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The Magazine by and for Young Professionals in Oil and Gas

VOL. 9 // ISSUE 2 // 2013

PUBLIC PERCEPTION

OUR INDUSTRY

An Official Publication of

The Society of Petroleum Engineers www.spe.org

Contents
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Americas Office Office hours: 07301700 CST (GMT5) MondayFriday 222 Palisades Creek Dr., Richardson, TX 75080-2040 USA Tel: +1.972.952.9393 Fax: +1.972.952.9435 Email: spedal@spe.org Asia Pacific Office Office hours: 08301730 (GMT+8) MondayFriday Level 35, The Gardens South Tower Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia Tel: +60.3.2182.3000 Fax: +60.3.2182.3030 Email: spekl@spe.org Canada Office Office hours: 08301630 CST (GMT6) MondayFriday Eau Claire Place II Suite 900 521 3rd Ave SW Calgary, AB T2P 3T3 Canada Tel: +1.403.930.5454 Fax: +1.403.930.5470 Email: specal@spe.org Europe, Russia, Caspian, and Sub-Saharan Africa Office Office hours: 09001700 (GMT+1 ) MondayFriday First Floor, Threeways House, 40/44 Clipstone Street London W1W 5DW UK Tel: +44.20.7299.3300 Fax: +44.20.7299.3309 Email: spelon@spe.org Houston Office Office hours: 08301700 CST (GMT5) MondayFriday 10777 Westheimer Rd., Suite 1075, Houston, TX 77042-3455 USA Tel: +1.713.779.9595 Fax: +1.713.779.4216 Email: spehou@spe.org Middle East, North Africa, and India Office Office hours: 0800 to 1700 (GMT+4) SundayThursday Fortune Towers, 31st Floor, Offices 3101/2, JLT Area P.O. Box 215959, Dubai, UAE Tel: +971.4.457.5800 Fax: +971.4.457.3164 Email: spedub@spe.org Moscow Office Office hours: 09001700 (GMT+4) MondayFriday Perynovsky Per., 3 Bld.2 Moscow, Russia, 127055 Tel: +7 495 937 42 09 Email: spemos@spe.org

VOL. 9 // ISSUE 2 // 2013

Whats Ahead

Perspective from TWAs editor-in-chief, Todd Willis.

TWA InterAct

Responses to TWA content sent via social media.

TWA Interview

Dueling points of view from Ben Ayliffe, head of Greenpeace Internationals Arctic Oil Campaign, and David Blackmon, managing director of strategic communications for FTI Consulting.

HR Discussion Forum

How to use the Myers-Briggs Type Indicator to advance ones career.

10 12 15 18 19 22 25 27 30 32

Results of a poll that sought to understand peoples oil awareness.

Economists Corner

Exploring the financial roadmap of an independents asset.

Pillars of the Industry

Sarah Edman, ConocoPhillips manager of corporate public policy, discusses public perception of the oil and gas industry.

SPE 101

How SPE needs you as a volunteer to help it accomplish all it does.

Discover a Career

Shell Canadas Andrew Chen and Ronald Pagan talk about petrophysics as a career in the petroleum industry.

Technical Leaders

Cairo Universitys Ahmed El-Banbi and Science Based Solutions Geoffrey Thyne give their perspectives on common public perceptions of the oil and gas industry.

Soft Skills

The global gas industrya cleaner energy source needs a smartworkforce.

A YPs Guide to... YP Newsflash

Find out more about what its like in Abu Dhabi, United Arab Emirates.

Interviews with the winners of the 2012 SPE International Young Member Outstanding Service Awards.

Your Best Shot

The best on-the-job photos from reader submissions.

An Official Publication of The Society of Petroleum Engineers www.spe.org

Printed in USA. Copyright 2013, Society of Petroleum Engineers.

Whats AheadFrom the Editor of TWA

Perception is reality.
Todd B. Willis Editor-in-Chief The Way A head

here is a lot of truth to this quotation [which is generally attributed to US Republican Party political consultant and strategist Lee Atwater (19511991)]. People view the world and the events in it through their own colored glasses, tinged with political views, beliefs, and their own personal experiences and history. How else can you explain such widely divergent and hotly contested viewpoints on serious issues like drilling in the Arctic, or topics as benign as the American professional football quarterback, Tim Tebow? No rational person can deny the critical role that fossil fuels have played in the development of our 21st-century world. Yet, this hasnt helped the image of the oil and gas industry. Some of this negativity is deserved. While some industry detractors can never be swayed toward a positive view of our industry, much of the general public has legitimate complaints, worries, and fears about our industry: refinery accidents and explosions, the searing images of crude-covered coastlinesfrom the Exxon Valdez spill of 1989, and a new generation witnessing the damage from the Macondo blowout in the Gulf of Mexico. These are legitimate, and deserved, black eyes for our industry. We must do better to ensure they are neverrepeated. Other negative perceptions are not so deserved. Pain at the pump has entered the lexicon to describe the everexpanding budget item that gasoline has become for the typical American family. But prices are driven by supply and demand, which no industry, not even oil and gas, can hope tocontrol. The right question to ask in response to any problem is: Whats to be done? What can we in the oil and gas industry do to mitigate, or at least address, negative public perception? It starts with engagement. We should not be afraid to stand up for the important role oil and gas plays in our modern economy and our lives. From the heating and cooling of our homes, to our cars we drive on the weekend, to the tires we outfit our bicycles with, oil and gas touches every part of ourlives. It is also important to push back against misperceptions. A common myth is that the oil and gas industry is hostile toward renewable energy. I dont know anyone who doesnt like the potential that renewable energy holds. Whats not to like about a solar-powered car that doesnt require weekly fill-ups at the gas station? Or a geothermally heated house that would save families thousands of dollars every year in electric and natural-gas bills?

Setting aside the fact that the green movement appeals only to some people, saving money appeals to everyone. The problem is that the technology just hasnt fully arrived yet. For the limited applications where renewable energy sources can serve as the primary source of power, there are many other applications, mainly transportation like cars and airplanes, for which we are decades away from finding a realistic fossilfuel substitute. Even hybrid cars still have to plug into a socket whose electrons are ultimately generated by a coal-burning or natural-gas-fired power plant. Finally, we must acknowledge when weve made mistakes. Deny and attack may work in politics, but such tactics onlydeepen the publics mistrust when used by our industry. We must admit mistakes, fix them, and commit to doing better in the future. As part of TWAs attempt to engage in the debate, Im excited that this issues TWA Interview section features a question-and-answer session with two people who champion opposing sides of the debate: Ben Ayliffe, head of Greenpeace Internationals Arctic Oil Campaign, and David Blackmon,managing director of strategic communications for FTI Consulting. This issues Forum section continues this theme by exploring the publics awareness of how pervasive oil and gas products and byproducts are in our society. I hope you enjoy reading these articles as much as I did. You can engage in the conversation as well! One of the easiest ways is by visiting TWAs Twitter, Facebook, and LinkedIn pages and joining (or starting!) a conversation. Werealways eager to hear from our readers. What do youthink is the publics overall perception of our industry? Why does the public have that perception? And what can wedo to change or improve it? Drop us a line. We would love to hear from you. Ill close by saying I always strive to have things both ways. Why not have your cake and eat it, too? In this case, I believe we as an industry are capable of continuing to meet the worlds energy needs, but in a reliable, environmentallyresponsible, and ethical manner. Thesegoalsare not mutuallyincompatiblethey do not represent either/or choices. Importantly, our industry simplymust achieve thesegoals until the energy torch can truly be passedfrom fossil fuels to renewable energy sources.This, more thananything else, will ensure we are doing all we can to dispel negative perceptions of ourindustry. TWA

TWA InterAct

From TWAs Twitter Page

Heres our deputy EIC enjoying some sights during downtime at a meeting in Philadelphia! #libertybell #twitpic

From TWAs LinkedIn Page

We now have almost 500 joining us on our LinkedIn page! Come join in on the discussions!

From TWAs Facebook Page

Thanks for the Likes! Abdessamia Jebbouri Woozy Hoppipolla Alexander Kolesov Carlos Rojas Salazar

Editors Note: Dont let David hog the camera: We know waiting around in the field can be boring... Why not tweet us the sights!

Heres some helpful advice tweeted by a seasoned pro: @SPETheWayAhead: They dont teach this way of pulling stuck pipe in school. It is all about acoustics http://bit.ly/XSClxg. If clicking on the URL doesnt work, try typing it into your browserand youll get the abstract of a very interestingpaper!

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Vol. 9 // No. 2 // 2013

TWA Interview

Dueling Ideologies:
Ben Ayliffe is the head of Greenpeace Internationals Arctic Oil Campaign. He has been at the organization for 10 years and has worked on many Greenpeace issues, from illegal logging to climate change and nuclear power. Ayliffe has a master of science degree in environmental technology from Imperial College, London.

Green vs. the Oil and Gas Scene

In order to frame the public perception conversation, The Way Ahead interviewed two executives at opposing ends of the debate. By asking each of them the same questions, we hope their answers will provide a comprehensive yet unbiased representation of theconversation. disputes, and litigation. We also furnish strategic communications services across all the disciplines, from capital markets to investor relations. Were also the managing contractor for Energy in Depth [a research, education, and public outreach campaign focused on getting the facts out about the promise and potential of responsibly developing Americas onshore energy resource base] communications. I am the managing director of strategic communications and have been a spokesperson for the industry for manyyears.

