LeadersAn interview with Jon Ferrier of Maersk Oil and Chris Widell of Anadarko gives insight into independents.
28 Discover a CareerOpportunities in petroleum reservoir simulation.
30 YP NewsflashCoverage of young professionals’ events around the globe.
31 YPCC AwardsNumber of Outstanding Section YP Committee Award categories was increased and number of entries received shot up.
32 Your Best ShotReaders submit their best on-the-job photos.
An Official Publication of The Society of Petroleum Engineers • www.spe.org
2
hat exactly defi nes independent operators in the oil and gas industry? TWA staff members gave many
suggestions about how to answer this question. Most thought they are companies that lack something, such as integrated upstream and downstream operations, market capitalization, or total booked reserves. One good analog is our own magazine, The Way Ahead, where we consider ourselves the "independent" of oil and gas publications. We are much smaller than our “major” sister SPE publication, the Journal of Petroleum Technology. We target readers who are in the early stages of their careers and who might be able to relate more to our content. And we make the most out of the limited amount of resources we have at our disposal.
Personally, I have always been curious about the complementary value of the independents. I was born and grew up in a developing country in South America, Venezuela. My country is blessed with one of the biggest hydrocarbon reserves in the world. However, despite the immense amount of resources, our oil and gas industry has always been dominated by the majors and the country’s national oil company (NOC). I have always believed that the oil industry in my country is missing a critical element due to its lack of independent companies, which excel at targeting overlooked hydrocarbon exploitation opportunities and making them profi table when larger companies cannot. In this context, the independents are the perfect complement to majors and NOCs.
In the global oil and gas industry, the independents have thrived by fulfi lling this complementary role to the maximum. Their main business has developed because they are quick and fl exible enough to take advantage of opportunities. This is why they are leaders in the unconventional resources boom and also why they are applying innovative and effective enhanced oil recovery and production technologies to maximize recovery factors in brownfi elds, which are considered marginal by majors and NOCs.
But independents fulfi ll much more than just a complementary role. They also have an entrepreneurial spirit that entices a lot of workers willing to play the game of risk and reward. For those dreaming of starting their own business, independent companies offer an unmatched level of empowerment and ownership, while providing the individual with the experience and skills required to potentially lead them in the pursuit of their dreams. This is what I like to call the reproductive nature of independent
companies, which is the potential capacity to produce more oil and gas companies by giving their workforce the exposure, business acumen, and confi dence required for becoming oil and gas entrepreneurs. From a societal perspective, this is a key aspect of organic growth and development.
For this issue, we have focused solely on oil and gas operators when referring to independents. The truth is that, in the service sector, the contrast between majors and independents is even more evident. The majors of the service industry are essentially four big companies that dominate the sector, while a huge number of smaller companies fi ght every day to grow their business and challenge the majors on specifi c services. The most important contribution of independent service companies is their innovation and ingenuity.
In recent years, there are many examples of entrepreneurial service companies that have managed to offer unique services and wind up dominating their product line and challenging the majors for market share and prestige. For example, in the multizone fracturing packer systems sector, a small service company was able to produce the technology required for fracturing unconventional gas wells and is now considered the market leader, enabler, and pioneer for tapping hydrocarbons in tight formations. By leading the way, this company was able to beat strong competition from the major service companies and even avoid being taken over, mainly due to its solid foundation.
In this issue of TWA, we explore the world of the independent oil and gas companies. We got perspectives from chief executive offi cers (CEOs), staff, and academics on the pros and cons of working and developing a career with these companies. I especially recommend the interview with Aidan Heavey, CEO of Tullow Oil. I hope you read between the lines and appreciate the honesty and openness of his answers. This is just proof that independents are truly about cutting to the chase, maximizing opportunities, and using innovation to remain competitive. It does not always work out as planned, and success is not guaranteed; but, that sense of adventure is exactly what many young professionals actively seek—and independents can deliver. TWA
Is TWA meeting your expectations? We challenge you to send us your feedback. (Being constructive is not a requirement; we have thick skin!) Write us at [email protected] or contact me at [email protected].
Max Medina
Editor-in-Chief
The Way Ahead
What’s Ahead– From the Editor of TWA
Independents: Who Art Thou?
W
3Vol. 8 // No. 2 // 2012
TWA InterAct
FROM THE INBOX
Re: Unconventional Resources: The New Conventional?
It seems one reader connected with our call for YPs to step up and conquer the challenges of the unconventionals revolution that is widespread across our industry. Deo Mahase said, “We are at the cusp of a revolution in the oil and gas industry, one brought about by the attrition of an aging workforce. This is further challenged by the increasing infl uence of regulators and environmental groups. There is a great opportunity for growth, innovation, and ingenuity but with caution and great responsibility. With the loss of this aging and experienced workforce, we are being challenged in many dimensions. We, as YPs, have the responsibility to produce safe, pragmatic, and innovative solutions. ‘Doing’ should always be preceded by ‘thinking,’ and we should continually strive to evaluate and defi ne what it is we are attempting to solve. Due diligence and a responsible approach are imperative to ensure the continued growth and development of our industry. Stay hungry. Stay foolish. Keep learning!” So, let’s think and act with excellence and innovation!
FROM THE SOCIAL NETWORK
Re: Meeting Tomorrow’s Energy Needs…Using insight from Kishore Mohanty’s article in our last issue (Vol. 8, No. 1), we posted a poll on Facebook and Twitter asking: “Which of the proposed technologies will have the best impact on our future?” We got more than 40 votes, and the results are given in Fig. 1.
It was somewhat surprising to see that our petroleum engineers are not totally buying the new trends and still believe we can increase recovery factors and squeeze our conventional oil plays to the last drop. On the other hand, carbon capture and sequestration (CCS) seems to be losing supporters and is not as trendy as it was a couple of years ago. Does this have to do with the forecast of increased use of cleaner energy sources, or with the feasibility and impact of CCS? If you have an answer, send us an email and we will share your thoughts in our next issue.
HANDS-ON YP WRITERS
From the Battlefi eld to the Oilfi eld:
Junior Military Offi cers and the
‘Great Crew Change’
One of The Way Ahead’s readers, Rob Jackson of Newfi eld Exploration (rjackson@newfi eld.com), submitted the following personal observations:
“The oil and gas industry is on the cusp of the largest experience gap ever in its history. Considering the well-documented experienced worker shortage, the future looks tenuous at best.
“To avert this crisis we need to hire not only suffi cient numbers to replace the soon-to-be-retirees but also people of suffi cient quality.
“Despite having limited oil and gas industry experience, junior military offi cers (JMOs) have the type of skill set and experience particularly suited to fi ll the industry’s requirements. [ JMOs are members of the military who earned a commission via graduation from a US military academy, a university or college Reserve Offi cer Training Corps (ROTC) program, or Offi cer Basic Course (OBC).]
“My experience is a good example of this. Within 3 months of graduating from the OBC, I deployed to Iraq on the fi rst of two year-long deployments. I didn’t have the luxury of an extended learning curve. I had to learn my equipment and my job and effectively lead my soldiers into combat on a compressed timeline. The military is fi lled with people who learn quickly and then perform at the highest levels while in high-stress environments.
“ExxonMobil, GE, Newfi eld Exploration, and Chesapeake (among others) have partnered with US JMO recruitment fi rms, such as Alliance International, Orion, Genesis Group, Cameron Brooks, Bradley Morris, and Lucas Group.
“However, according to the 2011 US Bureau of Labor Statistics’ report, only 1.2% of all Gulf War II era veterans are currently employed in the US within the mining, quarrying, and oil and gas extraction industries.
“Shale plays are one aspect of the industry needing an infl ux of workers—now in the US and emerging in countries looking to exploit their shale resources, such as China, Argentina, and Mexico. Foreign and local personnel currently working in the North American shale plays can acquire experience that could be useful globally. JMOs and prior enlisted military personnel exist in many countries and are largely overlooked as possible industry candidates.
“JMOs are generally mature workers, often with a technical education, very trainable, able to work well in a team environment, dedicated, ethical, and willing to do what is required to accomplish a mission. They are comfortable working in remote areas with little oversight or in more formal corporate capacities. I believe our industry is in need of people with such characteristics if we are to not only survive but excel throughout the coming ‘great crew change.’
“I ask you to please locate JMOs and include this largely ignored sector in your human resources recruiting strategy.”
Fig. 1—The results of the online poll asking which technology will have the greatest impact on our future.
Enhancedoil recovery
Unconventionalgas
Unconventionaloil
Deepwaterproduction
CO2sequestration
32%
22%
27%
14%
5%
4
TWA InterviewTWA Interview
Aidan Heavey graduated in 1973 from University College Dublin with a BComm degree and subsequently qualified as a chartered accountant in 1976. He started his career as an accountant with Blueskies Holidays, a subsidiary of Aer Lingus, and then moved to Tullow Engineering. He was a founding director and shareholder of Tullow Oil and has played a pivotal role in the the company’s development since its formation in 1985. Heavey has built an exceptional team within Tullow. Through his leadership and vision, the company has grown to its current international status as a leading independent oil and gas exploration and production (E&P) group. Tullow currently ranks in the top quartile of
the Financial Times Stock Exchange (FTSE) 100 with a market capitalization in excess of EUR 13 billion.Tullow has its headquarters in London but maintains an active E&P team at its Dublin office, which is
also the center for the company’s worldwide geophysical operations. The company currently has interestsin 22 countries across Africa, south Asia, Europe, and South America.
Heavey’s entrepreneurial skills were recognized in 2005 when he won the Ernst and Young Entrepreneur of the Year Award in Ireland. Under his stewardship, Tullow has placed a strong emphasis on corporate and social responsibility and environment, health, and safety. Tullow’s social programs foster and support long-term development and self-sustaining enterprise in local communities where the company operates.
Heavey is a director of Traidlinks, an Irish-based charity established to develop and promote enterpriseand diminish poverty in the developing world, particularly Africa.
Aidan Heavey
What was your first job in the oil and gas industry, and what were your first impressions of the industry when you began working in it? My fi rst job in the industry was starting up Tullow, which was very different from my previous jobs. The global aspect of the business, the opportunity to become involved in operations around the world, and the chance to meet fascinating people in doing so were the things that fi rst excited me about the industry.
What made you decide to start Tullow Oil? My background was not in engineering. I was an accountant before I decided upon a change of career. Back in the 1980s the oil industry grew fast before the oil price collapse. The North Sea was in full swing and many small oil companies were starting up in Ireland. It was similar to the dotcom boom during the late 1990s.Oil and gas seemed like an exciting industry, and setting up Tullow was the way for me to get involved.
In 1985, I spoke with a friend in London about exploration fi elds in Africa that big companies were abandoning because they were discovering gas rather than oil. One of these was a gas fi eld in Senegal discovered by SAP (Société Africaine de Pétrole). This particular fi eld was connected to a power station. Following negotiations with the Senegalese government, the lease was then granted to us and from there Tullow was born.
How have mentors impacted your career? Please mention the major milestones for Tullow Oil since it was founded.I’m afraid I never had a mentor, but there have been many milestones for the company.
Obtaining the lease in Senegal and proving to the authorities that we could operate the fi eld was a big achievement. During the early ’90s when commodity prices were very low it became a matter of survival for Tullow, which we managed well. Then in 2000 came a
big step change as BP sold off their gas interests in the North Sea. We bought some of these fi elds, which doubled our production overnight. This allowed us to hire more engineering staff, which in turn dramatically increased our cash fl ow.
Then in 2004, the acquisition of Energy Africa doubled our business again. This was a particularly noteworthy milestone as the acquisition brought with it an infl ux of exploration interests into the company, transforming us from a strictly production company to an E&P company.
From an investor perspective, fi nding the Jubilee fi eld in Ghana was a dramatic change, as it was our fi rst deepwater well.
What have been the main drivers for Tullow Oil? How has the company evolved over the years?Tullow is different from other small E&P companies. Everything we do is long term, and, as such, our main focus is very much on our people. Oil and gas assets come and go, but our people will always be our real asset. We try to make sure
Chief Executive Officer, Tullow Oil
5Vol. 8 // No. 2 // 2012
every part of the business is the best-in-class.
Our mentality hasn’t really changed over the years. However, it is probably easier to attract the best people now. We have been the fastest growing oil company ever in the European market and everybody likes to be on a winning team. We are at a stage now wherein we have created our own peer group, somewhere between the independents and the majors.
Tullow Oil has been particularly successful in exploration and in delivering major projects. What have been the key factors behind your success?If you have a single person looking at a location, the risk is increased, so we always put big teams in place to select the best prospects. Once they have been identifi ed, we rank them and drill the top 10%. Preparation work is one key point; the second is that we invest heavily in everything we do.
We follow geology. We are very successful in Africa, and we are following the same trend to South America. We made a big discovery in French Guyana with the Zaedyus exploration well. You need the best team of engineers to drill and to produce a fi eld. We drilled Jubilee, and it was the fastest deepwater well drilled in Africa. It’s also worth noting that you cannot be the best explorer if you don’t have the best fi nance department to pay for that. Every single team has to be the best and this enhances the value of the business. If you get that right, you have a very good business.
Your company has grown dramatically, particularly in the last decade. What is next for Tullow Oil? Do you intend to become a major operator?Tullow is Tullow; we are not trying to be anybody else. All we want to do is to make the business better. You have to be honest—honest with staff and honest
with yourself. Regarding strategy, I have never read a strategy book and I think that predicting things is very diffi cult. This industry changes continuously. I try to sit down and ask: Is this company fundamentally better? Is every part of the business the best-in-class? By being the best-in-class you are able to provide value to shareholders. However, if you are very focused on a strategy, it can limit you. You need to free your mindset and ask: How good can this business be?
How is the current financial situation affecting Tullow Oil and other oil and gas independent operators?It hasn’t affected us. We managed to get USD 2 billion from banks and since then, with the success of Jubilee, we have secured banking facilities of USD 4.5 billion, all during the banking crisis.
Companies are struggling to recruit YPs and secure their loyalty to a company. What is Tullow Oil doing to address this? At the end of 2010, we had 900 people; by the end of 2011, we had over 1,500 people, and that fi gure has risen again this year. Our turnover is less than 1%, so we haven’t had problems retaining talent. We have now started initiatives to get local engineers into universities and scholarships in places where we operate. Our intention is to create our own staff with its own culture. If you look at Ghana, for example, our plan is to have our Ghana operation run entirely by Ghanaians, and we are getting there. We see that as the future.