What is your companys mission and your role in the organization? BA: Greenpeace is an independent campaigning organization that uses peaceful protests to expose global environmental problems and help promote solutions that we believe are essential to a green and peaceful future. Were based on strong principles of nonviolence and bearing witness, so we go to areas where we perceive environmental harm is likely to happen and we take peaceful direct action to stop and/or raise awareness of theissue. My role is to lead the international work on the Arctic. The genesis of my work was the Deepwater Horizon incident in the Gulf of Mexico (GOM) because, up until then, our focus was on unconventionals like oil sands. After the Deepwater Horizon we became increasingly aware of the frontier areas that the oil industry was considering, ultradeepwater and the Arctic, and we started a campaign to expose thoseoperations. DB: FTI Consulting provides an array of advisory services that address the strategic, reputational, financial, regulatory, and legal needs of energy clients. We have extensive experience addressing conflicting regulatory frameworks, power industry restructuring, pervasive contractual

David Blackmon is managing director of strategic communications for FTI Consulting, based in Houston. Before joining FTI in 2012, he had a 33-year career in the oil and gas industry, working on public policy issues for companies such as Shell, Burlington Resources, El Paso Corporation, and Coastal States. From April 2010 through June 2012, Blackmon served as the Texas state lead for Americas Natural Gas Alliance. He attended Texas A&I University and The University of Texas at Austin, earning a BA in accounting.

What is your own opinion of the oil and gas industry? BA: My opinion has unquestionably evolved. One aspect that drives my personal opinion is the high level of access the industry has to government and civil servants. Whether that is perceived to be a bad thing or not by the general public is arguable, but the industry certainly has an influence over public policy. The other driver is the way the oil industry has increasingly cultivated its social license to operate. Today, we see a slick, well-integrated, and high-profile public relations push by the industry. Im struck by the lengths the industry goes to cultivate this culturalpersona through sponsorship of high-brow art galleries, public art spaces, and museums, in an attempt to soften its brand. People who frequent thoseevents are there to see fine works of artand museum exhibits of dinosaurs, so being in that environmentsoftens theperception of a company that could be involved in oilspills in the Niger Delta or in theGOM.

It was no surprise, then, that during the worst of the Macondo incident, BP was pushing this idea that they were sponsoring wonderful gala events and running arts projects in the Natural History Museum [in the UK]. I feel very strongly that these are thinly veiled attempts to detoxify the brand so as to soften the perception of a company and detract attention from the day-to-day realities of life in the oil industry mainly that its a polluting industry with incredible closeness to governments, that undermines action toward climate change, and is involved in spills and social unrest. DB: I think its one of Americasand the worldsmost important industries. In fact, I wish everybody in school had as required reading Daniel Yergins [book] The Prize, which chronicles the history of the industry and how critical the reliability and continued flow of oil has been in every major conflict since the late 19th century. For instance, the main reason why the Allies won the Battle of the Bulge in WWII was because Hitlers supply lines of petroleum for his tanks were interrupted, so they simply ran out of fuel on the battlefield. Important events like that make one realize how critical oil has been to the world for the last 150 years. Yet its a vital industry that continues to evolve rapidly due to the advancement of technology and the need to be conscious about protecting the environment, the latter of which the industry does a better job of all the time but unfortunately does not do a good job of telling its story.

reconsidered during moments of heightened media attention. During events like the Macondo oil spill, there is a lot of public ire as people digest the risks and relaxed attitudes toward safety taken by these companies. The flip side is that we live in an age when people are very attached to their cars. Thats certainly the case in the United States. Also, considering that we live in times of high austerity with mass unemployment, the industry is almost like a necessary evil. DB: I think the publics perception varies by region of the country [in the US]. For instance, although we hear about the low public approval rating nationally, the natural gas industry has an 80%+ app roval rating in Texas. People in Texas understand that its a vital part of their lives and prefer it as a source of heating over electricity because its clean-burning and easy to use. But one is liable to get a different answer from someone in California or New York. Unfortunately, so much of the industrys image has been guided by its portrayal in the news media and in films like Gasland, which have been proved to contain falsities that have nonetheless been incredibly damaging toward public perception. That image of igniting water from a faucet was allowed to be perceived to be caused by a nearby drilling operation, but in fact the people in that area had been lighting their water on fire ever since they had running water because their water table/reservoir sits directly above a coal seam so that methane gas migrates with the water. Indeed, the water has always had methane but no reporters bothered to report that fact and instead the image was burned in the publicsmind. Because its always been a part of the community in Texas, people are cognizant of the negative aspects butultimately understand its positive impact on their lives. When they look at the big picture they realize its an incredibly productive enterprise for theregion.

Why do you believe that industries that involve discretionary spendingrestaurants, retail, computersconsistently rank favorably in public perception polls compared to industries that provide necessities, such as banking, oil and gas, and pharmaceutical? BA: Unlike filling up a tank of gas to drive to work on a Monday morning, only to be greeted by a demanding boss, when I go to a restaurant with my girlfriend its a special moment that I look forward to. What the industry provides is assumed to be part of the mundanity of life in the 21st century, whereas a restaurant is a choice that I make to enjoy myself and one that takes me out of the ho-hum life in London. That said, I think there are deeper perceptional issues of the industry as well. This is an industry with a checkered history of safety and responsibility, and its evident in the way some of the public perception polls have turned out. People tend to not trust extractive industries. DB: Oil and gas, along with banking and pharmaceuticals, provide integral and necessary parts in peoples lives. Theyre fixed costs: You must fill your tank with gas. If the price is high, it hurts the pocketbook. People resent the costs in their lives that they have to bear, whereas going out to dinner is a pleasure activity that is optional and associated with having fun.

Do you think your opinion is in line with that of the general public? BA: I freely admit that I work for an environmental organization and that some would see me as a radical lunatic with a cynical view, but I think it depends on the context of the question. Some people may view the industry as a means to an end and their relationship ends at the petrol station, only to be

What are the main topics shaping the publics perception of the industry today? BA: Three things: energy future, climate change, and risk of accidents. People are beginning to have a discussion about how we will provide our energy needs for the rest of the 21st century. On climate change, our perception, tacit or otherwise, is beginning to influence the public as the phenomenon of climate change

Vol. 9 // No. 2 // 2013

TWA Interview

becomes universally acknowledged. The sense that climate change is happening around us is increasing. The other topic is the risk of accidents. From Deepwater Horizon to Exxon Valdez and other tanker disasters/ crashes, they all resonate with people. Although these may be freakevents that are unpredictable, in the back of peoples minds is this ideathat the industry has been responsible for disasters they see in thenews. DB: The main catalyst seems to be hydraulic fracturing. About 6 years ago, many of the environmental and anti-oil and -gas groups decided to mount a concerted effort to make hydraulicfracturing into a boogeymanin the publics mind. The word fracing has essentially become a curse word in the American lexicon thanks to the media. Theres more disinformation in the public domain today than there ever has been, so its easy to see whythe public perception has become negativeeventhough hydraulicfracturings actuallybeen a blessing tothe country. That said, there are legitimate environmental concerns of which the industry is cognizant and works every day to minimize their impact. For a long time, the process used mostly freshwater, but the industry is beginning to trend toward using brackish water and, in fact, some hydraulic fracturing companies havesuggested to me that within a few years we will be able to do these jobs with brackish water entirely. Although the overall usage by theindustry of water statewide is only about 1%, when the public hears that hydraulic fracturing uses 3 million gallons of water in each fracturing job, it sounds like a lot of water no matterthat in the overall context its a very smallpercentage. Thetruth is that theindustry doesnt want to be ina position where it is competing with people for drinking water, particularlyin times of drought,so the use of brackish waterwill hopefully diminish publicconcerns.

What steps should the industry take to mitigate and/or change how it isperceived? BA: I would argue that theres a lot the industry can shift away from, including increasingly unconventional and marginal sources of oil like pre-salt in Brazil and Arctic oil in the northern Barents Sea, and instead undertake a palpable shift toward spending real capital in energy efficiency and cleantechnology. Its not Greenpeaces role to make the industry better or be perceived to be better, and frankly it would be great if the industry went away altogether because there are serious problems in terms of environmental and social impacts. In an ideal world, wed like the industry to not be here. However, we live in the real world and we realize thats not going to happen, so our job is to engage with the industry when possible to make reasonable points that reasonable people can agree upon. DB: I gave a presentation about 10 years ago at a conference in which I told the audience that our industry was more inept at public relations than the tobacco industry, and I truly believe that. Weve gotten better, particularly in the last 5 to 6 years, and I think weve shifted somewhat the public perception,but it cannot be changed in a radical way in the near term. Its a long-termprocess. Each advertising effort is very costlyand makes a small dent, but they do make a difference because our side of the story goes out to the public for their consumption and consideration in an otherwise biased media. The industry has had a long and difficult relationship with the news media, goingback to John D. Rockefeller, and its only in the last 8 to10 years that there has been a focusedeffort by the leaders in the industry to change that relationship and change how we communicate with the public. Over timeit can be changed, but it takes baby steps.