People like a career path, and, in order to provide it, companies need to be there for the long term. Some independent oil companies tend to fi nd oil and then sell the business. The senior management makes a lot of money and the shareholders make a lot of money, but then the employees are left thinking: What are we going to do next? We don’t play that game. This is a long-term
business for us, and our shareholders realize that. We really see this as a business for life.
When you are recruiting someone to join your team, what qualities do you look for? What would make someone stand out to you? People stand out if they can work in a team. Honesty is very important. If you can honestly think about yourself and say, “I am good at this but I am bad at that,” then that’ll help you out. Nobody is good at everything, and the reason we have teams is to fi ll any gaps. I don’t like it when someone pretends to be good at something he or she is not. You have to be humble in the way you approach things. The right people ask if they do not know something.
Exploration is a good example. You have teams analyzing 400 prospects, and our team members get together and compare everybody else’s prospects. To pick the best ones, you need to be honest and modest. You do not need to be the smartest person in the world, but if you are a good team player, that is what counts.
It helped that I did not have a technical background when I started the business, so I have never told the geologist or the engineer how to do his or her job. I was not a good accountant, so there is no point in trying to tell accountants how to do their job either.
In a growing company like Tullow, how do you balance freedom and spontaneity in decision-making, with rigid processes?That is a big issue in every company. In our early days, we didn’t have many processes. As the business grew, it became clear that more processes were needed. These things build up very fast without most people realizing it. We allow people to challenge processes to ensure we aren’t tied into processes that are too restrictive or don’t make much sense. You want to get everybody thinking, not
Interview... Continued on page 14
6
HR Discussion
A survey of SPE’s membership conducted in May 2011 by the SPE Talent Council showed that dual-career couples comprise about half the petroleum engineering workforce (Sprunt and Howes 2011a, b). In many of those couples, each partner contributes between 40% and 60% of the household income. Situations that jeopardize the employment of one partner are a major fi nancial consideration. Two signifi cant challenges for dual-career couples are relocation and childrearing.
To better understand the challenges facing dual-career couples, in December 2011, the SPE Talent Council surveyed SPE members under age 45. A more detailed report of the survey is available in paper SPE 160928 (Sprunt and Howes 2012). The survey had a 5% response rate, down from the 12% response rate of the prior survey. Responses were received from 1,392 people, 31% of whom are female. The age distribution of those responding is
shown in Fig. 1. Of those responding, 76% were part of a dual-career couple. All but 10% of the women who responded considered themselves part of a dual-career couple, and 62% of them were married. In contrast, 30% of the men did not consider themselves part of a dual-career couple and only 52% were married. Of the dual-career-couple women in this survey, 53% contributed between 40% and 60% of the household income, whereas only 35% of the men were part of a relationship in which each partner contributed between 40% and 60% of the household income.
Not only was a higher percentage of female than male respondents part of a dual-career couple, but they took on that role earlier in life, with 43% of women in such a relationship having begun it before age 25, and 83% of these women having begun such a relationship by age 30. In contrast, only 25% of men, by age 25, considered themselves part
of a dual-career couple, with the fi gure increasing to 74% by age 30. Women tended to be younger than their partner, with 12% more than 10 years younger. In contrast, only 5% of male respondents were 10 years younger than their partner. Overall, 70% of female respondents were younger than their partner, but only 37% of the men were.
Consistent with the previous survey, women were much more likely to have a partner in the petroleum industry (women, 65%, and men, 43%). Also, a higher percentage of women than men (women, 28%, and men, 21%) had their partner working for the same employer as themselves.
These demographics indicate that the issues dual-career couples have impact a higher percentage of women for a greater percentage of their careers. Many so-called women’s issues may be more appropriately addressed as dual-career couple issues.
Whose Career Is More Important?Employers frequently have a human resources career development model that is based on the assumption of a single dominant breadwinner. As part of their career management process, they may ask employees known to be part of a dual-career couple, “Whose career is more important?”
In a separate December 2011 Talent Council survey on corporate policies for the management of dual-career couples, we received the following responses from managers as to why employers asked this question:
• “This is an appropriate question so that we know the couple’s desire.”
• “Always, one career has to lead and the other follow.”
• “It is a must for one of them to accept being the second one or relegated employee.”
Factors Impacting Dual-Career CouplesResults of the December 2011 Talent Council Survey Eve Sprunt and Susan Howes, Chevron
Eve Sprunt is the business development manager at Chevron Energy Technology. Her prior role was in corporate human resources as university partnership and recruitment manager. Previously, Sprunt was senior technical advisor at Chevron Technology Ventures; manager of the advanced energy focus area; venture capital executive; and technology coordinator, health, environment, and safety, managing the corporation’s global climate change policy. She worked for Mobil for 21 years in upstream new business development and in research and
development. Sprunt has a PhD in geophysics from Stanford University. She received her BS and MS degrees in Earth and planetary sciences from Massachusetts Institute of Technology. Sprunt served SPE as president for 2006, director during 1991–94, Distinguished Lecturer during 1998–99, senior technical editor for all SPE publications during 1993–96, and program committee chairperson of the SPE Annual Technical Conference and Exhibition in 1988. She was honored as a Distinguished Member in 2000 and received SPE’s highest recognition, honorary membership, in 2010. Sprunt holds 23 patents and has authored 28 technical articles, edited two books, and written more than 120 editorials for petroleum industry publications. She is a founder of the Society of Core Analysts.
7Vol. 8 // No. 2 // 2012
These comments indicate that the response “both careers are equally important” is incomprehensible to such managers.
The survey results indicate there is a generation gap between people in dual-career couples and management whose experience is that one career must be dominant. The majority of people in dual-career couples answered that both careers were currently equally important, with the percentage rising to over 80% when each person contributed between 40% and 60% of household income. Women are more likely to respond that way than men—86% compared with 80%. Men are more likely than women to say their career is more important, but the percentage of men responding that way dropped from 39% to 16%, when their female partner contributed between 40% and 60% of household income. In contrast, only 4% of women in nearly equally earning couples put their career fi rst. In the long run, 34% of men who were part of a couple of equal earners put their career fi rst, but only 5% of women in the same situation did so. Employers who ask this question for career development purposes will risk systematically discriminating against female employees.
Women with children are twice as likely as their male counterparts (18% compared with 9%) to be asked by their employer, “Whose career is more important?” People with children who work for the same employer as their partner are more than twice as likely to be asked as people who work for different employers (29% compared with 14%). The bias regarding who gets asked the question, combined with the fact that women tend to respond that both careers are equally important, increases the likelihood that women—especially women with children—will not receive equal career development opportunities.
RelocationThe perception of whose career is more important plays a signifi cant role in decisions about relocation. Not only are women more likely to consider both careers equally important, but they are more likely to refuse a transfer that would damage their partner’s career.
Looking just at respondents who said they considered both careers equally important and who were part of a couple in which each partner contributes between 40% and 60% of the income, 82% of the women responded that they would refuse a transfer if their partner could not work, vs. 59% of the men.
The survey asked both what would motivate people to relocate and what would stop them from relocating. The top-ranked motivator for men and women, both dual-career and single-career, was to gain valuable experience—69% or higher in all categories. The top motivators for dual-career men, single
men, and single women were the same. However, for dual-career women, “if the move was to a location where my partner can fi nd work” was the second-ranked motivator, rating 62%. Only a very small percentage of women and men, 3% or less, said they would not relocate under any circumstance.
A low percentage of people (13% women, 17% men) said their employer did a good job of providing employment assistance for an accompanying partner. Employment for the partner is a top priority for most dual-career-couple women. However, only 24% of the dual-career-couple women working for
Susan Howes is reservoir management consultant in the reservoir management framework and standards group at Chevron. Previously, she served as manager of the Horizons Program, Chevron’s Technical Competency Development program. Howes is formerly learning and organizational development manager at Anadarko. Her 29-year career includes various engineering assignments in Denver and Houston, including responsibilities in reservoir management, recruiting, and career development for engineers; managing
acquisition and divestment projects; economic evaluation; reservoir studies; and simulation of conventional and unconventional reservoirs. Howes holds a BS in petroleum engineering from the University of Texas (UT), and is the team lead for UT petroleum engineering and drilling recruiting at Chevron. She is a registered professional engineer in Texas and a registered HR professional. Howes serves on the SPE Soft Skills Council. She was the 2010 chair of the SPE Talent Council and served on the SPE International Board of Directors as regional director for the Gulf Coast Region and chair of the membership board committee. Howes is a past chair of the SPE Gulf Coast Section. She received the 1997 SPE Young Member Outstanding Service Award, was named a Distinguished Member of SPE in 2003, and received the 2005 SPE Distinguished Service Award. Howes is president of the Chevron Women’s Network.
Fig. 1—Age distribution of survey respondents.
100
150
200
250
300
ber o
f Res
pons
es0
50
20 to 24 25 to 29 30 to 34 35 to 39 40 to 44N
umb
Age Range
Women
Men
8
HR Discussion
consulting companies, 18% for service companies, 14% for independent oil companies, and 12% for international oil companies said their employers did this well. More women responding to the survey worked for international oil companies (33%), service companies
(25%), and independent oil companies (22%), than other types of employers. So this is a major gap.
ChildrenSlightly more than half of those responding had children (57% of the
women and 51% of the men). About half had their fi rst child when they were over 30 years old and their careers were well established.
Laws on parental leave differ by country. According to Wikipedia (2012), “Only four countries have no national law mandating paid time off for new parents: Liberia, Papua New Guinea, Swaziland, and the United States.” People from 79 countries responded to the survey. The fi ve countries with the greatest number of respondents were the United States (393, 30%), Canada (104, 8%), the United Kingdom (78, 6%), Australia (57, 4%), and Norway (53, 4%). Respondents from the remaining 74 countries comprised 47% of the total.
Of countries with a signifi cant upstream petroleum industry, Norway is recognized as having the most generous parental leave policies. Thus, the US and Norway represent extremes among countries with established upstream petroleum industries regarding government policy on parental leave. We compared survey responses on leave taken by US and Norwegian citizens with those from the rest of the world (Figs. 2
and 3).
Survey responses show that Norwegian women take much longer maternity leaves than American women (Fig. 2). In the United States, maternity leave is often legally characterized as sick leave and only covers the time the woman is considered physically disabled from childbirth. The aggregate pattern for women with other citizenships is quite different than the pattern for the US or Norway. In future studies, it would be interesting to see if there is a correlation between retention of women in the petroleum industry and length of maternity leave.
Paternity leave is an emerging concept. About 40% of men take no paternity leave (Fig. 3), with Norwegians being an exception. Of those non-Norwegian men who take paternity leave, the vast majority take less than 2 weeks. In contrast with maternity leave, where US citizens take the least leave, male US citizens tend to take more paternity leave than other non-Norwegian citizens. It is possible that American men take more paternity leave because their
Fig. 3—Duration of initial paternity leave among survey respondents, comparing US citizens, Norwegian citizens, and citizens from all other countries.
Fig. 2—Duration of initial maternity leave among survey respondents, comparing US citizens, Norwegian citizens, and citizens from all other countries.
0%
10%
20%
30%
40%
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60%
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none 1 to 2 weeks
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27 to 52 weeks
1 to 2 years
>2 years
% T
akin
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at L
engt
h Le
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Dura�on of First Maternity Leave
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Norway Ci�zens
Rest of the World
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40%
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none 1 to 2 weeks
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>2 years
% T
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at L
engt
h Le
ave
Dura�on of First Paternity Leave
US Ci�zens
Norway Ci�zens
Rest of the World
9Vol. 8 // No. 2 // 2012
partner receives less support from extended family.
In future studies, it would be interesting to learn whether men who take paternity leave assume a greater share of child-rearing responsibility in the long run than men who do not. A greater burden for childcare has traditionally fallen on women, whether employed full time or not. It would be interesting to learn whether there is a correlation between paternity leave and retention of women in the workplace.
Work/Life BalanceWhen asked what their employer did well to support work/life balance, working parents, and dual careers, more respondents cited fl exible working hours and telecommuting than anything else (56%). Those who have more rigid work schedules and cannot telecommute want those options.
When mothers were asked for free-form comments on what their employer could do to make it easier for them to manage as a working parent, 34% asked for fl exible hours, 19% for telecommuting, 9% for part-time work, and 3% for 9/80 schedules. When fathers were asked, 28% want fl exible hours, 21% telecommuting, 2% 9/80 schedules, and 2% part-time work. Requests for 9/80 schedules may be relatively low because this type of schedule is already one of the most frequently available forms of fl exible time in the US, or possibly because respondents who work in countries where it is not commonly offered are not familiar with the term “9/80 schedule.” (The term denotes a schedule that allows employees who work a 9-hour day Monday through Thursday to take every other Friday off. The arrangement was fi rst offered in the US more than a decade ago to reduce traffi c congestion and has since become a very popular schedule option provided by many petroleum industry employers.) Competitive pressure to attract and retain workers will probably increase the availability of fl exible schedules and telecommuting.
While many companies offer fl exible schedules and telecommuting, some respondents feel pressure not to make
use of existing benefi ts. Overall, with no signifi cant difference between women and men, 13% said they encountered resistance from their manager within the last year when trying to use their company’s policies designed to promote work/life balance. A greater percentage, 20% of women and 15% of men, encountered negative feedback from colleagues for trying to make use of such policies.
A large fraction of respondents in their free-form comments also asked for on-site daycare (21% of women and 10% of men) or generic “childcare assistance” (4% of women and 11% of men). Overall, 25% of the women and 21% of the men addressed childcare in their open comments. Onsite childcare and other daycare assistance should be viewed as a dual-career-couple issue not as a women’s issue.
ConclusionsIn the future, a large fraction of the petroleum industry workforce will be female and will be part of a dual-career couple. The day-to-day struggles members of dual-career couples face are diffi cult for many managers from an older generation to appreciate. For more details documenting these conclusions, see paper SPE 160928 in SPE’s OnePetro database.
The challenges women face with relocation and childrearing should be handled by employers as dual-career-couple issues. However, that does not mean both genders necessarily have the same value systems or perspectives. Women place a much higher priority on protecting their partner’s career. This may change in time as more women assume an equal fi nancial role in family life. The differences between women and men tend to be reduced for couples making nearly equal contributions to household fi nances.
Companies that ask women in dual-career relationships, “Whose career takes precedence?” risk systematically discriminating against women, because women are much less likely than men to say their own career comes fi rst. Also, certain groups of women, such as women with children, are more likely to be asked this question and
suffer the consequences of responding truthfully. Women are more likely to advance if companies offer specifi c opportunities for women to consider and to provide better support for fi nding suitable employment for their accompanying partner.