It seems that environmental organizations and the industry are always on opposing sides of discourse. What would one side need to see from the other? BA: Im not nave enough to suggest that we turn off all the wells and shut down every coal-fired power station, but the environmental effects of the current carbon logic of burning fossil fuels are becoming increasingly hard to argue against. We cannot afford to continue burning and extracting these large amounts of fossil fuels because they are putting us on a trajectory for upwards of 6 degrees Celsius of global warming. Its clear to us, even in the shortto-medium term, that we need to be making a rapid shift toward a decarbonized economy. That wont happen overnight and we accept that, but I dont believe the industrys suggestion that we will need oil and gas beyond 2030 or 2040 or 2050. In fact, if I were a shareholder in an oil and gas company, I would be worried about my money being in a company thats out of kilter with a shift toward de-carbonization and wasnt flexible enough to recalibrate their priorities and capitalize on those opportunities. Wed need to see a real shift, as opposed to hot air, toward a decarbonized economy and see an end to the most reckless exploitation of the marginal sources of oil, such as the Arctic and oil sands. There are also a lot of links between the industry and governments and theyre overall very cozy with each other, so that doesnt do an awful lot to improve public perception and that would need to change. DB: In the environmental movement like any movementthere are people who have good-faith concern and there are groups who are basically no different than the Occupy Wall Street movement, the latter of whom are essentially anti-development groups in the game simply to stop development activities by usingin the case of

environmental groupsenvironmental laws as vehicles toward obstructionism. Unfortunately, the reality is that the radical part of that movement has been infiltrated by the same anarchist elements that infiltrated the Occupy Wall Street movement, and the fact is that you will never satisfy those folks because its impossible to have a meeting of the minds with people who are beyond reason. Its certainly possible to sit down with environmental groupsand Ive been involved in those processesthat are truly interested in finding ways to improve and modernize regulation of the industry. Those groups are out there and they will work with you. They may not agree with a lot but at least theyre willing to sit at the table with you and try to find an approach that everyone can agree to live with. Unfortunately, we do spend a lot of time and energy throwing rocks at each other through the media. The media has become an entity that thrives on conflict. The industry has to figure out ways to live within that system and still be able to get its messages out. Collaborative processeswhenever we can engage environmental groups, academics, and regulatorscan have the biggest impact.

industry, so make sure to think about your companys capabilities of responding to an accident. Question the basic assumption of rushing into the most remote, fragile, and technically challenging areas to extract hydrocarbons. Challenge the fundamental assumptions and join the race to the future toward the technologies that will get us a cleaner and more peaceful world. DB: For those considering a career in the industry, come join us. There has never been a more exciting time to bein this industry, and we will probablynever have a period more exciting than what the next 20 years will be. Oil and gas companies have needs in practically all disciplines, so its a wide open deal for young talent rightnow. For those already in the industry, learn about the issues your industry is facing and take time to follow the various news sources to understand whats out in the public domain. Become an advocate for your companyand your industry. So much ofthe public perception is shaped through conversations that go on inchurches, coffee shops, and townhall meetings. The other side is very well organized and motivated, so their messages, true or false, are wellvocalized and if theres no onethere to answer to the false ones,thats what gets heard. Its important for the continuity of our industry that wedevelop more advocates who arewilling to stand up for what theyredoing. TWA

What advice do you have for young professionals in the industry or considering a career in theindustry? BA: You have seen first-hand the dangers and problems with the

HR Discussion

How to Advance Ones Career, Manage Ones Team, and Become a More Successful Leader: Using the Myers-Briggs Type Indicator
Wendy C. Horikoshi, Prism Coaching
To assist in understanding your leadership style and how you can communicate effectively with others in the workplace, the Myers-Briggs Type Indicator (MBTI) can provide revealing and useful insights. The MBTI can help you recognize that people do not all speak the same language. Understanding the concepts and framework of the MBTI can bridge differing perspectives that affect teamwork and work relationships. It can be a tool to aid in working together more effectively on a project and in helping learn how to promote each others best quality work. It also provides pathways for discovering each others values and needs and for finding avenues for developing oneself. Successful workplace leaders belong to all MBTI types, because the MBTI is a tool only and does not purport to explain everything about a persons thinking or actions. For example, it cannot predict how people will behave; however, it can be very powerful in recognizing patterns of behavior and identifying the multiple lenses people have for perceiving the world and making decisions. Katherine Briggs developed the MBTI philosophy based upon constructs originated by Carl G. Jung, a Swiss psychotherapist and psychiatrist who founded analytical psychology. Isabel Briggs-Myers, Katherines daughter, further developed the MBTI by creating an instrument to help individuals identify their personality type. The MBTI consists of four poles of opposites. Individuals attraction to one side of each pole is referred to as apreference. The four MBTI poles identify ones preferences in the following areas: interpersonal response, taking in data, making decisions, and problemsolvingapproach. Interpersonal response: Are you drawn to the outer world of people and action (extraversion) or the inner world of thoughts and ideas (introversion)? Data intake: When you are learning something new at work, do you prefer data that engage your five senses (sensing) or do you prefer to identify patterns and connections, grasping the big picture (intuition) before learning about thedetails? Making decisions: Do you prefer to decide through objective analysis (thinking) or through how decisions might affect yourself and/or others(feeling)? Problem-solving approach: Do you prefer closure (judging) or process (perceiving)? For example, do you feel most comfortable having things decided and moving toward closure in problem-solving (judging) or do you prefer to keep things open until all data are available before making a decision(perceiving)?

Wendy C. Horikoshi is a strategic coach and leadership trainer. She has served as an adjunct professor in the crosscultural psychology and graduate management programs at JFK University as well as adjunct faculty in the qualifying program of the Association of Psychological Types MyersBriggs Type Indicator (MBTI). Horikoshi is a certified neurolinguistics program coach and holds a masters degree of education in multicultural curriculum from California State University. Prior to independent consulting, she worked as an academician/ administrator/researcher at the University of California youth development programin Alameda County. Horikoshi is a founding member of Prism Coaching: Transforming Perspectives, a multicultural leadership coaching practice. Shecoauthored Teamwork Tools: A Revolutionary Approach for Trainers andManagers and has published research on the MBTI, leadership, and culturalawareness practices.

Interpersonal Response: Introversion/Extraversion

How can the understanding and application of the interpersonal response preferences affect ones leadership, communication, and professional development? Leaders who prefer introversion generally like to think things through before expressing their ideas. When working with persons who prefer introversion, circulating an agenda before a meeting, asking if they would share aloud, and giving more thinking time can encourage more participation and sharing of their ideas.

For leaders and team members who prefer extraversion, it can be helpful to give enough time to talk new ideas out and to check in with each other. Extraverts are drawn to people and action; so working together in the outer world gives them energy.

Data Intake: Sensing/Intuition

Persons with the sensing preference are oriented to the present and tend to speak in factual and concrete language. They generally trust that a person with expert knowledge will give them the necessary information, and they accept the incoming data. They tend to speak in a sequential manner and seem to easily identify tasks and ideas in steps of first, second, and so forth. Their perception scans the environment and takes into account what is realistic and practical. When communicating with those preferring sensing, its helpful to provide a roadmap when expressing the overall goal and to give practical application of concepts. Team members who prefer intuition will readily grasp the big picture, trusting their hunches and data that come to them quickly. Those preferring intuition are drawn to the why of things and generally love to ask and formulate questions. Its important to give the big picture to persons with intuitive preferences as they need the underlying concept on which to hang the details. Persons who prefer intuition appreciate novelty and will often get bored if you want to repeat the same processes without incorporating some new or interesting approach.

In working with persons with the feeling preference, its important to take into consideration values and how the decision affects people. Good leadersmust employ both thinking andfeeling to get the best results to which a whole team will be fullycommitted. Persons of either preference would probably say they want to treat people in a fair way, althoughthe definition of fair may be very different. People with the thinking preference generally define fairness as treating everyone exactly the same. People with the feeling preference are more likely to define fairness as doing whats appropriate for the situation orperson(s).

Problem-Solving Approach: Judging/Perceiving

Persons who prefer judging are more comfortable with employing the decision-making processesthinking or feelingin the outer world. Persons who prefer perceiving are more comfortable using sensing or intuition in the outer world. Qualities that generally accompanyjudging include desire for closure, being scheduled, and beingmethodical. Qualities that can be noticed in persons preferring perceiving in the outer world are being in the moment,spontaneity, and adaptability.

Using Type to Advance Your Career

The MBTI can be a valuable tool in sorting out whats needed to optimizelearning and decision making.The interaction of our preferences is referred to as the dynamics of type. The orientations of extraversion/introversionand of judging/perceivingare paired with the mental functions of how we prefer to learn new things (data intake) and to make decisions. How these four pairs of preferences worktogether provideus with a more specific framework for understandingwhat might be driving our patterns ofbehavior.

Making Decisions: Thinking/Feeling

Persons with the thinking preference tend to remove themselves from the decision-making process and use facts and ideas to weigh and balance potential outcomes. Persons with feeling preference tend to place themselves within the decision-making process, weighing and balancing their values. In working with thinkers, its important to outline objective results.