Policies on relocation, fl exible hours, and telecommuting should be reviewed to determine whether more dual-career-friendly policies can be implemented. The issue is not how we have traditionally done business and acquired critical experiences and skills, but rather what must get done and how it can be done with a workforce that has different domestic responsibilities than the vanishing workforce previously dominated by single breadwinners. In the past, companies benefi tted from having employees with nonworking spouses, who served as a full-time domestic personal assistant. That fraction of the workforce is now rapidly shrinking.
Reframing workforce issues as dual-career-couple issues will help attract, retain, and promote women. As one female respondent observed, “As long as male colleagues do not take advantage of family benefi ts, it will be diffi cult for female workers to manage their family and compete with their male colleagues.” TWA
ReferencesSprunt, E. and Howes, S. 2011a. Results of
Dual-Career Couple Survey, J. Pet Tech, 63 (10): 60–62.
Sprunt, E. and Howes, S. 2011b. Dual-Career Couple Survey Results. Paper SPE 151971-MS. OnePetro. http://www.onepetro.org/mslib/app/Preview.do?paperNumber=SPE-151971-MS&societyCode=SPE
Sprunt, E. and Howes, S. 2012. Factors Impacting Dual-Career Couples. Results of December 2011 Talent Council Survey. Paper SPE 160928-MS. One Petro. http://www.onepetro.org/mslib/app/Preview.do?paperNumber=SPE-160928-MS&societyCode=SPE
Wikipedia. 2012. Parental Leave (2 May 2012 revision). http://en.wikipedia.org/wiki/Parental_leave. Wikipedia cites http://www.paidfamilyleave.org/pdf/PaidLeaveinStates.pdf.
10
Tech 101
Why Do We Test Wells?The main reason for testing an exploration well is to take a fl uid sample. Further reasons are to measure the initial pressure, estimate a minimum reservoir volume, evaluate the well permeability and skin effect, and identify heterogeneities and boundaries. Testing producing wells aims at verifying permeability and skin effect, identifying fl uid behavior, estimating the average reservoir pressure, confi rming heterogeneities and boundaries, and assessing hydraulic connectivity.
How Do We Test Wells?We create a step change in rate—for instance, by closing a fl owing well or an injection well (buildup or falloff, respectively); by opening a well previously shut in (drawdown); or by injecting in a well previously closed (injection). This rate change creates a change in pressure in the same well (exploration or production testing) or in a different well (interference testing). In layered reservoirs, there is also a change in the rates from each individual layer, which can be measured with a production logging tool (PLT).
A change in rate can be created at the surface by shutting or opening the master valve or at the bottom of the well with a special downhole shut-in device. Wellhead shut-in is commonly used in wells already in production, whereas bottomhole shut-in is standard practice after drilling [a drillstem test (DST)]. The way the rate signal is created is not important as far as well test analysis is concerned. The same interpretation
methods are used for production tests, DSTs, analysis of wireline formation tests, and now for testing while drilling. What is most important for analysis is the quality of the rate input signal—which must be of the proper shape and duration—and the quality of the measured pressure output signal.
How Do We Interpret Well Tests?We try to identify an interpretation model that relates the measured pressure change to the induced rate change and is consistent with other information about the well and reservoir. This is an inverse problem without a unique solution. Petroleum professionals are confronted with the inverse problem whenever they interpret data and model processes (for instance, in geophysical interpretation, in geological interpretation, in log interpretation,
and in the reservoir modeling aspect of reservoir simulation). The problem of nonuniqueness is well recognized in the oil industry and accounts for the increasing use of stochastic modeling techniques, which aim at providing alternative equiprobable representations of the reservoir to capture the uncertainty associated with predictions. Nonuniqueness decreases as the amount of information increases.
As illustrated in Fig. 1, there are two possible signals we can use to identify an interpretation model. One is the difference Δp=[p(Δt)−p(Δt =0)] between the pressure p(Δt) at an elapsed time Δt in a fl ow period and the pressure p(Δt =0) at the start of the fl ow period (a fl ow period is a period during which the rate is constant). This signal and its derivative with respect to the superposition time are plotted on a log-
Well Test Analysis in PracticeAlain C. Gringarten, Imperial College London
Alain C. Gringarten ([email protected]) holds the Chair of Petroleum Engineering at Imperial College London, where he is also director of the Centre for Petroleum Studies. Before joining Imperial in 1997, he held a variety of senior technical and management positions with Scientifi c Software-Intercomp; Schlumberger; and the French Geological Survey in Orléans, France. Gringarten’s research interests include fi ssured fl uid-bearing formations, shale gas, fractured wells, gas condensate and volatile oil reservoirs, high and low
enthalpy geothermal energy, hot dry rocks, and radioactive waste disposal. He is a recognized expert in well test analysis and received the Society of Petroleum Engineers (SPE) Formation Evaluation Award for 2001, the 2003 SPE John Franklin Carll Award, the 2005 SPE Cedric K. Ferguson certifi cate for the best technical paper published in 2004, and the North Sea SPE Regional Service Award for 2009. Gringarten was an SPE Distinguished Lecturer for 2003–04. He has published more than 90 technical papers and was responsible for many advances in well test interpretation. A member of SPE since 1969, he was elected a Distinguished Member in 2002 and an Honorary Member in 2009. Gringarten has chaired or organized many SPE Advanced Technology Workshops, and is currently a member of the following SPE International committees: R&D; Information and Management; Carll-Uren-Lester Awards; Honorary and Distinguished Members Selection Committee; and SPE PE Faculty Pipeline Award Committee; and was 2011 chair of the SPE Talent Council. He holds MS and PhD degrees in petroleum engineering from Stanford University and an engineering degree from École Centrale Paris, France.
This article contains highlights of paper SPE
102079 “From Straight Lines to Deconvolution:
The Evolution of the State of the Art in Well Test
Analysis,” SPEREE (Feb. 2008), 11-1, pp 41–62.
11Vol. 8 // No. 2 // 2012
log graph. In such a graph, various fl ow regimes (e.g., linear, bilinear, spherical, radial) exhibit distinctive shapes and occur at different times, and this is used to identify them (log-log pressure and derivative analysis). The existence of the fl ow regimes can be verifi ed on fl ow-regime-specialized graphs by plotting Δp=[p(Δt)−p(Δt =0)] vs. f (Δt) on a Cartesian graph (specialized analysis), where f is a fl ow-regime-specifi c
function. f (Δt) is equal to Δt for wellbore storage and pseudosteady-state fl ow, tΔ for linear fl ow, 1 tΔ for spherical fl ow, log(Δt) for radial fl ow, etc.
The other signal is [pi−p(Δt)], where
pi is the initial pressure (Fig. 2). Because
pi is usually not known, the signal is
actually p(Δt), to be plotted against a fl ow-regime-specifi c superposition time,
[(qi –qi –1)/(qn –1–qn )]f ( 1111
nnji−−==
Δtj +Δt)−f (Δt),∑ ∑on a Cartesian plot (Horner analysis).
f (Δt) is the same as for specialized analyses. In both specialized and Horner analyses, a straight line is obtained where the fl ow regime dominates and the straight-line slope and intercept provide the well and reservoir parameters that control this fl ow regime.
What Is a Well Test Interpretation Model?The interpretation model is made of the combination of the individual fl ow regime components that dominate the fl ow period at different times. The number of interpretation model components is limited to three types (Fig. 3), namely
• The basic dynamic behavior of the reservoir during middle times, which is usually the same for all the wells in a given reservoir
• Near-wellbore effects at early times resulting from the well completion that may vary from well to well or from test to test
• Boundary effects at late times, determined by the nature of the reservoir boundaries, which is the same for all the wells in a given reservoir, and by the distance from the well to these boundaries, which may differ from well to well
Although there are few possible interpretation model components, their
Fig. 1—Log-log and specialized analysis.
q1 qi qn–1
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=
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Fig. 2—Horner analysis.
12
Tech 101
combination can yield several thousand different interpretation models to match all observed well behavior. The challenge for the well test interpreter is to diagnose from the observed well behavior which components should be included in the interpretation model. A schematic of the complete interpretation process is shown in Fig. 4.
What Is the Difference Between the Various Interpretation Methods?The main difference between the available analysis techniques is their ability to diagnose and verify an interpretation model effi ciently. In this respect, the derivative log-log analysis method is much better than the log-log pressure analysis method. Both are signifi cantly better than straight-line-based techniques used in specialized and Horner analyses. Specifi cally, straight-line techniques, although simple to use, are poor at selecting the very straight lines on which they are to be
applied. And, once a straight line has been selected, there is no rule to indicate if it is indeed the correct one (i.e., the one corresponding to the fl ow regime being analyzed). This is why, when powerful personal computers became
available, the derivative approach superseded log-log pressure analysis, which before had superseded straight-line techniques. This does not mean that new techniques have eliminated previous ones. These are still used, but they are
Homogeneous
Heterogeneous
– 2-Porosity
– 2-Permeability
– Composite
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YES
Fig. 3—Components of the well test interpretation model.
Fig. 4—Interpretation model identifi cation process.
13Vol. 8 // No. 2 // 2012
integrated in a methodology that allows them to be applied correctly.
Pressure derivatives combine great diagnosis and verifi cation capabilities with the accuracy of straight-line methods. Derivative shapes for various fl ow regimes at early, middle, and late times in a fl ow period are distinctly different, which is not necessarily the case with pressure change. For instance, spherical fl ow is easy to identify on the derivative, whereas it is invisible on the pressure drop curve. The main drawback of derivatives, however, is that, contrary to
pressure data, they are not measured but must be calculated. A number of factors can affect the shape of the derivative curve and, therefore, mislead the interpreter. Some can be easily identifi ed: derivation algorithm, sampling frequency of the data acquisition, gauge resolution, time or pressure errors at the start of the period, erratic raw data points, or multiphase fl ow. Others are more diffi cult to see and may affect the analysis. These include end effects (if the last pressure in a fl ow period is too high or too low, the derivative shows an upward or downward
trend, which must not be confused with a boundary effect), phase redistribution in the wellbore, and a pressure trend in the reservoir. But the most impact by far comes from the rate history. Oversimplifying the fl ow-rate history can jeopardize the reliability of the pressure derivative as a diagnostic tool (this holds true also for Horner analysis).
What Is Well Test Deconvolution?Deconvolution transforms variable-rate pressure data into a constant-rate initial drawdown with a duration equal to the total duration of the test and directly yields the corresponding pressure derivative, normalized to a unit rate. This derivative is free from the distortions caused by the pressure-derivative calculation algorithm and from errors introduced by incomplete or truncated rate histories.
Deconvolution is not a new interpretation method but rather is a new tool to process pressure and rate data in order to increase the amount of data that can be analyzed with derivative, pressure, and straight-line analyses. The gain is clearly greater in long tests, such as with permanent downhole pressure gauges, in which the total test duration is one or two orders of magnitude greater than the duration of the longest fl ow period at constant rate. Deconvolution, however, is also useful in short tests such as DSTs because it gives access to a greater radius of investigation and enables differentiation between true test behavior and artifacts of the derivative calculation.
An example of deconvolution is shown in Fig. 5. The red curve in Fig. 5b is the deconvolved derivative obtained by deconvolution of the entire rate history shown in Fig. 5a. Its duration, equal to the total production time, is two orders of magnitude greater than the longest buildups, represented by discrete points in Fig. 5b. The shift between the deconvolved derivative and the buildup data in Fig. 5b is from the rate history before the respective buildups. In this particular example, the extended derivative showed contribution to production from a lower layer after 104
Fig. 5—Example of deconvolution.
Pre
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(a)
(b)
14
Tech 101
hours. This could not be seen from the longest buildups, limited to 103 hours.
Deconvolution actually blurs the difference between conventional well test and production-data analysis. During the course of many years, several methods have been proposed to analyze production data to extract all the information that is usually obtained from conventional well test analysis without the constraint of shutting in wells. These methods have been attempting to convert variable rate and pressure into variable pressure at constant rate or into variable rate at constant pressure. Examples are the decline curve analysis by use of material balance time, the reciprocal productivity index method, and the rate/time type curve. The aim of all these methods is achieved with deconvolution, which produces much cleaner transformed data and much better results when estimating permeability and distances to boundaries.
What’s Next?Improvements in well test analysis will essentially come from three areas: richer signals (i.e., those containing more information), better interpretation techniques (providing signifi cant improvements in the identifi cation and validation of the interpretation model), and more-complex models that represent the geology better. Reservoir geology
is very complex, whereas well test interpretation models are rather simple. Some of the geological complexity can be seen and quantifi ed from well test analysis with more-complex interpretation models that represent geological bodies more closely. For instance, vertical permeability and meander information in a fl uvial meandering channel can be found from well test data in the transition between radial fl ow in middle times and channel fl ow at late times. The corresponding data are ignored when the analysis is performed with the usual simple interpretation models.
Efforts to reduce costs and environmental impact are also likely to impose additional changes. Well testing in exploration and appraisal wells has become increasingly unpopular in recent years. Reasons include cost, safety, and environmental impact. Well testing also has become rare in production wells because of the potential revenue loss during buildups. Whether suitable alternatives can be found is the subject of regular debate. Alternatives to DSTs include wireline formation tests and mini-DSTs for sampling, permeability, and initial reservoir pressure; core and log analyses for permeability; and geology, seismic analysis, and geochemistry for reservoir heterogeneities, boundaries, and fl uid contacts. However, there is no
suitable well-testing replacement for fi nding skin (well damage), effective permeability, and hydraulic connectivity throughout large reservoir volumes and obtaining the large fl uid samples required for sizing surface processing facilities or for determining the quality of the fl uids from a commercial viewpoint. Production tests, on the other hand, tend to be replaced by continuous recording with permanent pressure and rate gauges in production wells. These data are particularly well suited for analysis with deconvolution.
ConclusionsWell test analysis has come a long way since the 1950s when the interpretation methods on the basis of straight lines gave unreliable results. We now have a methodology that provides repeatability and techniques with derivatives and deconvolution that enable a high level of confi dence in interpretation results.
It can be safely predicted that the importance of well test analysis in reservoir characterization will continue to increase as new tools such as permanent downhole pressure gauges and downhole fl owmeters become more widely used and as the scale relationship with the interpretation of other data from geophysics, geology, and petrophysics becomes better understood. TWA
Interview... Continued from page 5
simply looking at the next step they have to follow to get from A to B. I challenge processes all the time.
What is the main competitive advantage of independent-based oil companies vs. the majors?The majors are very different. We only compete with the majors’ E&P divisions. Their E&P divisions are small parts of huge organizations with a lot of bureaucracy. It is very diffi cult for them to compete with us. We are a small organization based on what we do. They cannot move at the pace we do. There is no way they could have found the fi elds we have in the last few years because
they would not allow their exploration teams to work in such a free-fl owing way. However, they are our ideal partners. They have many things we do not have, including massive fi nancial clout.
Free time is often scarce in a career like yours. How do you keep a good work and family life balance? Do you have any advice for YPs?Easy! Family comes fi rst. You have to balance your personal life with your work life. I would never sacrifi ce my family for my business. Once you do that, you do not have a clear head. You need to have people who want to come to the offi ce but are also happy to go back home. I
sometimes send people home from the offi ce if I think they are working too late. Life is very short. Do not stick your head in the books all the time. You have to enjoy yourself. You do not want to get to the age of 60 and think: What I have done with my life?
Have you had professional interaction with SPE in the past? Has your workforce had the opportunity to leverage company activities with SPE expertise?Personally, I haven’t, but I know that our professionals here have had a lot of interaction with SPE and they use it on a regular basis. TWA
15Vol. 8 // No. 2 // 2012
Pillars of the Industry
have spent at least half my career working for independent oil and
gas companies. For the other half, I was contracted to the majors. Looking back, I can’t say I wish I had done things differently; it seems a healthy balance. But is there benefi t in focusing on one group of companies over another? Would it really make much of a difference at the end of the day? The answer—if there is one—is not simple.
I did not set out with any grand plan when I embarked on my career. There has always been an undoubted attraction to working with companies as readily identifi able as the Shells, BPs, or ExxonMobils of the world—each a signifi cant and important company on a global scale. Had I planned decades into the future with an insistence that I work for any one company, major or independent, my plan would probably have been shot to pieces by now anyway; so much has changed in the industry since the early 1990s. Being adaptable and ready to try different things is an advantage in today’s climate. I’m not sure anyone can afford to be too set in their ways and discount one company over another anymore.
If you are new to the industry, it takes some time to realize how many opportunities and potential employers there are in the sector. The niche players, the partners, and the start-ups create an incredibly diverse industry, a diversity that is ignored at one’s peril. Times are tough, and new resources (such as unconventionals) are coming into play, with employers needing to develop the skill sets to access them. Understanding your work preference and how you like to be involved with a project may eventually push you in one direction or another as you decide and recognize what sort of company you wish to work for—big, small, new, or well-established. It pays to research and be aware of what’s going
on around you in the industry: Who is doing what and where? How different might your next opportunity be? Do you enjoy being a generalist, stepping away from your chosen fi eld, or do you prefer a purely technical role, working the numbers?
Successful small companies have a healthy habit of growing larger and need to adapt their management structure and reporting to suit that growth. Independents, particularly smaller companies, often have less-hierarchical organizations—fewer tiers of management and more empowerment of the employees. Empowerment, or an employee’s ability to make decisions in and potentially for the company, should bring the employee closer to the day-to-day business; but, this is not for everyone.
Process, procedure, and the maturing of an organization tend to be the thorns in the side of (particularly midsize) independents still craving the freedoms they once had as smaller companies. Signifi cant energy is spent on getting the correct governance in place, and this can be a distraction from day-to-day work. Could you work in an environment where you regularly have to consider developing business process, or, as in many majors, can you take governance for granted as something you just do? There is a reasonable balance in making sure the right decisions are made and the correct level of governance exists; but, “reasonable” is tricky to measure, and companies, notably independents, struggle from time to time as they develop improved governance.
It would be wrong to suggest that size (or governance, process, and procedure) always brings inertia and drag on an organization, as many might believe. The majors and large independents are not always unable to act or react quickly. Size may bring an ability to deploy signifi cant
resources to solve problems quickly, effectively, and effi ciently (as we’ve seen recently in an extreme case in the Gulf of Mexico), while leaving the smaller independents struggling to keep up, with fewer people to do the extraordinary work the business sometimes requires.
The Independent Spirit I have two quick questions for you:
1. Do you believe your company is interested in (a) welcoming ideas on how the business could be improved or (b) pushing ideas from the top down?
2. Do you think a company’s employees are more likely to (a) follow the direction of leaders without challenging them or (b) challenge the status quo with diverse perspectives?
Which answers do you fi nd more appealing? A quick look at responses to these questions indicates the vast majority of respondents (about 75%) answered (a) for the fi rst question and (b) for the second. Respondents liked working for a company that welcomed ideas on how the business could be improved and wanted to be able to challenge the status quo with diverse perspectives.
Clearly, these employees believe they should have the ability to challenge why they’re doing what they’re doing. It doesn’t mean they can do what they want, but it does mean they can have a serious conversation about how they achieve the necessary goals.
“Challenge and be challenged” is sometimes easier said than done and can push a business into uncomfortable conversations. It takes a spirited company and spirited individuals to want to do this.
While there are certainly independently spirited individuals working for the majors, the really spirited companies—those that adapt and change the way they do business rapidly and
Independents vs. Majors: Who Provides the Better Career?Harry Simons, Hess
I
16
Pillars of the Industry
effectively—seem largely to be the independents. To be involved in these sorts of changes and adaptations can be incredibly exciting (and sometimes nerve-racking).
The questions, in case you had not worked it out, came from an employee questionnaire at an independent organization where “challenge and be challenged” is typical of how they do business.
Training and DevelopmentThe focus given to training and development has increased signifi cantly at independent companies over the years. For some time, the majors have provided the benchmark in training, and, while they undoubtedly will continue to lead the way, the gap across the industry is narrowing. A résumé still stands out if it includes a major graduate training record; but, because the independents have upped their game, the impact has become less signifi cant. Experience is still key, regardless of whom you have worked for. Be prepared to drive your own development, particularly once you are out of a graduate training program; you shouldn’t expect anyone else to do it for you, particularly in an organization trying to keep headcount lean.
Independent organizations are often willing to give you a chance to broaden your knowledge base across job families—perhaps by a move from reservoir engineering to business planning or well or commercial operations. However, recognize that a small organization may not be able to offer you as many different roles as an employer of hundreds of people and it is possible to run out of room to develop. In a small organization, you may eventually need to seek alternative opportunities elsewhere (which is human resources talk for leaving to work for another company).
Business OverviewA number of colleagues working within independents mention how much more involved and aware of the business they are than they had been at previous (sometimes major) companies. I’m sure this has something to do with the fact that
people in my peer group are all 15 to 25 years into our careers and basic business principles get beaten into you in the end, whether you like it or not. However, I still come across the odd engineer who tends to look slightly blank when you ask simply, “Will it make money?” Aren’t we here to make the business profi table?
For those who have grasped the basic principles, they enjoy seeing why the detail they focus on is important to the bigger business decision. Conversations with colleagues working for the majors suggest that the business impact isn’t something they routinely have to consider and the expectation is that it should be left to the business advisors. Being aware of the bigger picture won’t suit everyone; some people want to focus on a model day in and day out. Working for an independent, there’s a fair chance you won’t be asked to work in isolation from the other functions or groups and that your input will actively be sought outside your core discipline. You gain the potential to infl uence signifi cant decisions that can make, or potentially break, a project.
The independents tend to be involved with smaller assets—certainly some of which are immaterial to the majors. The development of these small fi elds presents an opportunity to be involved with cradle-to-grave developments, perhaps spanning less than 5 years, where you will see more reservoir, operational, and commercial decision processes (asset management) than you
would working on endless data collection analysis (DCA) on a 30-year fi eld (not that 30 years of DCA is a bad thing; it pays the mortgage). Increasingly, the majors are moving out of the mature basins, replaced by independent companies applying new and advanced technologies to recover remaining reserves and resources—an excellent training ground to develop skills at the cutting edge of the technological envelope as fi eld life is prolonged and aging infrastructure is managed.
Final ThoughtsExperience, as they say, is everything, and gaining relevant exposure, regardless of whom it is with, will always be looked upon favorably. The majors do not have a monopoly on great opportunities, and independents don’t have all the answers to eternal happiness in your career. If you are currently with a major and looking for a change, working with an independent can prove to be a breath of fresh air. Company size is not necessarily an issue, but how it behaves and looks after its people is. Consider where you think you and the company will be in 5 years and if you would be comfortable working in that environment. An independent, particularly a smaller one, will expect you to look outside your pure discipline and involve yourself with the business. Are you really up to this challenge? Or do you still think your career needs to be with a major? TWA
Harry Simons is the country manager for Algeria for Hess Corporation. He joined Hess in 2007 as business advisor for north Africa and Europe and managed the Hess joint venture operated and nonoperated assets in the UK. Simons has worked a wide variety of exploration, development, and production projects in Europe, Russia, and north Africa. Before working for Hess, Simons worked for Burlington Resources as planning manager for Algeria, Egypt, Holland, and the UK. Joining
Burlington as operations engineer, he was heavily involved in drilling and well operations throughout the portfolio but notably in Algeria (Berkine basin) and the UK. Simons holds a BS degree in geology from Kingston University in London. After earning his degree, he joined the oil industry in 1994 to work offshore as a geologist and engineer. He is a long-standing member of SPE and a fellow of the Geological Society in the UK.
17Vol. 8 // No. 2 // 2012
YPCC Interviews
How long have you been an SPE member? Are the YPs in your section active? Do you participate in YP events?I joined SPE in 2002, when I was a master’s degree student at Delft University of Technology in the Netherlands. Yes, the Netherlands’ YP section is active and I sometimes attend
their activities, the most recent being the YP Petro Pub Quiz mid-August 2011.
How many papers have you authored? What was the most challenging aspect of writing them?I have written six papers (including four SPE papers). The fi rst challenge
was starting to write a paper. It was sometimes diffi cult to determine if the available research was enough to justify a lengthy and developed paper. However, from my experience, writing while you’re conducting a research project helps to develop fi rmer arguments and to notice the missing parts along the way. Another challenge was determining how to conclude the paper. The diffi culty was to draw conclusions that are not only properly supported by the body of the paper but also consistent with endorsed reference papers. The remedy, I think, is a broad literature review and then a thorough reading of the paper before writing any conclusions.
Which do you think is the most crucial paper you’ve authored?The SPE Journal paper titled “Control-Relevant Upscaling” (SPE J. 15 [2] 471–479), the paper responsible for my winning the Ferguson Medal, dominated my PhD research as well as my PhD dissertation.
How long have you been an SPE member? I have been a member of the Society of Petroleum Engineers since 2001.
Are the YPs in your section active? The YPs in my section are very active, as indicated by the number of awards our YPs received this year.
Do you participate in YP events? I always participate in YP events, as they end up being fun, learning experiences every time.
Which activities have you initiated? Actually, I started up YP activity in our section and during 2006–07 was the fi rst YP vice chairman for the SPE Saudi Arabia Section. Since then, I have initiated a number of activities, including fi eld trips, knowledge sharing sessions, local chapter support programs, and the YP Annual Technical Symposium.
How has the focus on YPs helped the YPs in your section?It started and accelerated the growth of YP activities in our section, while increasing awareness of YP capabilities among our SPE community in general.
What differentiates you from other YPs who competed to receive this award?It is very hard to tell not knowing the other nominees and their credentials. However, I believe offi cially starting YP activities in our section, with YPs as a recognized SPE community, was a milestone my accomplishments represent that deserved to be acknowledged. Taking the fi rst step is always the most diffi cult part of the journey.
How has SPE helped you in your professional life?I joined SPE with a BS degree in chemical engineering and came to realize how interesting the petroleum engineering discipline and industry are. SPE was the seed for me to pursue my graduate studies in petroleum engineering. SPE provided me with venues—physical and electronic—for sharing knowledge and enhancing my technical abilities, while networking on an international level and sharpening my soft skills. All in all, SPE helped me determine and shape my career path the way it is today.
S. Ali Vakili-Ghahani, 32, reservoir engineer at SGS Horizon BV in The Hague, Netherlands, received the 2011 Cedric K. Ferguson Young Technical Author Medal in recognition of professional achievement in petroleum engineering by an SPE member 35 or younger. The medal is presented for the paper written by an SPE member age 35 or under at the time the paper was peer approved. Previously, he was a postdoctoral researcher on reservoir systems and control at Delft University of Technology (DUT), Netherlands. Before
joining DUT in 2006, he was a reservoir engineer with NIOC in Tehran for about 2 years. His main work experience is in dynamic reservoir modeling and field development projects. He was also involved in theoretical and numerical research on different elements of closed-loop reservoir management, including upscaling and model reduction, data assimilation (history matching), and optimization. The research results were published in several journals and conference proceedings. Vakili-Ghahani earned a BS degree in chemical engineering from Tehran University, Iran, and MS and PhD degrees in petroleum engineering from DUT.
Faisal N. AlNughaimish, 33, offshore producing engineering supervisor at Saudi Aramco, received the 2011 Young Member Outstanding Service Award. He has supervised offshore producing engineering for the Safaniya offshore field. He has provided technical support to offshore facilities, plants and networks, and producing operations. AlNughaimish received a BS degree in chemical engineering cum laude from Arizona State University and an MS degree in petroleum engineering from Heriot-Watt University.
YPCC Interviews...Continued on page 21
Interviews with Award-Winning YPs
18
Soft Skills
Job Satisfaction in the Oil and Gas WorldAmarachukwu Okafor, Marathon, and Amir Soltani, Statoil
Whether you have a job, are looking for one, or are still a student, having a day at work that is both productive and enjoyable can be a challenge. For those involved in the fast-paced petroleum business, stresses and pressures are all around us—dealing with demanding work tasks, managing a social life, and taking care of a family. Without a doubt, our work impacts our life and vice versa. The extent of this effect is related to many factors, one of which the Soft Skills team focused on: job satisfaction. A Web-based survey was created that aimed to capture information on this factor straight from the source, from the oil and gas worker.
The questionnaire asked respondents to refl ect on their leaders and assess their jobs. It was emailed to a cross-section of individuals who were part of the TWA editorial team network. A breakdown of the responses with regard to company affi liation is shown in Fig. 1.
Are You One of Them?In a competitive and volatile oil and gas market, a company’s ability to hire talent and retain experienced employees is vital for its future. But the company’s future is not the only factor here. For oil and gas rookies, the decision of which company to work for was driven by who had the bigger piece of the pie per current and worldwide exposure and not necessarily by size in an absolute sense. This seems to align with the well-known industry dictum that the more exposure you can get in the fi rst 5 years, the better positioned and qualifi ed you are for future opportunities. Our survey showed that the majority of young professionals with less than 5 years’ experience were employed by major companies. Conversely, independents tended to engage experienced workers. For these veterans and more-experienced hires, their choice of working for independents
was driven by long-term career plans more than anything else.