Once a persons MBTI type is identified, the combination of the four preferences is represented with four letters. The first and fourth letters either E or I as the first letter, then either J or P as the fourth letterrefer to whether ones orientation of energy, extraversion/introversion and judging/ perceiving, is within the outer world or the inner world. The second and third letterseither S or N as the second letter, then either T or F as the third letterrefer to a persons mental functions and how they use their minds. This combination of letters in a persons type code points to a hierarchy in the mental function relied on most, whether it is sensing/intuition or thinking/ feeling. Each type code contains one mental function that is extraverted and one that is introverted. MBTI theory postulates that it is important to focus on our preferences first since they correlate to our strengths. Generally if certain processes are more natural for a person, the individual is more likely to have developed some strength with it. Malcolm Gladwells 10,000-hour theory states that people who are at the top of their game have placed an extraordinary number of hours in that field. It would appear from this theory to be difficult for an individual to spend so much time engaging in an activity if the individual did not enjoy the practice and hadnt developed some capacityinit. When leaders become conscious of the interplay of their own preferences, there can be a kind of security in understanding what they need to do to progress toward their goals. Conversely, comprehension of MBTI type can lead a person to better understand the needs of their team members and/or direct reports. The development of leaders lesspreferred preferences can also help them become more well-rounded in their work and assist in taking on challenging arenas more gracefully.
Continued on page 21

Vol. 9 // No. 2 // 2013

Forum

Oil: What the Public Doesnt See Every Day

Jarrett Dragani and Maxim Kotenev The Oil Life Cycle
Well begin by playing a game, based on a riddle. The following is a description of a word. Your task is to guess the word that matches the description: It exists in so-called reservoirs that have developed over millions of years, and through a process of organic deposition, maturation, migration, and other means has changed into an abundant and dependable energy source on which modern economies are based. Companies explore for it using a mysterious technology called seismic, and follow up their exploration efforts by drilling wells thousands of feet into the ground and using exotic tools called logs to characterize the lithology, wellbore, and fluid. Eventually, after drilling, running pipe, cementing, perforating, and more, the wells are finally ready to produce this magical resource. After a well produces this resource, it must somehow be upgraded atproduction facilities, which can be a simple or intensive process, depending on the resources chemical composition, so it can be transported thousands of kilometers via pipeline (and rail in todays market) to places called refineries. Onlyat refineries can it then be turned into marketable products by means of very intensive processes such as fractionaldistillation and catalyticcracking. It likely took you only a second to guess the word being described is oil. The purpose of the exercise wasnt to waste your time, but to provide an opportunity for appreciating the broad geological timeframe and general level of scale and complexity that precedes the consumption of oil-based products. Given the oil industrys vast scale and complexity, it is no wonder thepublic has formed many negative views.Statistics from a 2012 Gallup survey show that US citizens view the oil and gas business the most negatively of the 25 business sectors identified. In fact, the survey results show a similartrend of negativity for the oil and gas sector over the past 12 years. What is really interesting about the Gallup survey is that the three most favorably viewed sectors are computer, restaurant, and retail, respectively. It makes sense that consumer sectors would rank highly: They generally market to and provide citizens with products that enrich their lives. But there is a disconnect stemming from thefact that a large portion of material and energy inputs that form electronic, food,beverage, and retail products come from byproducts of oil. For example, according to a recent article by National Geographic, Americans purchase roughly 29 billion bottles of water a year. For manufacturers to make all these bottles, it takes close to 17 million bbl of oil, which is almost equivalent to a full days oil consumption in the US. More than 2.5 million tons of carbon dioxide are produced bottling that water, and the plastic produced has a higher calorific value than that of sub-bituminous coal. Another example recently cited from a French online encyclopedia claims it takes 312 L (1.96 bbl) of oil to produce the materials needed for an average 24-kg computer and 612 L (3.84 bbl) to transport it to market.

The Oil Dilemma

Oil is undoubtedly a lynchpin of the worlds economy. Oil is the worlds most widely used source of energy, accounting for 40% of global energy consumption and an astonishing 96% of the energy used in the transportation sector. Yet even if we were to remove all gasoline- and diesel-powered vehicles from the roads, we would still be dependent on this hydrocarbon. One of the first applications of oil, dating back thousands of years, was as a medicine. Nowadays the most surprising uses include chewing gum, lipstick, and aspirin. Every barrel of crude oil holds remarkable potential: It helps keep us warm, helps keep us on the go, and provides the building blocks for countless products we take for granted. Plastics are a great example of this, with water bottles a notable illustration. Although there is a growing interest in the use of biomass as a feedstock, fossil fuels today form 99% of plastics raw material base.

Jarrett Dragani earned a BS degree in mechanical engineering with a specialization in energy and the environment from the University of Calgary. He currently works for Cenovus Energy as a mechanical engineer supporting design and construction of the Christina Lake Oil Sands Expansion and has 3 years upstream experience working across various sectors of the industry in western Canada. He is a member of the SPE Calgary Section board as well as an editor for SPEs The Way Ahead.

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Do you think that a computer screen is made of oil constituents?

90% Portion of oil Yes Not sure No 75% 50% 25% 10%

Roughly, what portion of produced oil is used for gasoline production?

Roughly, how much of the worlds transport depends on oil?

100% 20% 40% 50% 60% 80%

0%

5% 10% 15% 20% 25% 30% 35% 40% Answers

Fig. 1 Some of the oil awareness survey results.

So what would happen if humankind were to freeze oil production tomorrow? What would happen to plastics and other materials if oil production were to cease? At this time of high oil prices, due to scrutiny of reserves and exceptionally high growth in energy, these questions need to be asked moreoften. Production of light plastic products, replacing traditional materials to reduce weight and fuel consumption, uses far less energy than traditional materials. Remarkably, even renewable energy sources are only viable with the use of plastics. Both solar panels and wind turbine rotors contain plastics. Another example would be the greenest means of transport, cycling. A total of 18 different plastics are used in the average bicycle. Some, offering durability superior to metal, are used in gears and pedals. Others make seats and handlebars more comfortable. The comfort and shatter-resistance of helmets is achieved with the use of liquid hydrocarbon foam polystyrene. Where does all this plastic go when were done with it? According to the United Nations Environmental Program, global plastics consumption rose from 5.5 million tons in the 1950s to 110million tons in 2009. A similar trend can also be noted for plastics disposal. In fact, Peter Jones, a British waste expert, predicted in 2008 that UK landfills might be mined for plastics and oceans scoured for the material within a decade due to high raw material prices. The Earth Institute at Columbia University claims that if all the plastic in US landfills were processed into liquid fuel, it could

power all the cars in Los Angeles for ayear. Lets be clear on something first and foremost: Oil will not run out completely for a very long time. As we have seen recently, when oil becomes increasingly scarce (both regionally and globally), prices rise to the point at which economies can no longer afford it for all applications. It becomes an economic hindrance for industries that utilize oil as a feedstock, increases prices at the pump, and eventually the everyday consumer starts to see prices rise for oil-derived products. In his book The World in 2030, futurologist Ray Hammond predicts that in the future oil will not be burnt away and wasted in energy and transport but reserved for high-value processes and products such as plastics manufacturing and energy trapped within the plastics can either be recycled or recovered and used for heat generation.

Oil Awareness
So the question that arises is: Is the public aware of the end uses of oil? Whose responsibility is it to make the public aware of all the end uses of oil?

To help empirically explore these questions, we distributed a survey among respondents from Canada, the US, and various EU member states. To help support a true public view, 80% of the respondents selected had no oil industry work experience. When asked what color comes to mind when they think of oil, almost all respondents indicated that oil is either black or brown, likely a depiction stemming from vivid images of oil spills such as those resulting from the Macondo blowout and Exxon Valdez disaster. Almost 90% of respondents guessed that the nearest oil facility was less than 300 km from their home and upwards of 70% of respondents felt that oil was not in short supply, as defined in the question as less than 20 yearssupply. So in short, it would seem that the respondents are fairly well educated about oil, and indeed theyare. But some results indicated the existence of a disconnect. Respondents had difficulty categorizing how much
Continued on page 29

Maxim Kotenev is a reservoir geoscientist at Fugro Robertson in the UK. Previous responsibilities include geological and reservoir engineering work with Lukoil, Rosneft, and Technical University of Berlin, Germany. Kotenev was president of the Ufa SPE Student Chapter and currently serves as vice-chair of the SPE London Section YP Committee. He has coauthored 15 technical papers. Kotenev earned BS degrees in petroleum engineering and petroleum economics and management from Ufa State Petroleum Technological University, Russia; an MS degree in petroleum geoscience from the University of Manchester, UK; and a PhD in petroleum engineering from the Academy of Sciences, Moscow.

Vol. 9 // No. 2 // 2013

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Economists Corner

Financial Roadmap of an IndependentsAsset

Marc de Saint Gerand, Standard Chartered
Finance theory is based on a very simple principle: Reward is a function of risk. In other words, when comparing two investmentstwo assetsthe riskier one should serve a higher return (yield) than the other. A fair and efficient market is, by definition, a market that serves an adequate level of return for a given level of risk. The reality of finance is obviously somewhat different, and even though we understand the definition of a transparent and efficient market, we still have not witnessed a pure and perfect market. This is probably where finance and geology meet: Neither is a purescience. Although we all know our stated equations, we struggle in our everyday job to approach the perfect system (be it a financial or a hydrocarbon system). Even though risk/reward theory can be challenged (as evidenced by the abundant number of academic papers addressing the inefficiency of the market), it remains a powerful paradigm to understanding the basics of finance, how funding flows into the oil and gas business, and ultimately how money is made available to companies exploring, appraising, and developing oil and gasassets.
Debt Risk Hybrid Risk Equity Risk Successful Exploration Successful Appraisal Development Production

Capital Required

Source: Courtesy of Cove Energy.

Time

Fig. 1 Project life cycle. Courtesy of Cove Energy.