Experienced or not, employees’ trust in their organizations’ leadership is key to their commitment. An organization’s communication strategy and philosophy with regard to its employees, extended audience, customers, and press defi nes its brand and highlights its value system.
Unfortunately, only about half the employees surveyed said they believed their corporate communication was honest. The message was clear: Many employees believe communications issued by their corporate organization is misleading. Nevertheless, most people are quite satisfi ed with their direct managers: Only 8% responded otherwise.
It was interesting to observe that, when asked whether they thought they had an impact on management’s decisions, which invariably affected her or his job, the respondents’ answers were even between yes and no. In fact,
47% of employees of major companies did not know if they had an impact on management decisions. This fi gure was less than 10% for those working for independents. Not surprisingly, employees of national oil companies (NOCs; typically quite strictly controlled by their respective governments) believed they did not have any impact on management decisions. These results could be interpreted as a positive move, especially by independent companies, toward gradually adopting the winning philosophy of sharing management and ensuring key decision-makers allow employees to share and participate in corporate decisions. Obviously, work remains to be done in this area (namely, for majors and NOCs) to ensure everyone is on board with respect to decision-making.
Are You Happy?In the oil and gas industry, people are our most important asset. When the ship is sinking, the best swimmers jump fi rst. That is why a fair and standard salary placement is critical, on the one hand, to retain employees and, on the other, to maintain a motivating work environment. This is apparently a well-embraced truth in the industry because careers in the oil and gas industry have been known to offer above-average wages, compensation, and benefi ts historically. Because compensation is such a key motivator in the global workforce, we wanted to get a feel for how satisfi ed our industry’s employees were at the end of the pay period. The majority of respondents reported that they are content with the salary they receive. More precisely, 70% of hires at major companies were pleased with their wages. This fi gure was 91% for employees of independents.
How a company rewards its staff can impact the success of both the
Soft Skills... Continued on page 21
42%
53%
5%
Major
Independent
NOCs
Fig. 1—Distribution of survey respondents: Major vs. independent and NOC employees.
19Vol. 8 // No. 2 // 2012
F rommer’s travel guide describes Jakarta as a “steamy, raw, chaotic place that puts all fi ve senses in
overdrive” and “not for the faint-hearted.” Surrounded by the Indian and Pacifi c
oceans and located on the northwest corner of the island of Java, Jakarta is a dizzying and sprawling metropolis. A city that used to serve as an integral trading port for the kingdom of Sunda and the de facto capital of the Dutch East Indies, Jakarta continues to be an economic, cultural, and political epicenter for southeast Asia.
Although the population of Jakarta proper is estimated at 10.2 million people, its urban area has spread to encompass more than 23 million people, trailing only Tokyo as the largest urban area in the world. This ultradense population has led to complex socioeconomic problems.
Another major challenge for Jakarta is the city’s low topography (40% of Jakarta is below sea level), which makes it prone to fl ooding. The latest of these large fl oods happened in 2007, when torrential
rain covered approximately 70% of the city in water up to 4 m deep.
In spite of its heartbreaking poverty, terrible traffi c, and muggy weather, Jakarta is a rich stew of multiethnic infl uences 1,500 years in the making, a result of the infl ux over the centuries of Indian, Arab, Chinese, and European traders and settlers.
Jakarta is the epicenter of life, business, and cultural activity in Indonesia. The amalgamation of several ethnicities is inevitable with such a large city. The Betawi people are a product of Jakarta’s economic fl ourishing in its colonial days before the 1940s. They formed the core of the population and still exhibit infl uence today, especially during the Jalan Jaksa festival (also known as the Kemang festival).
To experience some of the traditional music that is slowly fading from everyday life, visit one of the many high-class hotels that put on Wayang performances (typically a full night’s worth of entertainment consisting of shadow puppets, stories, and music) or Gamelan
(metallophones, xylophones, fl utes, percussion, and stringed instruments) music bands.
Unfortunately, venturing far from one’s accommodations may be diffi cult, because the infrastructure is still being developed for private vehicles and there is a shortage of public transportation. However, if you fi nd yourself near the center of Jakarta, you might indulge in the myriad museums housed in the converted administrative buildings of colonial era Jakarta (known as Batavia then). The themes of the museums include religion, fi ne arts, textiles, and science, telling the story of the many infl uences each visiting and inhabiting culture had on the city.
Although the offi cial language of Indonesia is Bahasa, tourists will fi nd that asking for help or directions is very simple because English is the prevailing foreign language used. Also, most hotels have translators for Japanese, Mandarin, and some Western languages, such as German, Dutch, French, and Spanish. Body language is generally not an issue;
Tony Fernandez, Noble Energy, Marjan Jamshidi, University of Southern California (student), Jim Stiernberg, Louisiana State University (student), and Tyler Roberts, Baker Hughes
YP Guide
Jakarta, IndonesiaGUIDE TOTHE YOUNG PROFESSIONAL’S
20
shaking hands with men and women alike is typical, but beckoning with the index fi nger or giving and receiving things with the left hand is impolite.
Jakarta provides a diverse range of education options to go along with its diverse population. Public, private, and international schools provide options for local residents or relocated families from many parts of the world. Advanced degrees are also offered in Jakarta at the University of Indonesia (UI), Jakarta State University, and Jakarta State Polytechnic. Universities in Jakarta offer technical degrees in all aspects of engineering, along with degrees in all phases of academia.
The oldest university in Jakarta, UI, dates to 1850 when the Dutch East Indies established the location to train nurses and medical assistants. Over the next 160 years, the UI campus has grown to include all aspects of higher education. UI has become a world leader in green initiatives on college campuses. In 2010, the university established the Green Metric, where universities throughout the world submit their commitment to going green and working toward sustainability on their campuses.
Indonesia’s collection of 17,000 islands—which makes it the world’s largest archipelagic state—extends across nearly 1 million km2 and several key oil and natural gas basins. In combination with its domestic oil and gas activity and manufacturing muscle, its strategic location between Australia and continental Asia makes Indonesia’s capital a natural hub for oil and gas activity.
Oil & Gas Operations in the RegionUnconventional resources and fragile formations provide technical challenges for the oil and gas plays around Jakarta. Thick carbonates are naturally fractured and cause losses during drilling gradually or rapidly, depending in part on the thickness of the bedding. This is prevalent in the Mahakam Block, which contains the Tunu, Tambora, and Peciko gas fi elds; these fi elds produce about 80% of the gas going to one of the largest liquefaction plants in the world, the Bontang liquefaction plant. It is located in Kalimantan on the island of Borneo, which is bounded on the north, east, and south by plate boundaries known to be or to have been active in recent geological history (mainly in the Tertiary period).
This activity, or possibly carbonate dissolution, may be the predecessor for the faulting in some of the formations. To combat this lost circulation, a uniquely Indonesian technology (developed and sourced in the region) employing an organic cellulose fi ber has been implemented with great success. Field procedures have also been adapted to help quickly understand the effi cacy of sealing within wellbores as well as to handle the fl uid properly to avoid excessive treatment.
Indonesia’s upstream oil and gas regulatory agency is called BP Migas. BP Migas is a state-owned legal entity mandated by law to supervise and control production sharing contracts’ (PSC) execution through partnerships to ensure the success of upstream oil and gas business activities and maximize the state’s revenue for the benefi t of the people of Indonesia. The agency reviews fi eld development plans and approves PSCs’ work plans and budgets. It also monitors the cooperation contract implementations and reports them to the minister.
Pertamina, the state-owned oil and gas company based in Jakarta, focuses on fi nding new oil and gas reserves and improving production of the existing and recently discovered reserves. In order to improve oil production, Pertamina invites foreign oil companies to cooperate in the exploration and production of oil and gas as contractors. One of the Pertamina contracts is a PSC in which Pertamina is responsible for the management of petroleum operations, whereas the contractors engage in exploration operations at their own fi nancial risk. These expenses may be recovered once commercial production commences.
In order to increase production, new incentives have recently been put into place. Oil production in Indonesia has been declining since 1995, when production reached its peak at 1.6 million B/D. In 2011, Indonesia’s crude oil production totaled just 903,441 B/D, down 4.4% from the previous year and down a staggering 43.5% since its peak. In December 2011, MP Migas announced that 15 oil and gas projects would begin production in 2012. The production rate from these new projects is expected to be about 1.15 MMscf/D of gas and 32,200 BOPD. A press statement published by the ministry stated that 11 of the contractors have pledged to invest USD 201.3 million on exploration in the fi rst 3 years.
FACTSJakarta• The name Jakarta is derived from
the Sanskrit word Jayakarta, which translates as “complete victory.”
• Jakarta is nicknamed “the Big Durian” because the city is seen as the Indonesian equivalent of New York City (the Big Apple); durian is a locally grown fruit with a thick, spiky rind.
• With a population of approximately 10.2 million people, Jakarta is the 12th largest city in the world.
• Jakarta gained its independence from the Netherlands in 1945.
• Jakarta can be divided into three sections—the old town in the north, with Javanese, Chinese, and Arab sections; central Jakarta, with high-rise buildings; and a modern residential garden suburb in the south.
Sources• en.wikipedia.org/wiki/Jakarta
• www.asiarooms.com/en/travel-guide/indonesia/jakarta/jakarta-overview/index.html
• www.frommers.com/destinations/jakarta/
• www.thejakartaglobe.com/energy/the-state-of-oil-and-gas/439676
• greenmetric.ui.ac.id/
• www.ipa.or.id/main.php?page_id=59&page_category_id=3
• www.jakartaservice.com/business/category/news/oil-gas-paradigm-shifts/
• lifestyle.iloveindia.com/lounge/facts-about-jakarta-3113.html
• Taufik, M., Panjaitan, R.A., Djambek, A. 2011. Fibrous Organic Cellulose Application To Combat Seepage Losses in Fractured Limestone Formations, Offshore East Kalimantan, Indonesia. Paper 145763 presented at the SPE Asia Pacific Oil and Gas Conference and Exhibition held in Jakarta, Indonesia, 20–22 September 2011.
• www.beritajakarta.com/english/default.asp
• www.energy-pedia.com/news/indonesia/pertamina-to-operate-west-madura-offshore-block
21Vol. 8 // No. 2 // 2012
Three of the aforementioned projects are on the West Madura Offshore Block located in East Java. These three projects are expected to produce 25,800 BOPD in 2012, increasing to 40,500 BOPD in 2015. In addition, a large project operated by Kangean Energy in East Java is projected to produce approximately 300 MMscf/D of gas in the second half of 2012.
Even though oil production is declining, signifi cant reserves of natural gas remain in Indonesia. As of May 2011, merely one-third of Indonesia’s natural gas basins had been explored in the archipelago, and these alone give Indonesia the largest natural gas reserves in the Asia Pacifi c region.
Moving forward, Jakarta (and Indonesia as a whole) stand to benefi t greatly from unconventional resource technological advances. The untouched natural gas and offshore oil basins have the potential to allow Indonesia to be an energy self-suffi cient country, reversing the 3.61% annual sector reduction and negative job growth. These basins have remained untouched because of the high cost of extraction and the required upgrades to the infrastructure in Indonesia. Government incentives are being introduced to encourage development, but internal disagreement has stalled the implementation of any such reform. As a show of local commitment, Pertamina is attempting to increase its oil and gas output, with a goal of 1 million BOE/D by 2015.
The natural resources surrounding Jakarta have the potential to impact Indonesia in a way that will greatly benefi t future generations. If the investment is made to provide state-of-the-art technology and infrastructure improvements, then Jakarta can position itself to be the “Big Durian” of the industry. TWA
organization and its personnel. Have you ever glanced through your company’s website and come across a company announcement for a promotion or a transfer and wondered, “How did he/she get that position?” Our survey results indicate that more than half the respondents seemed to be comfortable with their organization’s recognition system. It is worth mentioning that 70% of employees at major companies had
a clear understanding of their human resources policies on reward and recognition. This fi gure was around 50% for employees of independents.
As mentioned at the beginning of the report, work/life balance is a concept defi ned by a proper prioritization between work and life. Nearly 60% of the respondents indicated that the imbalance between work and personal life is controlled mainly by the work.
In essence, the imbalance is pretty seasonal, depending on the work load.
Though it may always seem that the grass is greener on the other side, no company can provide a completely perfect work environment, whether it is a major, an independent, or an NOC. However, our survey illustrated that the majority of employees are happy with their job and think the advantages of working for their company outweigh the disadvantages. TWA
Soft Skills... Continued from page 18
YPCC Interviews... Continued from page 17
How long have you been an SPE member? I have been an SPE member since college—a total of almost 11 years.
Are the YPs in your section active? Do you participate in YP events?The regional YP section in Saudi Arabia holds frequent workshops, courses, and technical exchanges. An annual large-scale technical symposium is also organized by the section members. All these activities helped SPE Saudi Arabia Section’s YP program win the fi rst SPE award for YP section excellence in 2008, as well as the latest, for 2011. Furthermore, four members of the section have won the SPE Regional Young Member Outstanding Service Award.
In addition to participating in various YP events, I have had the privilege of leading and organizing several of these events.
Which activities have you initiated? Some of the YP programs I’ve conducted include the SPE YP Annual Technical Symposium, courses, and social gatherings. The closest to my heart was hosting a behavior-based safety workshop for YPs working in the fi eld
and rolling out the Ambassador Lecturer program initiative to schools throughout Saudi Arabia.
How have these activities helped the YPs in your section?The initiatives have resulted in an increase in the section’s YP members who wanted to take action and join the section’s YP volunteer team.
What differentiates you from other YPs who were in the race to receive this award?I believe I was lucky working with amazing YP teams that have helped magnify our achievements and spread our message to the greater YP community. I would also like to recognize the unstinting support my employer Saudi Aramco gives to these YP initiatives.
How has SPE helped you in your professional life?SPE has enabled me to add a lot to my technical skills and provided me with opportunities to share my experience with fellow professionals. SPE has introduced me to other petroleum engineering professionals all around the world, giving me a much broader understanding about the global petroleum industry. TWA
Abdullatif A. Al-Omair, 31, supervisor in the reservoir management department at Saudi Aramco, received the 2011 SPE Young Member Outstanding Service Award. This award recognizes contributions to and leadership in the public and community arenas, as well as SPE, the profession, and the industry, by a member under age 36. He is responsible for developing and managing production from a major oil field in Saudi Arabia. During his 9-year career with Saudi Aramco, Al-Omair worked
with various departments such as production engineering and reservoir characterization, and was a member of Saudi Aramco’s upstream multidisciplinary event solution team. He earned a BS degree from Tulsa University and an MS degree from Texas A&M University—both in petroleum engineering.
22
SPE 101
Christopher Jenkins, Devon Energy
SPE Events: Which One Is Right for Me?
I f you have ever thumbed through a copy of the Journal of Petroleum
Technology or surfed around on www.
SPE.org, you are no doubt aware of the wide variety of events our society holds for its members. At fi rst glance, the appeal of an event might be its location—an exotic locale you have yet to visit—or perhaps just the opposite, you’re looking for an event close to home. What about the relative technical merits of each?
As we will fi nd out, SPE events are not all created equal. Different types of events cater to different needs within the industry. Depending on your objectives (e.g., training, networking, sharing technical knowledge, etc.), you will fi nd some events will meet your needs better than others. When it comes to choosing the right one, a bit of planning and careful thought can go a long way.
First you will need a little background information. SPE offers four kinds of “live” learning opportunities:
Forums are unique, by-invitation-only events that bring together top technologists, innovators, and managers to address a specifi c industry challenge. The objective is to stimulate thought, accelerate innovation, and inspire the development of new technology.
Conferences can be focused on a specifi c topic or have a broad technical scope. The technical program covers current applications and new or future technologies. Conferences typically offer special sessions, such as panel discussions and luncheons, in addition to technical sessions. In most cases, conferences also feature an exhibition of the latest products and services, offering attendees a chance to experience new equipment and technologies in person. SPE’s Annual Technical Conference and Exhibition (ATCE) is SPE’s main technical conference. It is held most of the time in the US, but look forward to 2014, when Amsterdam will host it for the
second time ATCE has been held outside North America.
Workshops are topic-specifi c, intensive events that are smaller in scope and size than conferences. Workshops maximize the exchange of ideas among attendees and presenters through brief technical presentations followed by extended Q&A periods. Focused topics attract an informed audience eager to discuss issues critical to advancing both technology and best practices.
SPE-sponsored training courses
offer a quick, convenient, and cost-effective way to build your knowledge on a focus area or topic. SPE offers standalone training courses through local sections or at the SPE training centers in Houston and Calgary, but there are also courses held in conjunction with select SPE conferences. These 1- or 2-day courses are typically held immediately before or after a conference.
So, which kind of event is right for you? It really depends on your objectives. Since each type of event offers a unique variety of activities and topics, you will need to identify your primary reason(s) for attending. While networking, attending exhibitions, and learning about the latest technologies are all good and useful goals, if you can be more specifi c, you will be able to home in on a specifi c event. For example, let’s say your primary goal is to make new connections through networking. What kind of people are you hoping to add to your network? Do you need more contacts within your local or regional industry? Perhaps a regional conference would best serve your needs. Are you looking to become acquainted with experts in a particular fi eld? A forum or workshop might be ideal. If you would like to meet lots of people working on projects similar to yours, a major conference or a themed conference in your area of interest would be valuable.
You can use a similar process of elimination if you have a paper to present. Give some thought to the likely makeup of the audience—are they local, regional, or international? Will a particular event attract a large enough audience to give your paper the exposure you are seeking?
If the exhibition is of particular interest to you, then you should be aware that forums and workshops do not generally have exhibitions associated with them. The exhibitions at conferences vary in size, but generally the conferences with the most attendees have the largest exhibitions. That notwithstanding, a themed conference with a more modest exhibition may be very helpful if you have a more specifi c technical focus. Of course, if one of your objectives is to network for a new job, a large conference might serve you best, simply due to the sheer number of exhibitors and potential contacts to be made.
Do not discount SPE Forum events because of their “by-invitation-only” label. There is nothing stopping an enthusiastic SPE member from contacting Forum committee members to present their qualifi cations and express their desire to attend and contribute. Everyone appreciates an enthusiastic participant.
Finally, one of the most important parts in the process of selecting the right event is the discussion you will have with your supervisor in order to plan your development. The cost of attendance and time spent away from the offi ce are valid considerations. Well before any event (and throughout your career), you should work together with your supervisor to establish a shared vision of your goals (both for business and personal development, long-term and short-term). If you can show that a particular event is well-aligned with these objectives, you will fi nd your leader will be much more likely to support your attendance. Whatever your goals, aspirations, and constraints, there is always an SPE event to match your needs. Who knows, you just might get to take a trip to that exotic locale after all.
Need more information or a schedule of events? Visit http://www.spe.org/
events/calendar or http://www.spe.
org/training. TWA
23Vol. 8 // No. 2 // 2012
Academia
Academia and Independent E&P Companies: A Win-Win PartnershipSubhash Ayirala, Shell, Paulo Pires, Petrobras, and Sanchit Rai, University of Tulsa (student)
Independents play an important role in the oil and gas industry. They specialize in unconventional fi eld development and are largely credited with the shale gas boom that has occurred in the US. Despite this success, they differ from the large, integrated majors in that they usually have limited or no research and development (R&D) capability. In order to remain competitive, independents commonly rely on academia to meet this need.
This article presents three important R&D realms that demonstrate good collaborative efforts between independents and academic research institutions.
Pilot EOR OperationsOne key area for independents in North America is mature fi eld development whose aim is to extract the proven residual oil trapped in these reservoirs. Independents acquire mature assets primarily from major exploration and production (E&P) companies once the majors start viewing them as marginal or economically unattractive. Independents tend to view mature fi elds as attractive because, as smaller companies, they typically have more effi cient operating structures with lower overhead, and are more willing to deploy advanced and emerging technologies. Several mature onshore fi elds, such as Yates in Texas and Salem in Illinois, are good examples of these acquisitions.
Independents are actively working on the implementation of improved or enhanced oil recovery (IOR or EOR) pilots in mature oil fi elds to rejuvenate them. Chemical and miscible gas injection processes are the most widely preferred EOR technologies for recovery of light to medium viscosity oils. Chemical EOR processes include injection of alkaline/surfactant/
polymer (ASP), surfactant/polymer, and polymer, as well as CO2, which is the most common and preferred injectant for gas injection EOR processes due to its capability to develop miscibility with diffi cult oils, and the added environmental benefi t of possible CO2 sequestration.
Both EOR processes work on similar principles. They minimize capillary pressure and result in incremental oil recovery through modifi cations in interfacial forces. A common trend is for independents to collaborate with universities and oil and gas service providers known for technical excellence in the laboratory work, pilot design, and implementation of these advanced EOR processes.
The Research Partnership to Secure Energy for America (RPSEA) has started a “small producer program” that awards several proposals annually to qualifi ed “consortia consisting of small producers or organized primarily for the benefi t of small producers” whose “primary focus … will be technology development in mature oil and gas fi elds with the objective of extending the life and ultimate recovery of these fi elds.”1 One recent project, awarded in 2007, is a collaborative effort between the University of Kansas and Carmen Schmitt, a Kansas independent producer. The project goal was to evaluate the feasibility of near-miscible CO2 injection to improve oil recovery for a possible future fi eld demonstration pilot in Carmen Schmitt’s producing fi eld in the Arbuckle formation.
Another project, awarded in 2008, involves the Texas independent Layline Petroleum and project partners Tiorco and The University of Texas at Austin (UT). This project calls for fi eld demonstration of the applicability of an ASP fl ood in a mature oil fi eld in Brookshire Dome, Texas. More project
information and results can be found on RPSEA’s website.2
The Center for Petroleum and Geosystems Engineering at UT has one of the most popular chemical EOR industrial affi liates programs3 in the US with active participation from the oil industry. There are more than 30 participants in the program and these include oil majors, national oil companies (NOCs), mini-majors, and some independent oil and gas producers.
Kansas University’s Tertiary Oil Recovery Project4 is working on technologies such as miscible or near-miscible gas injection to improve oil recovery from mature oil fi elds owned by independents in Kansas.
Field Development Operations OptimizationMature fi elds pose a number of challenges not faced in the initial stages of fi eld production. The management and revitalization of mature fi elds demand fast and optimized drilling, cost-effective workover operations, effi cient water treatment and environmentally conformed disposal, and artifi cial lift optimization and management, to name a few. There are several examples of partnerships between industry and academia that help independents to optimize mature fi eld development.
In 2000, an agreement between the US Department of Energy (DOE) and The Pennsylvania State University established the “Stripper Well Consortium,”5 aimed at the development of technologies to improve productivity of oil and gas stripper wells in the US. The consortium is composed of small petroleum producers and universities, among others, and tailors research projects to industry demands in the areas of well stimulation, pumping, water management, and so forth.
24
Academia
Typically, high recovery factors imply increased water production rates. Hence the operation of mature fi elds requires effective separation, treatment, and disposal of produced water as well as addressing problems such as inorganic scale deposition. Rice University manages the Brine Chemistry Consortium,6 which includes independents such as Marathon, Occidental, and Southwestern Energy, among other industry partners classifi ed as NOCs, majors, and service companies. The consortium’s central idea resides in research and technology transfer on issues related to brine production.
Field revitalization necessitates the drilling of new wells, both infi ll and developmental, in order to access remaining hydrocarbon volumes. Therefore, strategies to optimize cost and time for well construction are critical. This is the focus of the Drilling Research Projects,7 maintained by the University of Tulsa. This program is conducted as a cooperation between industry and academe and has the objective of cost reduction through technological improvement of well drilling operations. It addresses key research areas such as drilling fl uids, cuttings transport, and wellbore stability.
Another issue of major importance is the improvement of the well/reservoir interface. As long as the wellbore is effectively exposed to the formation, high productivity is to be expected. Well stimulation techniques are applied both to improve productivity and to overcome well impairment mainly as a result of formation damage and scale formation. Therefore, well stimulation has been considered a rich theme for research and technology advancement. In this context, the Colorado School of Mines manages the FAST (Fracturing, Acidizing, Stimulation Technology) Consortium,8
whose purpose is to conduct practical research on stimulation.
Pioneering Shale Gas DevelopmentFinally, coming to what may be the hottest issue in the oil and gas industry today, independent oil and gas fi rms
are undoubtedly leading the way when it comes to gas production from shale. Chesapeake, EOG Resources, Devon, and Southwestern Energy are among the leading producers of natural gas from shale. The innovation in shale gas production itself started with an independent oil and gas company called Mitchell Energy. The company (later bought by Devon Energy in 2001) ventured into the Barnett shale in Texas and pioneered new technologies in horizontal drilling and hydraulic rock fracturing to make the production of gas from shale economically feasible. Because this is a relatively new area for the petroleum industry, there is obvious uncertainty in the best practices of exploration, drilling, well completions, and reservoir management that representatives of independents often talk about at SPE conferences, lectures, and meetings.
Unconventional shale plays have unique pore size distributions, and gas storage and gas fl ow mechanisms, all of which represent current unsolved puzzles. Experiments involving the geomechanics of shale rock, anisotropy, organic matter characterization, thermal maturity, adsorption-desorption, and kerogen content are the major areas of research and study. A considerable amount of research is dedicated to understanding the petrophysical properties of these complex reservoirs. A variety of laboratories, funded by independents, are busy at universities and the various other R&D facilities worldwide to understand these rocks better. Technologies such as high-pressure MICP (mercury porosimetry analysis), SEM (scanning electron microscopy), and focused ion beam X-ray diffraction are being employed to understand pore structures on a nano level. The University of Oklahoma, one of the frontrunners in experimental laboratory work to understand shale rocks, has a laboratory funded by independents such as Devon and Apache. New fi ndings in this laboratory are continuously driving and changing best practices independents apply in shale play development.9
Considering the large amount of production data from the hundreds of wells independents operate, and the manpower needed, the task of analyzing the data is often given to universities. This helps bring research funds to universities and creates opportunities for graduate students and researchers to introduce novel ideas in areas such as rate decline analysis for predicting EUR (estimated ultimate recovery), well test analysis, and reservoir simulation studies for typical reservoirs.
Hydraulic fractures are created on a massive scale in the horizontal wells drilled in these reservoirs. These fractures are the primary channels for gas fl ow, which comes from the matrix and the induced secondary fractures in the reservoir rock. The network of fractures is complex, and the mathematical modeling of gas fl ow through the fractures is a nightmare. A host of graduate students and researchers are busy evaluating hydraulic fracture treatments using production and pressure transient data. The aim is to predict long-term production behavior from these wells and hence minimize the uncertainty in the associated economics.
Research partnerships between independent oil and gas companies and universities benefi t both sides. On the one hand, academe gets the opportunity to work on the latest technological challenges and propose feasible solutions, and on the other, independent fi rms gain conceptual insights into the technical problems they face and sometimes as a result can optimize their effort, time, and investment. TWA
References1. www.rpsea.org/en/cms/?363 2. www.rpsea.org/en/cms/3398 3. www.cpge.utexas.edu/ceor 4. https://www.torp.ku.edu 5. http://www2011.energy.psu.edu/swc/ 6. www.brinechem.rice.edu/ 7. www.tudrp.utulsa.edu/ 8. http://petroleum.mines.edu/research/
fast 9. www.spe.org/jpt/print/archives/2011/
06/10ShaleResearch.pdf
25Vol. 8 // No. 2 // 2012
Technical Leaders
Editor’s Note: While usually we inter-view two seasoned professionals, this time we did something a bit different. We hope you enjoy the views both of an industry veteran and of a YP who is also a veteran, but of a different kind.
Please describe your career path, from university graduation to independent oil and gas company. Is there anything in particular that attracted you to the company you work for now?JF: I studied geology at the University of Wales (Aberystwyth University), in a course designed to prepare graduates for the oil business. Unfortunately, when I graduated in 1979, there were very few jobs in the oil business (and “mud logger” sounded unappealing!). I went into the mining business as a mineral exploration geologist in southern Africa with De Beers Anglo American group. But after 6 years of living in the bush I wanted to drive a desk, not a Landrover, so we came back to Britain.