Financing Assets and Companies at an Early Stage: The Equity Stage

From an investors point of view, an assets life cycle can be simplified into four main stages: exploration, appraisal, development, and production (Fig. 1). Every stage carries its own intrinsic risks and therefore attracts differentinvestors. Investing in an asset starts with the exploration and appraisal phase. Typically, the asset is still very immature. A company might own an exploration license and a few km 2 of

Marc de Saint Gerand is a director in Standard Chartereds oil and gas project and export finance team. He focuses on structuring and advising on project finance and limited recourse financing in the oil and gas sector, with a dedicated focus on liquefied natural gas. De Saint Gerand previously worked with the European Bank for Reconstruction and Development and with Merrill Lynchs Energy and Power team. He started his career as an economist at Totals Gas and Power division in the companys Paris headquarters and in Doha, Qatar. De Saint Gerand holds an MS in public affairs from Sciences-Po and graduated from the HEC Paris School of Management. He regularly teaches petroleum economics and project finance at Institut Franais du Ptrole (IFP School) and Sciences-Po Paris.

seismic. Even though it is early in the life cycle, management is already looking for further funding. Its time to meet the equity investors. During the exploration and appraisal phases, the developer will be able to raise financing mostly through the equity channel. Equity investors are generally aware of the limited success rate, but are very keen to play the game nonetheless. In these phases, investors will focus on the potential of the asset. For instance, a recent study of international independent exploration and production (E&P) companies highlighted an average drilling success rate of around 35% for wells bearing commercially recoverablehydrocarbons. Similarly, Schlumberger concluded that two out of three wildcat wells in frontier environments are unsuccessful. Nevertheless, investors know a commercially successful well can generate massive revenues that will largely cover their costs, and they appreciate that independent E&P companies can offer higher shareholder returns. For instance, stock market analyses have shown that the E&P

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sector has recently overperformed market indexes in difficult times. US independent E&Ps in 2010 were providing shareholder returns of 41.5% year on year, while the Dow Jones Index was yielding 11% during the same period. On the UK market, for the same period, the main index grew by 5%, whereas UK independents were growing by 13%.

6,000 5,000 4,000 3,000 2,000 1,000 0

(GBP Million)

Equity Funding the Early Stage: Big Risk, Big Returns

An equity investor willing to play the appraisal and exploration game is likely to be funneled through two main channels. On the private side, the investor will bring funds into a company in exchange for not-publicly traded shares that generally represent a fairly illiquid security. The process is generally done over the counter at a price negotiated between the company and the investor. Most independent E&P companies will use this route at first, attempting to gather a group of sophisticated investors with sufficient fire power to finance the early stages of exploration. At this stage, management is very likely to represent a significant part of the shareholding. On the public side, the investment is done through a stock market. Listed securities are by definition more liquid and investors are generally free to sell at any point. E&P companies generally do not go to the stock exchanges at first; they usually strengthen the management, build the equity story, polish the message to investors, and improve their understanding of the asset prior to launching an initial public offering (IPO). Raising money in an exchange, however, is an extremely powerful tool and can seriously increase the pool of liquidity for a company. But it does carry a fair amount of workgovernance, transparency, regulatory obligations, and the like. Some of the most successful independent E&Ps have managed to go through this channel and listed their company (Fig. 2). Companies will generally be listed after a couple of years, during which

2002

2003

2004

2005

2006

2007 IPO

2008

2009

2010

2011

Source: SCB Analysis, London Stock Exchange.

Equity issues

Fig. 2 Oil and gas companies listed on the London stock markets. Source: SCB Analysis, London Stock Exchange.

they establish an exploration and appraisal track record and become operational. For instance, when Kosmos went for its IPO in 2011, it had gone through significant changes since the 2003 step-in of two large private equity funds. In 8 years, the company managed to discover a world-class asset, funding its development through nonrecourse financing such that it was successfully listed on the New York Stock Exchange (NYSE) shortly after first oil.

Development and Production Stage: The Funding Mix

When the exploration and appraisal phase is successfully completed, the asset matures into the development stage. Investors will expect an asset to reach the development stage when the field development plan is approved (a regulatory event) or the final investment decision, FID, is taken (a sponsor decision). The projects financing generally morphs during this time, as operators begin to look for debt investors rather than equity investors. In other words, instead of offering a piece of the pie to investors in exchange for capital, operators look for loans to fund the project. At this stage, investors believe key uncertainties about the reservoir have been cleared and that the asset does bear commercial amounts of hydrocarbons. They consider the residual risk to now lie in the construction execution and the

production technology selected. Success of the project will transition from being dependent on geologic data interpretation to becoming a function of the capacity of the engineering procurement and contracting team, and the contractual strategy between the oilfield services company and the sponsor. This type of risk will attract investors from a wider horizon and represent a larger liquidity pool. An important number of banks might be keen to provide debt funding at this stage. As an example, liquefied natural gas developments might attract up to 75% of debt 3 or 4 years before first gas is produced. First oil or gas demarcates the beginning of the production stage, during which the level of risk continues to reduce significantly as the reservoir becomes better understood and operations are up and running. In turn, these milestones can attract a larger diversity of debt investors (such as banks and funds). Indeed, the debt market has proved over the last decade to be a strong supporter of the oil and gas industry. As debt financing focuses on discovered and appraised fields, it allows the operator to further develop and/or leverage world-class assets. Contrary to equity investors who focus on performance and tolerate volatility in exchange for probability of upside, debt holders generally expect a steady, predictable flow of revenue, or fixed income. The flow of revenue
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Economists Corner

is usually an interest rate based on the cost of risk-free assets (much like government gilts in the UK or T-Bills in the US) and includes a risk premium reflecting the strength of the borrower. Unlike equity holders, most debt issuers have to have a long-term horizon. Debt investors could actually grant a loan to an independent E&P for more than 5 years, and they will have to work together, with limited opportunity to exit before the end of the facility. Therefore, debt holders will generally base their valuation on more conservative and longer-term assumptions. In other words, when granting a 5- to 7-year loan, a bank will check that, under a conservative long-term oil price scenario, the asset will have the capacityto repay the value of the loan plus interest.

From Theory to Practice: Impact of the 2008 Crisis

Since 2008, the funding market has changed. After 10 years of relatively easy access to funds, the market shrank considerably within a fairly short period. Beyond the macroeconomic impact, the repercussions felt by independent E&Ps were very much a function of their assets development stages and the trust built between investors and the management team. During challenging times, markets generally experience a flight to quality whereby companies with a reasonably proven basis still manage to attract funds but companies overweight in pure exploration suffer from a scarcity of resources. Investors are likely to back companies with the best management team, superior assets, and best-in-class track record and in turn reduce their exposure to riskiercompanies. Crises like the one in 2008 separate independent E&Ps into two major types. On the one hand, growing independent E&Ps that were overweight in assets at an early stage with littleto-no production became more and more inversely leveraged to oil. In other words, they became subject to a double negative impact: an increasing cost of drilling and development, with

direct competition from producing assets, together with a funding market becoming more and more risk averse and selective. On the other hand, E&Ps benefiting from asset portfolios with existing production bases still enjoyed reasonable access to funds. For example, E&P independents Kosmos Energy and Tullow Oil managed to tap both the equity and the debt market for significant amounts. Tullow managed to complete a USD-72.3-million secondary listing on the Ghana Stock Exchange in July 2011 and comfortably sits on USD 3.95 billion of debt facilities (out of which USD 730 million were drawn during the first half of 2011). Kosmos, in turn, managed to raise around USD 600 million on the NYSE and secured a USD-2-billion debt facility in early 2011. It would appear that current debt and equity markets are not closed for business; nonetheless scarcity of capital has forced key players to invest more selectively and to re-focus on their core businesses/clients.

Beyond MarketsPeople
Beyond the jargon, funding markets reflect a simple asset analysis: equity in the early stage followed by debt, with some hybrid instruments in between (such as convertible and mezzanine). As demonstrated by the market over the last 3 years, E&P independents are facing new challenges as they are forced to go beyond understanding what tools are available at each development stage and now have to entertain a network of investors ready to back them during good as well as more difficult situations. Therefore, the constant challenge for independent E&Ps is less to get the magical sources of funds, but rather to identify which market to access or which investor or bank is likely to understand its business and be available to be mobilized at each stage of development. In other words, to maximize value for its shareholders, the management of an independent E&P will have to regularly beat the street to source the most profitable source of liquidity for each stage of its development. TWA

Pillars of the Industry

Public Perception of the Oil and GasIndustry

Sarah Edman, ConocoPhillips
I started my career in 1978 working as a summer intern at Conocos refinery in Wrenshall, Minnesota, just outside Duluth. That was the year the US saw gasoline prices streak past a once-unimaginable USD 1/gal as the Iranian revolution caused work stoppages, interrupting oil flow. Price controls led to outages at the pump and motorists across the US were furious as they waited in long lines for fuel. The Organization of the Petroleum Exporting Countries (OPEC) was viewed as powerful enough to control the future. Outside OPEC, the oil industry was dominated by a handful of integrated major oil companies. Suffice it to say, the industry was mistrusted and misunderstood. So whats changed over the last 35 years? Well, I think some things have changed a lot, some not so much. store where an attendant checked the oil, washed the windshield, and filled the tank. There was no gasoline at the grocery store. But change was coming. In the US, environmental issues were growing in importancethe first Earth Day was in April 1970 and US President Richard Nixon signed the Clean Air Act that December. In 1974, US President Gerald Ford signed the countrys Safe Drinking Water Act. Gasoline prices in the US tripled that decade and oil demand, particularly for power generation, plummeted. New regulations were passed in the US requiring extensive environmental assessment, air emissions reductions, better water and waste management, respect for biodiversity, and progress on social issues. When world oil prices later fell in the 1980s and 1990s, oil and gas companies merged to gain economies of scale and better compete with emerging super-sized state-owned oil companies. As conventional petroleum resources became depleted and access became increasingly restricted, technological innovation enabled oil and gas field development to shift from the preferred easier, lower-cost onshore plays to deepwater, Arctic, and other challenging environments. In the first decade of this millennium, world demand for oil and gas climbed quickly due to rapid growth in emerging economies and supplies tightened, exacerbated by conflicts in the Middle East. World oil prices rose again and many pundits forecast that oil and gas production would soon peak. Economic and environmental concerns led to public protests, marches, and media backlash. By contrast, our industry is now in the early stages of a transformation in which shale resources, long recognized but previously uneconomic, can in the US be developed in enormous volumeswith prospects uncertain and perhaps promising in other countries bringing jobs to suppliers, producers, and users, reducing utility bills, and offering hope for energy security improvement and economic growth and renewal throughout the world.