I worked several jobs with large oil companies. My last posting was in Syria. There I was approached by Maersk Oil and I thought it was a very interesting offer because it was an opportunity to get involved in business
development with a company that has a fantastic brand, history, reputation, and foundation to grow from. I think Maersk’s production, its employees’ technical skills and pioneering mindset, plus the access to capital through the group and the international footprint through group activities such as Maersk Line are amazing differentiators from a business developer’s point of view. I saw very early on even before I came here that it would be easy to sell our story as an attractive partner around the world. So that, plus the fact that business development and commercial activities in general are gaining in prominence at Maersk Oil, attracted me.CW: Following my graduation and commissioning from West Point I spent 6 years as an offi cer in the US Army. Following my second tour in Iraq, I was recruited by an independent oil and natural gas company as a production engineer. I spent 3 years in its Gulf of Mexico and Gulf Coast business units. This summer, I joined Anadarko’s Carthage/Haynesville business unit. Anadarko is a great company that challenges employees with responsibility, offers great learning opportunities, and really sticks to a set of core values—that means the most to me.
Recently, we’ve seen the spin-off of refining from Marathon and the impending separation at ConocoPhillips. Do these transactions signify a growing appreciation of the globally active “independent” business model?JF: This is a good question. It’s tricky to read this one. I mean, you could be cynical and say companies are moving toward the independent model to address short-term problems, but it does seem there has been a fundamental shift in the way oil companies organize themselves. Some 20 to 30 years ago there was a general feeling that integrated companies were better investments because they had a more predictable business, being better able to ride the oil price cycle, and so were more stable with lower fi nancing cost. At the same time, in those lower price environments, the “pure play” upstream companies were less attractive because the exposure to the upside was not expected, but now we have seen a general shift in oil prices upward and the exposure to the upside is more important to certain investors. Anecdotally, a banker friend of mine told me downstream has only really enjoyed 3 good years of business in the last 35 years!
The downstream sector is essentially a utility business with stable returns and steady, long-term, lower risk. People who invest in upstream are OK with higher risk because they want to be exposed to larger upsides that come along when explorers get it right and have great success and strike at the right time in the oil price cycle. The answer to the question is perhaps subjective.CW: Each company is different and is valued differently among the investment community, so this question is probably better addressed by analysts. For us, we do two things really well: We develop unconventional resources including
Insight into Independents: Interview with Two LeadersJon Ferrier, Maersk Oil, and Chris Widell, Anadarko
Jon Ferrier is head of business development and strategy for Maersk Oil. He holds a BS degree in geology from Aberystwyth University, as well as an MS degree in mineral exploration from the Royal School of Mines, Imperial College London. Ferrier started his career as an exploration geologist in mining at Anglo American in South Africa. Later, he moved to London to work with Conoco as a development geologist. He held multiple technical and managerial positions with ConocoPhillips before moving to Paladin Resources as director
of business development. He also worked as country manager for Syria with Petro-Canada for 3 years.
26
Technical Leaders
shale, tight gas, fractured reservoirs, and coalbed methane, and we are a leader in deepwater exploration.
How significant are North American shales, global unconventionals, and deep water to your global portfolio?JF: I could argue that the fi elds in Denmark and Qatar are pretty unconventional and Maersk Oil has a high exposure to these very challenging and unique plays. Deep water is becoming an increasingly important part of the portfolio; something like 60% of our capital in the next 5 years will be invested in deepwater projects such as those that we have in the Gulf of Mexico, Brazil, and Angola. In both Brazil and Angola we have some high-potential appraisal wells being drilled this year. So deep water is very much a part of Maersk Oil’s makeup these days.
A decision was made before I arrived here that we would not get into shale gas. Whether we should be in liquids-rich plays is another question. I am still not convinced we have the organizational reach to be effective and competitive in a new market like that. Maersk Oil is very good with unconventional drilling, horizontals, and complex completions, but to say that we can go into a new country effectively—North American onshore—and be competitive as an operator is a question mark for me. However, we will continue to watch developments in the industry and regularly review this decision. CW: As signifi ed by the company’s recent moves, Anadarko certainly
recognizes the potential of each of these. Despite the nontraditional gas/oil commodity price relationship, they offer real value and also help move the US toward greater energy security. As a veteran of Operation Iraqi Freedom, I know the human cost of reliance upon energy from foreign nations that may not be friendly.
How have your company’s operations and strategy been influenced by the global recession (and nascent recovery)?JF: My view is that we have to take a very long-term view on our investments. Oil projects by nature are very long term—we are talking about 10-, 20-, 30-year cycles—so I think it’s very risky not to invest during economic downturns. You just suffer later on. Thankfully, we enjoy the backing of the A.P. Moller-Maersk Group, which takes a long-term view of all its business units and has a strong balance sheet. The group has said that Maersk Oil will remain an investment priority. CW: We’ve built a deep and balanced portfolio of assets that provides tremendous fl exibility. As we began to see a widening gap in the values of oil and natural gas, we have been able to allocate capital investment toward areas of our portfolio that offer better liquids yields that generate higher margins. From a tactical viewpoint, I’d say that we keep an eye on one area we can control and that’s managing our cost structure. We are always seeking to drive effi ciencies while maximizing economic
return per well. This focus on working smarter has also continuously improved our safety performance. We’re growing fast, so we must stay ahead of operations and allocate capital effectively.
What are the advantages for a young professional starting a career with an independent?JF: I can tell you why young professionals should join Maersk Oil: We are a company that has the ambition and means to grow signifi cantly over the coming years with a portfolio of good projects. We have a track record of giving new starters real responsibility early on in their careers, and if they take advantage of that, they are assured an exciting global career path.CW: I think you’ll be a lot closer to the proverbial “drill bit.” You’ll enjoy more freedom and at the same time be challenged quickly with responsibility.
How does the culture in an independent differ from that in a major? Do you think there is more interaction between management and/or supervisors and the younger professionals?JF: I believe there is more interaction among managers, supervisors, and young professionals than in a giant company. If we speak generally, the culture is less bureaucratic, faster paced, and a bit more fl exible.
Every company needs global processes, structures, and practices to a degree, but we believe ours are fi t-for-purpose, allowing Maersk Oil to be fl exible and agile with fast decision-making. Each company has a culture of its own. We are building on our traditional pioneering mindset and adding a greater degree of transparency to our culture to become a natural collaborator of choice for partners and employees.CW: Having never worked for a major I can’t compare. Coming from the military, I can say that in general there is much less red tape to negotiate at the two companies I’ve worked for than within the US Army. As far as the culture is concerned, I think that is a function of the company’s leadership, not the type of company. I’ve seen both good and
Chris Widell, from Columbus, Ohio, currently serves as the water team lead for Anadarko’s Carthage/Haynesville business unit. He graduated from the United States Military Academy at West Point in 2002 with a BS degree in civil engineering. From 2002 to 2008 Widell served in the 1st Cavalry Division, Fort Hood, Texas, and deployed to Iraq twice—fi rst to Baghdad in 2004 and then to the Diyala Province during the Surge of 2007. Awards and decorations include the Bronze Star Medal with oak leaf cluster, the Ranger Tab, the Combat Action Badge, the
Parachutist Badge, and the Air Assault Badge. In 2008 he exited the Army as a captain and joined Newfi eld Exploration working in the Gulf of Mexico and Gulf Coast asset teams as a production engineer. In 2011 Widell joined Anadarko Petroleum.
27Vol. 8 // No. 2 // 2012
bad leadership since leaving West Point 10 years ago and in each place I’ve worked the work culture has oftentimes been a refl ection of its leadership style. I think we can all agree that interaction between upper management and young professionals can benefi t both parties, be they vice presidents or vice admirals. As an Army captain, I gained as much from the time spent with my corporals as I did with my fellow offi cers.
Are independents making a significant research and technology effort?JF: I have worked for three independents and ConocoPhillips (a major) and they all had some involvement in research—each done differently. We all tend to be “niche focused” on what areas of business are important to us rather than just speculating on what might become important, but our project portfolio is naturally much smaller than a major’s. At Maersk Oil we have a new technology center in Qatar and a lot of work is going on in completions and well conformance. We focus our research on relevant challenges for our business. I think it’s the same across the independents. CW: Technology is a signifi cant part of our business. It’s what enables us to explore in deep water, and it’s responsible for the enormous natural gas and oil resources now being recovered from shale formations in the US. I think what the E&P world is discovering is that research and development dollars are well spent on the completions side. Compared to conventional onshore tight gas or amplitude plays in the Gulf of Mexico, these newly discovered shale gas or shale oil reservoirs have shown us the value of effective completions technologies. Money spent on R&D with respect to completions can help recover more resources and keep costs low.
Another area in which our technology division is expending effort is on water conservation and chemistry. Horizontal completions in shales require greater volumes of water than conventional development; hence, water must be sourced and used responsibly. We are constantly seeking new ways to
conserve resources and reuse as much produced water as possible. A better understanding of water chemistry is necessary to identify which water sources—whether produced, brackish, or freshwater—will economically satisfy water demands.
Do the independents prefer to invest in research programs in universities and research institutes rather than having in-house research facilities?JF: Maersk Oil does a bit of both. A dedicated team in Copenhagen looks at new technologies such as the breakthrough “TriGen” technology—an oxy-fuel system that can exploit low-quality gas resources to produce power, water, and “reservoir-ready” CO
2
for enhanced oil recovery purposes. We have a brand-new research and technology center in Qatar that has already applied for patents as it studies improvements for our well technology and oil recovery. We also have joint industry projects in collaboration with universities, such as our 5-year chalk study with the University of Copenhagen or our BioRec project with Novozymes, which is looking at microbiology and biotechnology for applicable solutions to some of the problems facing oil recovery efforts.CW: Perhaps. Both methods will certainly yield benefi ts. In-house resources give independents with the personnel available the ability to control their own destiny regarding research. Smaller independents without the resources for an in-house group would benefi t from an academic collaboration.
Do you find there is quicker dissemination/adoption of technologies at an independent (relative to a major) due to its smaller size?JF: I would like to think so, but it’s a balance between bureaucracy vs. resources. Super majors have enormous resources with a tremendous number of people, but they may be bogged down by their own internal systems and procedures. We have less of that, but we have fewer resources to meet technology challenges. There is a balance I think we tend to get right.
CW: In my view, as much speed as a company gains from its smaller size, it might also miss out on the ability to discover and in turn test new technology at an early stage, thus missing out on fi rst or early-adopter advantage. This can be avoided by keeping a close eye on new technologies by attending industry conferences and reviewing publications.
The majors are currently engaged (in North America) in a campaign to educate the public about the benefits of shale exploration. How do you see the independents contributing to changing the public’s perception about the oil and gas industry?JF: This is an issue I feel very strongly about. I think it’s so sad that the public tends to have one view of the industry—typically negative. We have got to do better as an industry in educating the public and I would like to start with children. Getting them to understand the reality of the world they live in and the role oil and gas play in their life is essential. They should also understand what the trends are because things are changing.
I think it has to be a concerted industry effort. It is not easy, and there have been efforts in the past, but they have not worked very well. Somehow we need to change that because if we don’t, our university students will not pursue the subjects they need to join an industry like ours.CW: We’re all working together on sharing our story with stakeholders. As independents, we don’t invest that much in direct advertising; however, we are very engaged with our local communities and with trade organizations such as the American Natural Gas Alliance, the Independent Petroleum Association of America, and the American Petroleum Institute. However, the best way we can impact this perception is through leadership by example. For instance, here in Carthage we have begun converting our fi eld fl eet vehicles from gasoline engines to compressed-natural-gas (CNG)-powered engines and have also installed a CNG refueling station. TWA
28
Petroleum reservoir simulation is the application of software designed to model fl uid fl ow in petroleum reservoirs. I fi rst encountered reservoir simulation while working on a project to store solar energy in an aquifer. During the fi rst 3 years of my career, I performed a model study of a relatively small oil reservoir, reviewed the status of naturally fractured reservoir simulators, conducted an analysis of multidimensional numerical dispersion, evaluated the feasibility of developing geopressured/geothermal reservoirs, and compared the relative merits of different chemical fl ood processes. I thus found that a career in reservoir simulation would provide interesting challenges in a wide range of applications.
The process of petroleum reservoir simulation is an aspect of reservoir management. Modern reservoir management can be broadly defi ned as a continuous process that optimizes the interaction between data and decision-making during the life cycle of a fi eld. This defi nition covers the management of many types of reservoir systems, including hydrocarbon reservoirs, geothermal reservoirs, and reservoirs used for geological sequestration.
Hydrocarbon reservoir management includes recovery of conventional and unconventional oil and gas resources using a variety of processes including primary recovery, waterfl ooding, immiscible gas injection, and enhanced oil recovery. Oil and gas fi elds are considered conventional sources of fossil fuels. Unconventional sources of fossil fuels include coal gas, tight gas, shale gas, gas hydrates, shale oil, and tar sands. Unconventional sources are becoming a more important part of the global energy mix as the cost of
development decreases and the price of oil increases.
Reservoir management concepts, tools, and principles are applicable to subsurface resources other than oil and gas. For example, the management of geothermal reservoirs and reservoirs used for geologic sequestration can be analyzed using reservoir simulation. Geologic sequestration involves the capture, separation, and long-term storage of greenhouse gases or other gas pollutants in a subsurface environment. Carbon dioxide injection in a coal seam can be both an enhanced gas recovery process and a geologic sequestration process.
Many disciplines contribute to the reservoir management process. In the case of a hydrocarbon reservoir, successful reservoir management requires understanding the structure of the reservoir, the distribution of fl uids within the reservoir, drilling and maintaining wells that can produce fl uids from the reservoir, transport and processing of produced fl uids, refi ning and marketing the fl uids, safely abandoning the reservoir when it can no longer produce, and mitigating the environmental impact of operations throughout the reservoir’s life cycle. Properly constituted asset management teams include personnel—often specialists—with the expertise needed to accomplish all these tasks. They must be able to communicate with one another and work together toward a common objective. Reservoir simulation helps integrate information from all the disciplines and provides quantitative reservoir performance forecasts.
According to the SPE competency matrix, reservoir engineers should be able to evaluate reservoir performance using reservoir simulation. At a
minimum, the reservoir engineer should be able to understand and apply reservoir simulation to analyze reservoir performance and optimize reservoir development. A reservoir engineer should be able to use basic reservoir engineering principles, including fl ow through porous media, relative permeability, nodal analysis, and multiphase fl ow to evaluate single well applications and black oil or gas reservoirs. A higher level of competence is achieved when the reservoir engineer acquires knowledge of specialized simulation techniques (such as matrix solution methods, numerical analysis, vectorization, fi nite element/difference analysis, and parallel processing), and is able to fi nd new opportunities, such as areas in the reservoir that are unswept or ineffi ciently drained, or identify new well locations with geological input.