Historical Context
When I learned to drive in the early 1970s, US gasoline cost less than 40 cents/gal and came from a branded

Sarah Edman is the manager of corporate public policy for ConocoPhillips. Her responsibility is to develop company positions on government policies, regulations, and other public interest initiatives that could materially impact ConocoPhillips assets, business activities, reputation, and stakeholders around the globe. The primary objectives of her group are to align advocacy messaging globally, reducing the likelihood that external influencers will significantly disrupt or have material negative influence on ConocoPhillips ability to conduct business. Over her 33-year career, Edman has held a range of positions, including manager of carbon capture and storage policy and project development, manager wholesale marketing and general aviation, manager North American natural gas liquids, refinery operations manager, business development manager power, downstream planning manager, director corporate strategy, economist, and process engineer. A native of Iowa, Edman graduated with a bachelors degree in chemical engineering from Iowa State University. She continued her education with graduate studies in finance and business administration.

Performance and Perception: Ongoing Issues

The petroleum industry does have a public perception problem. We live in a Twitter world where 24hour news lets anyone be a critic: wannabe journalists using YouTube or bloggers who believe renewables can immediately replace fossil fuels. And the oil and gas industrycompounds the problem if it doesnt deliver strong safety, environmental, and community engagement performance. We dont have to look far for sources of public mistrust: 1. The oil and gas industry was born amid controversy, dominated by
Vol. 9 // No. 2 // 2013

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Pillars of the Industry

the Standard Oil Trust. Although the Standard Oil monopoly was broken up more than 100 years ago, the scale of todays industry and its large firms continually lead some to question whether competition actually exists now. Billion-dollar investments and profits are hard to comprehend. A few families became incredibly wealthy and we still see their names associated with wealth, philanthropy, and power. 2. The industry has boom-andbust cycles, often amplified by regulatory responses. It has witnessed job losses during the busts and unequal distribution of benefits during the boom times. All are incomprehensible to the public and they affect certain communities disproportionately. 3. The industry has had memorable performance problemsthe Santa Barbara oil spill in 1969, the Piper Alpha platform explosion in 1988, the Exxon Valdez oil spill in 1989, and the Macondo blowout in 2010, to name a few. The industrys ability to prevent and respond to these environmental and human disasters has not met public expectations. 4. Oil and gas are perceived as old-world industriessmelly, slow to adopt new environmental technologies, often in denial about climate change, and stalling a rapid transition to a green economy. 5. Gasoline prices are in your faceprominently displayed on the street and adding up quickly as we fill our tanks. The general public does not trust markets to respond appropriately nor does it understand the link between prices and global and local markets. Especially in the US, gasoline makes up a significant portion of household disposable income for many familiesa major concern because, for many, there is no readily available transport alternative.

6. The industry seems filled with technically oriented introverts most comfortable with quantifiable measures who believe that facts and calculated risk weightings should carry the day. It appears to have less appreciation for the importance of feelings, fears, and relationshipdevelopment.

The Industrys Response and Challenge

The oil and gas industry has responded by upping communication; regular polling shows that the effort to share information about what it does to protect the environment, pay taxes, and create jobs is beginning to resonate with the public and our reputation is improving. Public trust in the oil and natural gas industry has continuously increased from a low of 38.6% in 2006 to 48.5% in 2012. Did you know that shale energy development has created 1.7 million jobs in the US over the past few years and is expected to account for 3 million jobs in the US by 2020? Or that, according to the US Environmental Protection Agency, there have been more than 2.5 million hydraulic fracturing treatments completed globally without a single confirmed case of water contamination related to hydraulic fracturing? Also, our industry pays one of the highest effective tax rates among US businesses, averaging 44.3% from 2006 to 2011 according to Standard & Poors. Alleged subsidies in the US in fact are identical or closely analogous to tax deductions provided to a wide range of industries. The industry can and must do better. SPE members can help improve the industrys reputation. We must learn to listen first, understand issues and concerns, then respond by sharing facts, doing additional research, reporting progress, and continuously improving. Our performance must be unassailable and visiblewe must set the standard for safety and protection of health and the environment, all while delivering competitive returns to ourshareholders.

This is not easy and requires competencies that we have not historically demonstrated at a sufficient and consistent level. The public expects a two-way conversation; we must be visibly listening and caringnot just issuing 60-page white papers. We must equip employees, contractors, and suppliers alike with information and training so we can engage in a fruitful dialog with family members, friends, and associates. We work in a business whose basic purpose is noble, and we should be neither apologetic nor arrogant. When we make mistakes, we must report quickly and transparently with clear plans and commitments to reduce the chances of a recurrence. And we must learn from each other to raise the bar for the wholeindustry. We must move beyond rhetoric and become valued members of the communities in which we operate. Yes, our business is complex and it is global. Yet it is also local. ConocoPhillips holds tours of our Eagle Ford operations in Texas for stakeholders from around the globe, engages with regulators, and works with other companies to address water issues. We live in an AND world: We can improve quality of life by delivering reliable and affordable energy supplies while also protecting the environment AND creating jobs AND improving community life. Our industry is hightech and excitingwe have a bright future. We need to share and applaud progress when we reduce our air, water, and land footprint while working with universities, regulators, and civic leaders to address growing challenges and expectations. We can be engaged without seeming arrogant, dismissive, or defensive. The oil and gas industry faces opponents who are well-funded and well-organized but sometimes not well-informed about the petroleum industry. Despite the apparent unfairness of their approaches, we cannot abandon our principles. The scientific methodestablishing testable, repeatable results that demonstrate cause and effectis

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important. Yet we can also seek diverse views and respond to questions in more easily accessible ways. Emotions matterwe must be prepared to address fears, mistrust, and negativity in constructive ways and encourage fact-based dialog. Relationships are built on trust and take more time to build than lose. SPE helps with its Energy4me educational outreach program to engage kids in schools and help educators learn more about the oil and gas industry and how it responsibly finds and delivers oil and gas to consumers. We can each start by educating ourselves. Take advantage of the myriad websites devoted to providing information on the issues and get smart about both sides of contentious issues. Sites that our industry views as factual are provided by the US Department of Energy, the American Petroleum Institute, the International Energy Agency, and most international producers. Take time to ask questions and find out what your company is doing to be responsible in its planning, operations, and community interactions. Watch Switch: The Documentary and visit Switch: The Energy Project educational website. See the more visceral views expressed in films like Gasland, Promised Land, Truthland, and Fracknation. Explore the Energy in Depth site to learn more. Evaluate the claims of each based on your training and the bounds of science. When a social acquaintance expresses fear about the oil and gas industrys activities, take a deep breath, ask questions, listen, and be ready to share

what you and your company are doing to address concerns. We are part of a continually learning and evolving industry that is committed to operate to high standards, regularly verifying compliance and engaging effectively. Our industrys ability to operate relies upon our performance AND the publics perception. At a recent family reunion in Iowa, my cousin from California asked what I thought of the stories about fracturing and environmental mayhem possibly coming to California. I had to stop myself from launching into a diatribe citing my recent visit to a wellorganized drilling and completion site, my companys commitment to responsible development, and the economic benefits for consumers in a state badly in need of revenue. Instead I asked, What are you hearing? This opened a conversation about the industry, sources and validity of information, and ways to consider messages and the motivation of the messengers. We have moved from a 20th-century view of constrained resources and limited opportunities to abundant resources but constrained public support. Genuine and respectful curiosity, patience, performance, and proactive behavior can humanize our industry and improve public perception. We do live in a new world where there is little tolerance for error. Wouldnt it be great to have a video go viral about our industry creating a million jobs in 5 years without an environmental incident? Id like to Tweet that. TWA