In practice, careers in reservoir simulation often separate into one of two paths: software development or software applications. If you choose to specialize in reservoir simulator development, your career will benefi t from knowledge of numerical methods and computer programming. A career in reservoir simulator applications is facilitated by a broad background in reservoir asset management team skills, involving an understanding of contributions from the geosciences, drilling, production, facilities, and economics.
Reservoir simulation studies are important when signifi cant choices must be made. The choices can range from “business as usual” to major changes in investment strategy. By studying a range of scenarios, the reservoir simulation engineer is expected to provide decision makers with information that can help them decide how to economically commit limited resources to activities that can
Discover a Career in Petroleum Reservoir SimulationJohn R. Fanchi, Texas Christian University
Discover a Career
29Vol. 8 // No. 2 // 2012
achieve management objectives. These objectives may involve the planning of a single well, or the development of a world-class reservoir.
Reservoir fl ow modeling is the most sophisticated methodology available for generating production profi les. A production profi le presents fl uid production as a function of time. By combining production profi les with hydrocarbon price forecasts, it is possible to create cash fl ow projections. The combination of a production profi le from fl ow modeling and a price forecast from economic modeling yields economic forecasts that can be used by decision makers to compare the economic value of competing reservoir management concepts.
Reservoir management is most effective when as much relevant data as possible from all sources is collected and integrated into a reservoir management study. This requires the acquisition and management of data that can be expensive to acquire. As a consequence, reservoir simulation engineers need to estimate the value of the data by considering the cost of acquiring it in relation to the benefi ts that would result from its acquisition. They are involved in decisions that prioritize data needs based on project objectives, relevance, cost, and impact.
One of the critical tasks of reservoir management is the acquisition and maintenance of an up-to-date database. The reservoir simulation engineer can help coordinate activities for an asset management team by gathering the resources needed to determine the optimum plan for operating a fi eld. Collecting data for a reservoir fl ow model is a good way to ensure that every important technical variable is considered as data is collected from the many disciplines that contribute to reservoir management. If model
performance is especially sensitive to a particular parameter, then a plan should be made to reduce uncertainty in the parameter.
Different workfl ows exist for designing, implementing, and executing reservoir projects. A typical workfl ow needs to identify project opportunities; generate and evaluate alternatives; select and design the desired alternative; implement the alternative; operate the alternative over the life of the project, including abandonment; and then evaluate the success of the project so lessons can be learned and applied to future projects. By building and applying reservoir fl ow models—also known as dynamic models—the reservoir simulation engineer can play a signifi cant role in comparing alternatives, selecting the optimum reservoir management plan, and assessing the success of the project as it is being implemented and operated.
Modern fl ow modeling recognizes two types of workfl ows: greenfi eld workfl ow and brownfi eld workfl ow. Greenfi elds include discovered, undeveloped fi elds, and fi elds that have been discovered and delineated but are undeveloped. Brownfi elds are fi elds with signifi cant development history. Both types of workfl ows are intended to be systematic procedures for quantifying uncertainty.
Two brownfi eld workfl ows are in current industry use: deterministic reservoir forecasting and probabilistic reservoir forecasting. In deterministic reservoir forecasting, a single reservoir realization is selected and matched to historical performance.
In probabilistic reservoir forecasting, a statistically signifi cant collection, or ensemble, of reservoir realizations is prepared. Dynamic models are run for each possible realization and the results of the dynamic model runs are then compared to the reservoir’s historical performance. Modern reservoir simulation engineers need to understand the application of probability and statistics in fl ow model workfl ows.
Students graduating today can expect their careers to last to 2040 or beyond. Global demand for energy and societal demand for sustainable development have expanded the range of applications that come under the purview of reservoir simulation. Many companies recognize that the global energy mix is undergoing a transition from an energy portfolio dominated by fossil fuels to an energy portfolio that includes a wide range of sources. A career in petroleum reservoir simulation gives you knowledge and skills that can be applied in today’s oil and gas industry, and tomorrow’s energy industry. TWA
John R. Fanchi is a professor in the department of engineering at Texas Christian University, Fort Worth, Texas. He teaches courses in energy and engineering. Previously, Fanchi taught at the Colorado School of Mines, and worked in the technology centers of four energy companies. Fanchi is the author of several books, including Integrated Reservoir Asset Management (Elsevier, 2010), Energy in the 21st Century, 2nd Edition (World Scientifi c, 2011), Principles of Applied Reservoir Simulation, 3rd Edition (Elsevier, 2006), and Math Refresher for
Scientists and Engineers, 3rd Edition (Wiley, 2006). He co-edited the General Engineering volume of the Petroleum Engineering Handbook (SPE, 2006, Volume 1). Fanchi earned a PhD in physics from the University of Houston.
30
YP Newsfl ash
Speed Mentoring/Design Your Career, Calgary YP WorkshopA Calgary Young Professionals (YP) workshop was held as part of the Canadian Unconventional Resources Conference in Calgary, Alberta, in the fall of 2011. The workshop, titled Speed Mentoring/Design Your Career, offered participants an opportunity to engage with and obtain the advice of experienced professionals at three sessions over the course of the afternoon. The workshop began with a keynote luncheon, titled Dare to Accelerate Your Career. The keynote speaker, John Honeycutt of Key Energy Services, presented results of a survey that drew on the responses of 2,000 industry professionals. The second session invited four panelists to share their personal career experiences. These were Heather Scott, general manager, In-Situ Business Unit, Suncor; Sheila Reader, manager, Resource Plays and Technology, ConocoPhillips Canada; Jim Barclay, geologic advisor–Western Canada Gas, ConocoPhillips Canada; and Bob Steele, consultant.
The third and fi nal segment of the workshop was a speed mentoring session. Participants broke into groups of two to three YPs, and every 7 minutes mentors circulated to a new table. It was a fast-paced, fun way to meet new people and gain a few extra tidbits of information. Seven minutes is not much time for mentoring, but as long as participants got straight to the point there was usually time to ask at least a couple of questions at each table.
One of the main lessons learned from the workshop was the importance of not only building, but also maintaining networks. One can never fully predict the twists and turns that will be encountered throughout a career. A strong network of colleagues and friends is an important tool to help YPs successfully navigate their careers. All in all, the afternoon received great reviews. SPE Calgary YP looks forward to holding another great workshop next year.
–Karen Santillana, Suncor Energy
Leadership for the Technically Minded: What Do Young Professionals Need to Know?The common perception is that leaders in an organization are in the management team or have “lead” or “leader” in their title or job description. In the oil and gas industry, leaders are often senior executives, engineering managers, and project managers. By nature, technical professionals prefer to be focused on technical work and resist signifi cant management or leadership responsibilities.
To show YPs mainly from technical backgrounds how the core attitudes of leadership apply in their day-to-day work, the SPE YP Committee in Aberdeen conducted a workshop as part of Devex 2011. The workshop was attended by more than 70 keen YPs who were involved in solving challenging real-life case studies proposed by leaders in the oil and gas industry based on their various experiences. The case studies had scenarios whose success was possible only with a combination of technical skills and core leadership attitudes. During the event, participants broke into subgroups and solved the case studies under the supervision of panelists Leigh Ann Russell (wells manager, UK platform operations, BP), Steve Garrett (manager, Chevron Global Technology Centre), and Tom Pickering (managing director, Geometric Drilling).
The event’s novel theme and approach were well received by
participants, who came from all over the UK. After the event, Sankesh Sundareshwar, Aberdeen YP chair, refl ected that each case study highlighted unique challenges in the industry, but a defi nite lesson from all of them was that technical skills alone are not suffi cient for YPs and without leadership skills one cannot play an important role in a team’s or an organization’s decision-making process.
–Sankesh Sundareshwar, Bluewater Services
SPE Mumbai Section Organizes a YP MeetIt is rightly said “The way of the world is meeting people through other people.” In the oil and gas industry it becomes all the more essential to meet and network with professionals for growth opportunities, sharing experiences, and making new friends.
Emphasizing the same thought, a YP Meet was organized by the Mumbai SPE Section, which provided 40 enthusiastic YPs an excellent platform to network and share their experiences. The speakers for the day, Manoj Mohapatra (marketing manager, Schlumberger) and Ajay Kumar (consultant petrophysicist, BG India), encouraged discussions among the group, making the atmosphere light and interactive. The icing on the cake was various fun-fi lled activities such as an ice breaker, walkarounds, and a team-building activity. YPs were asked to build a bridge in a stipulated period of time; this activity was applauded by everyone. These activities were designed to allow YPs to meet and network with their peers while
YPs work on a case study during a leadership workshop at Devex 2011.
YPs listening to a speaker at the Mumbai Section’s YP meet.
31Vol. 8 // No. 2 // 2012
illustrating the importance of networking and teamwork to YPs.
The event was very well received by the YPs. The SPE Mumbai YP Section will continue to address subjects involving YPs and to provide them broader avenues by which to explore and grow through its activities. The SPE Mumbai Section YP team is thankful to Schlumberger and especially S. Ramamurthy for hosting this event.
–Sugandh Aggarwal, British Gas India
San Joaquin Valley YPs Focus on Their Projects and on Engineering Risk Management
In the wake of the Macondo disaster, there has been a lot of discussion about safety and how the oil and gas industry needs to accomplish something the US commercial airline industry has achieved for the past 3 years: zero fatalities. To assist in this goal, the San Joaquin Valley SPE YP Chapter brought in a risk advisor to discuss how to incorporate more layers of protection in the planning stage and how to follow up on a project after it has been implemented.
It was an interesting session where YPs were made aware of how appropriate safeguards should be incorporated in a project during the design phase by following the US Occupational Safety and Health Administration risk assessment matrix, or the company’s own matrix. Unfortunately, that is not enough. The oil industry is constantly changing and to accommodate these changes “fi eld modifi cations” are often made at every level to accelerate the accomplishment of a project. These modifi cations are not always evaluated properly for the hazards they may expose to personnel. It is important that all projects and process changes are properly evaluated for hazards and operational impact so that the incident rates of the oil and gas industry can rival those of the airline industry. TWA
–Keith Kostelnik, Occidental Petroleum
YPCC Awards
Outstanding Section YP Committees Awards: Building a Culture of AppreciationWhy do we give awards? Certainly, we aim at communicating gratitude and recognition for the recipients. But awards are also for the rest of us: We are honoring ideals as well as individuals. Understanding that ideals are perfect and largely unattainable, we fi nd meaning not so much in their achievement but in the effort made in attempting to reach them. The Young Professionals Coordinating Committee (YPCC) established an Awards subcommittee to identify ways of honoring and recognizing Young Professional (YP) committees for their achievements.
This year we have expanded the awards. We are recognizing innovation, ability, effort, and excellence in three Outstanding Section YP Committee Award categories:
• Overall Excellence• Most Improved• Most InnovativeIn addition to the expanded awards
categories, there was a huge increase in the number of applications submitted this year.
Selection for the award is based on membership growth, new or unique
initiatives, programs that develop YP technical competencies, involvement in international and inter-section activities, overcoming challenges, student chapter collaboration, and social responsibility.
The Overall Excellence Award is given to the YP committee that achieves excellence in all criteria. The Most Improved Award goes to the YP committee that best overcame challenges, while growing membership and increasing activities. The Most Innovative Award is for the YP committee that developed the most noteworthy new or unique activities.
Each year, the information gathered from all applications is analyzed, fi ltered, and summarized in the YP Committee Best Practices document, which can be downloaded from the YP Network (www.spe.org/go/ypn). Also, see The Way Ahead’s Vol. 8, Issue 1, 2012 SPE 101 article for some highlights from the applications.
Around the globe, YPs are devoting time, effort, and energy to contribute to SPE’s mission and values. The YPCC Awards Subcommittee is working hard to fi nd new and creative ways to single out YPs for special recognition. We challenge you to help us improve our ways of recognizing your work by emailing your ideas to [email protected]. We rely on your energy and input to improve our programs! TWA
32
Your Best Shot
Qush Tappa Block, Northern Iraq
Photo by Graham R. Skinner, operations graduate, KCA DEUTAG Drilling,
Aberdeen, UK.
A view from the crown of Performance Drilling’s T-80 rig operating for Korea National Oil Company in the Qush Tappa Block of Kurdistan, Northern Iraq. Photo taken with a Nikon D40 camera.
A Rig on Top of the World
Photo by Joshua Renzo, technical service mechanical engineer,
Derrick Equipment Company, Houston, Texas.
Located in the Rocky Mountain Region in Story Gulch, Colorado, the company is pad drilling multiple wells, and is drilling with water-based muds. Photo taken with a Nikon D50 with 18–55VR lens.
THE WAY AHEAD
E DITOR I A L COMMIT TEE
EDITOR-IN-CHIEFMax Medina, Statoil
DEPUTY EDITOR-IN-CHIEFTodd Benton Willis, Chevron
TWA A DV ISERAnthony Onukwu, Industrial
Technology Facilitator
LEAD EDITORS
Alicia L. Koval, ConocoPhillips
Amir Soltani, Statoil
Anton Andreev, Sakhalin Energy
Carlos Chalbaud,
Gaz de France–Suez
Chike Nwonodi, Shell
Chris Jenkins, Devon
David Vaucher, IHS CERA
Dilyara Iskakova, Hess
Lisa Song, University of Calgary (student)
Manish K. Choudhary,
Stanford University (student)
Manish K. Lal, Chevron
Michail Tzouvelekis, Maersk
Sanchit Rai, University of Tulsa (student)
Tony Fernandez, Noble Energy
Tyler Roberts, Baker Hughes
ASSOCIATE EDITORS
Alex Schmitt, DeGolyer and MacNaughton
Amarachukwu Okafor, Marathon Oil
Arpan Pushp, Oil and Natural
Gas Corporation
Henny Gunawan, Schlumberger
Jarrett Dragani, Cenovus
Jim Stiernberg,
Louisiana State University (student)
Karrie Santos, Chevron
Madhavi Jadhav,
Reliance Industries
Marjan Jamshidi, ConocoPhillips
Matthijs Verhoef, Shell
Melissa Nance, Shell
Paulo Pires, Petrobras
Per Olav Eide Svendsen, Statoil
Prakash Deore, Fujitsu Consulting
Shruti Ravindra Jahagirdar,
Shell Technology India
Siddhartha Gupta, Schlumberger
Siluni Wickramathilaka,
ConocoPhillips
Subhash Ayirala, Shell
Submit your entry today to [email protected]. This contest is open to all SPE members. The two best photographs will be published in each TWA issue. Your image must be in JPEG format, with a fi le-size limit of 4 MB. Submit photograph information with camera specifi cations. Provide your full name with your position, company name, and company location.
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