SPE 101

SPE Needs You, and You Need SPE: Why and How to Volunteer
Thresia Nurhayati
Have you ever thought about how SPE accomplishes all it does? Meetings, conferenceseven the magazine youre holdingall are created largely through volunteer efforts. The passion and dedication of these volunteers are essential to making SPE function and helping it grow. On top of their regular jobs and personal lives, why do thousands of volunteers around the world share their time and expertise helping organize events and promote SPE activities? These professionals understand that, in addition to being an opportunityto give back to their communities and to their industry, SPE service yields a number of professional and personal benefits. How so? Readon. Every SPE member knows the power of networking. As the public faceof SPE, volunteers have an enhanced opportunity to meet new people, make friends, and develop contacts that are beneficial both personally and professionally. Yufa Safitri, Balikpapan Section vice chair, says, Balikpapan is a tight-knit oil and gascommunity. By volunteering with SPE I get to know many professionals of various backgrounds from different companies. As volunteers move out of their comfort zone, they often discover meaningful, long-lasting friendships in addition to the anticipated professional exposure to new techniques and technologies. Since SPE is an international organization, many events involve coordination among people with significant differences in education and cultural background. Often volunteers work together across oceans and time zones. It can be quite a learning experience to discover how to negotiate all these elements to pull off a successful event! Volunteers learn to appreciate other team members views and strong points, working together to deliver resultsall of which make these volunteers more valuable to their employer in their day-to-day job. SPE volunteers also learn to refine their communication and presentation skills, showcasing their ideas and gaining their colleagues support. They gain confidence from presenting in publicpracticing reading an audience and leading discussions to keep listeners engaged. Natasha Legge-Wilkinson, YP Committee member in the New South Wales SPE Section, says, It can be quite unnerving to hold a presentation for high school and college students. Over time Ive gotten a better hold of it. Ive also learned to find means to pique their interest and to encourage theirparticipation. SPE is an excellent forum for YPs to practice and improve timemanagement skills. For instance, since it can be difficult to schedule meetings with several volunteers, YPs learn to treat time with team members as precious. YPs also learn the importance of accomplishing tasks without holding up others. Most importantly, since volunteer YPs are balancing professional, family, and SPE obligations, they learn how to prioritize, stay focused, and get things done efficientlyvaluable skills that come in handy in the professional environment. SPE always needs volunteers to coordinate details of conferences and other events. Most companies support attendance for those serving on event committees, so you can increase your chance of attending technical conferences and forums through volunteering. Some sections even have programs to send exceptional volunteers to these events as a recognition award. Typically, YPs do not get professional leadership opportunities until several years into their career. Within SPE, YPs can begin serving as leaders after little time in the industry. It isnt unusual to see members of YP committees or section boards with only 1 to 2 years industry experience. And volunteers can quickly progress to significant leadership roles in the section or on other SPE committees. When it comes to rsum-building and performance reviews, SPE service is usually considered a positive point. Volunteers burnish a companys public image, build their own skills and experience, and raise their profile as self-starting individuals willing to go the extra mile. That said, its critical to remember that professional duties come first. Its critical to ensure you have your supervisors support before taking on SPE volunteer roles. As SPE grows, so does the need for new and continuing volunteers. Is there something you think your section should try or something that could be done better? Take action! Active volunteers forge SPEs path forward in concert with othermembers. The best way for YPs to start volunteering is by getting in touch with their local SPE section, which almost always has an ongoing need for help with regular section functions, local conferences, fundraisers, and so forth. At SPE events, ask about opportunities, or visit www.spe. org/sections for officer contact info. YPs who want to further expand their participation can check www.spe. org/volunteer to review additional opportunities. Have you volunteered with SPE? If not, what are you waiting for? TWA

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Discover a Career

Discover a Career: Petrophysics

Andrew Chen and Ronald Pagan, Shell Canada
Petrophysics is the study of the properties (physical, electrical, and mechanical) and the rock/fluid interactions of petroleum systems. In the oil and gas industry, the geologist and the geophysicist set out to define a reservoir prospect target from a structural perspective, while the petrophysicist fills in the details regarding the reservoir rocks fabrics and fluid content. They achieve this by collecting data at the drilling stage using drilling, logging, coring, and testing tools for measuringat bottomhole or surfacerock and fluidproperties. possible. Table 1 gives a peek at the petrophysicists usual toolkit and job description, where every action item is about a direct touch with the reservoir rocks and fluids. The petrophysicist participates at the drilling stage by examining rock chips and cuttings brought to the surface by the drilling mud and recording oil and gas shows at the borehole for all respective lithological and stratigraphic intervals. Then, logging-while-drilling (LWD) or a wireline-logging program, designed by the petrophysicist, is used. This should enable him or her to identify pay columns, differentiate oil-/gas- and water-bearing formations, and estimate porosity and hydrocarbon amount. Because wireline logging means sending measurement equipment downholetypically into a deep, dark, and dirty environment, where drilling mud causes near-wellbore invasion and logging tools suffer from problems of resolution, shallow reading, or ambiguous responsea handson approach with the rock fabric is required. The petrophysicist orders coring jobs and brings full-diameter core barrels or side-wall core plugs to surface. Core analysis is performed in a laboratory. Conventional core analysis not only validates lithological sequences and depositional environments but also gives details regarding rock mineralogy content captured in the prior log interpretation panel. Laboratory analysis of core samples also gives an independent assessment of porosity and permeability, which is used to calibrate log-based interpretation models. A typical product exhibits tracks of gamma-ray, caliper, and neutrondensity porosities; resistivities of different invasion depths; core porosity and permeability; and perforation recommendations. This leads to further evaluations of key pay intervals and estimations of their flow potentials. If the discovery wells preliminary assessment is encouraging, appraisal wells may be drilled to quantify the reservoirs lateral and vertical extent. The petrophysicist will build crosssection models; delineate spatial distribution of each stratigraphic interval; and characterize the reservoirs quality, extent, and integrity. Only two technical numbers usually matter for oil companiesresource/ reserve volume and production output. The petrophysicist is expected to eventually help come up with the best estimate and sensitivity analysis of hydrocarbons-in-place, known as stock-tank oil initially in place/initial gas in place (STOIIP/IGIP). These estimates paint a picture of the reward size so business decisions can be made to either carry on exploration and appraisal activities or de-risk them by farming out. The STOIIP/ IGIP estimation exercise demands the petrophysicists best judgment on a handful of key parameters that speak for the reservoiraverage porosity, pay column height (gross and net), initial hydrocarbon saturation, and fluid contact level.

What Does a Petrophysicist Do?

The search for hydrocarbons begins with a regional understanding of the prevailing geology in a geologic basin, where the geologist gives an account of sedimentary sand deposition. After the geophysicist conducts seismic surveys and data processing, risky wildcat exploration wells may be drilled to test the best geological and seismic structural model. If a hydrocarbon discovery is made, data must be collected to evaluate the scale, quality, and quantity of the discovery. The petrophysicist then steps in, performing tasks that have direct bottom-line significance. The petrophysicist needs to use all of the wells directly measured data, which can be very limited, to construct as robust a reservoir model as

Andrew Chen works with Shell Canada on various light tight oil and liquids-rich tight reservoir projects, including business development, exploration drilling, and asset maturation activities. He has more than 20 years professional industry experience at BP, AJM Deloitte, and Schlumberger, and as an international consultant. Chen earned BS and MS degrees in petroleum engineering from East China Petroleum Institute and a PhD in mechanical engineering from the University of Manitoba, Canada.

Petrophysics vs. Formation Evaluation

For any discovered hydrocarbon volume, only the producible portion

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Discover a Career

Table 1Petrophysics Data Domains and Subsurface Collaborations Category Mud Logging/Drilling Data Type and Source Pore pressure predictions; gas or oil shows during drilling; drilling-mud and cuttings analysis Mechnical logs (calipers); electric logs (laterlog, induction, spontaneous potential, resistivity); natural-radiation logs (simple and spectral gamma rays); artificial-radiation logs (density and neutron); acoustic logs (sonic); image logs (dipmeter, micro-image resistivity); special logs (NMR); temperature log Mineralogy, lithology; hydrocarbon shows, porosity, permeability; SCAL (wettability, capillary, core flooding) Ownership Wellsite geologists/ reservoir engineers

Well Logging and Log Interpretation

(mostly openhole wireline logs, but increasingly LWD)

Primarily petrophysicists

Coring and Core Analysis

Primarily petrophysicists, with geologists and reservoir engineers

Formation Testing and Sampling

Formation testing for pressure stratigraphical profile; fluid type validation and sampling; drillstem or production test

Reservoir engineers

Cased-Hole Logging

Production logging (pressure, spinner, densimeter); formation evaluation logs (neutron, acoustic, Production/reservoir cased-hole resistivity); casing/wellbore integrity engineers logs (bond logs, temperature, ultrasonic)
core analysis (SCAL) offers details of capillary pressure behavior, wettability patterns, favorable/unfavorable production drive mechanisms, and laboratory-based recovery efficiency assessment under conceivable development options. Even with the static nature of log interpretations and the lack of in-situ reservoir conditions in laboratory work, all the petrophysicists work is accepted by reservoir and production engineers, who turn to focus on the dynamic or flow nature of formations. A flow test is designed and carried out to observe the wells flow capability and formation productivity index. Flow and pressure buildup data are analyzed. Good interpretations mean that the data from the flow test are explainable by the petrophysical view on pay thickness, average porosity, hydrocarbon saturation, reservoir container setup, and other descriptions. Well testing is sometimes performed to detect the minimum connected drainable hydrocarbon volumes, if STOIIP/IGIP cannot be determined, in order to pass certain business hurdles. Such exercises require a tremendous integrated effort both from geoscientists and from engineers to reconcile and explain the volume differences betweena seismic container and a hydraulically drainablecompartment. In order to optimize the development options of an established asset, the reservoir engineer builds

counts. This is where the petrophysics discipline meets the formation evaluation discipline. Addressing the producibility of part of or the whole reservoir and evaluating recovery efficiency ultimately provide values for the recovery factor and productionoutput. The petrophysicist provides qualitative descriptions of pay potential from log and core analysis. Routine core analysis identifies goodquality porosity, porosity types, permeability statistics, and possible natural fractures. Special

Ronald Pagan is petrophysics discipline leader at Shell Americas and manager of Shell Canadas Early Maturation team. Over a more than 30-year career at Shell, he assumed various petroleum engineering roles in New Orleans, Oman, Canada, and the UK. Before his current roles, he was Shell Canada petrophysical technical chief (1997 to 2007). Pagan earned a BS in geology from Edinburgh University and an MS in petroleum engineering from Heriot-Watt University.

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a reservoir simulator with the petrophysicists entire data package, to forecast the number of wells to be drilled within the reservoir and their estimated production performance. The production output forecast, checked against the project economics and investment matrix, goes into development planning and reservebooking.

A Petrophysics Career in the Petroleum Industry

The early electrical logs run by brothers Conrad and Marcel Schlumberger in the 1920s provided the foundation on which numerous subsequent careers in log analysis were built. Petrophysics as a disciplinewas brought into prominence in the 1950s following a series of log and core work, such as that performed by Gus Archie, whose famous equation fundamentally transformed how we assess reservoirs. The 1970s oil crisisand the 1980s recession produced a severe drought period for oil industry professionals, leadingto todays oil and gas industrys ongoingmassive crew change, with the industrys mainstay professional workforce going into retirement withinthe next 5 to 10 years, withoutenough new people to replenishthem.

Another note is that, since the 1990s, the practice of petrophysics has been democratized because it was desired that most subsurface team members geologists, geophysicists, and reservoir engineersbecome petrophysics generalists. Cased-hole petrophysical experts are few and far between in the entire industry worldwide. This is creating a great opportunity for young petrophysics practitioners weighing their specialization interests before choosing career paths. To be a petrophysicist, the most important thing in college is to have a solid yet broad understanding of major science and physics principles and concepts, because there will be plenty of opportunities to learn how to put these principles and concepts into use. In 2011, Shell Americas recruited professionals with a background in medical/hospital magnetic resonance imaging (MRI) to work as petrophysicists on difficult unconventional reservoirs. If today you are studying the Higgs boson, chances are that the particle physics background you have will allow you to better understand how neutron and hydrogen particles work in different logging environments. It is highly recommended that you, as a young petrophysicist in the industry, find a mentor from among

the most experienced experts in your company. Many distinguished petrophysicists from the last two generations are still actively engaged in consulting, training, and sharing their experience through the Society of Petrophysicists and Well Log Analysts, SPE, the American Association of Petroleum Geologists, academic communities, and private companies. Oilfield service companies invent logging equipment hardware and provide data-acquisition services. A convenient roadmap is to start a career with one of the oilfield service companies and move on to oil companies afterward. Such a stay can get you up to speed and set you quickly on the road to becoming very knowledgeable. Operators then give you the opportunity to see the big picture and apply your skill set. Since 2000, our industry has begun to explore and extract hydrocarbons in basins with distinct and extreme challenges: deepwater presalt, ultratight rock, thin-bed, coalseam, and gas hydrates. Activities in these plays have already led many professionals to rethink decades-old concepts, such as pay thickness or net pay. Revolutions in petrophysics interpretation and formation evaluation are anticipatedduring the next wave of industry transformation. TWA

HR Discussion
An example of the application of MBTI in ones career can be shared from a strategic planning consultant whose MBTI type is ENFP. ENFP indicates that her favorite function is extraverted intuition, and her supporting function is introverted feeling. For years she has worked with business executives and their leadership teams in strategic planning. She is skilled at developing lasting relationships which helped hersecure contracts and employment. Helping teams worktogether to examine possibilities and plans (extraverted intuition) was quite satisfying for her. Later in her career, she moved toward coaching and enjoyed the meaningful interaction and development of individuals in their leadership journeys (introvertedfeeling). As an extraverted intuitive with introverted feeling, she is good at generating new ideas for problem-solving and not only has strong understanding of her own personal values but is fairly adept at tracking the motivations and values ofothers. Strategic planning often attracts persons with preferences for intuitive thinking (NTs). While the tough business arena did always energize her, coaching was a relief to the objective, logical thinking requiredin strategic planning. Because the arena of coaching, which includes human advising and support, typically attractsENFPs, she was able to satisfythe intuitive side of her whichcraves novelty and doing thingsthat are new and different. Using MBTI typing in the same way, you can pursue a fulfilling career.Understanding yourpreferences will serve as a valuable guide when applied to careerchoices and personal interactions in the workplace. TWA
Vol. 9 // No. 2 // 2013

Continued from page 9

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Technical Leaders

Oil and Gas Professionals Perspectives on Common Public Perceptions of theIndustry

Ahmed El-Banbi, Cairo University; Geoffrey Thyne, Science Based Solutions
The purpose of this article is to address three common myths/misperceptions the general public has of the petroleum industry. Two oil and gas industry technical experts give their views regarding these common myths/ misperceptions and the factors associated with them. last many years. On the other hand, the cost of producing those reserves and problems associated with delivering petroleum products to markets areincreasing. The petroleum industry is characterized by two important, somewhat unique features: high risk and uncertainty, and significant investment. Many people argue that the easy oil has long gone and we are left with more difficult-to-produce oil and gas. Through nurturing our people, using advanced processes, and expanding our technology portfolio, we have been able to produce commercially from the Arctic, shale gas and shale oil, deep water and ultradeep water, heavy oil and tight oil, and so on. The production of the more difficult oil and gas requires the use of more expensive methods and technologies, yet oil and gas production is still cheaper than most alternative energies and even probably safer and more environmentally friendly thansome. The oil industry is a technologically advanced industry that develops and employs high technology and borrows technologies from other industries as well. Although many factors impact oil prices and can drive them higher, the cost of finding, developing, and producing reserves is proportional to the complexity of producing those reserves. Many of our projects take significant time and assets to drive oil and gas and their products to our markets. Therefore, the combination of costs, need for technology, political stability in certain areas, and time required in developing reserves to market affects both the supply of petroleum and oil prices. GT: The current oil price is a result of two main drivers. One is the demand for oil as the fuel of choice for transportation. While the future may bring other modes of transportation that do not rely on oil, for now, growth of the world economy means increasing demand for oil. The second driver is the shift in who owns the oil. Over the last 30 years the majority of the worlds oil reserves have moved from corporate to national ownership. National oil companies (NOCs) now hold more than 75% of the worlds reserves. State-owned companies have more objectives than simply making a profit. They are often an agent of government policy and make decisions to maintain higher prices by limitingproduction. In fact, over the last 30 years as ownership and production have shifted from publically owned companies to NOCs, the price of oil has risen from USD 20/bbl (in 2006 dollars) to as high as more than USD100/bbl. We can better see that impact by comparing oil prices to natural gas prices. Natural

Myth #1: Theres plenty of oil and gas available, but the oil and gas industry is not making an effort to produce enough for world consumption or the industry fails to supply enough to themarket. Questions: If oil and gas resources are so abundant, why are prices so high? What is keeping more supply from beingavailable? AE: Statistics show that our industry has produced significant amounts of oil since the start of the modern oil industry and there are still more reserves to be produced. On the one hand, our industry has been mostly successful in replacing produced reserves over the

Ahmed El-Banbi is a professor of petroleum engineering at Cairo University. With 21 years diversified international experience in reservoir and petroleum engineering, ElBanbi spent 12 years with Schlumberger where he held a variety of technical and managerial positions in five countries. He has considerable experience in managing multidisciplinary teams and performing integrated reservoir studies. Previously, he held shorter assignments with a major oil company and a consulting company, in addition to academic research and teaching. El-Banbi has authored or coauthored more than 40 technical papers and two book chapters. He has served on numerous SPE committees and as a technical reviewer for SPE Reservoir Engineering & Evaluation journal.

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gas prices are, and continue to be, very low because of the large supplies and rapidly growing production from unconventional resources. Is it coincidence that those new reserves are not controlled by national oilcompanies? We have large supplies of oil and gas available, but recovering these supplies is dependent on several factors. While the price, and thus profit, may be attractive to the industry, the limitations imposed by NOCs as representatives of their governments policies can beprohibitive. We are also encountering limitations imposed by current technology. Supplies of easily extracted oil and gas are declining. We are facing ever-growing technical challenges to continue production of leaner resources. For instance, conventional resources are fairly energy-dense. We find ourselves having to develop less energy-rich resources such as shale gas. Unconventional resources require technological innovations, more intensive drilling densities, and additional stimulation techniques such as hydraulic fracturing to produce.

and petrochemical plants for further processing into products we use in everyday life. All of these processes require significant knowledge of the business and significant investment. Some governments encourage oil companies to use advanced technology and develop more technologies to produce higher-cost oil (more difficult oil) and therefore grant some subsidies for specific projects. There are many factors that affect oil and gas prices. These include the usual supplydemand rules that govern most commodities. However, because oil and gas are so tied to our lives, and because there is always fear of disruption of oil or gas (or their products) supply at certain times, prices may be affected by other factors. These factors include political stability, storage capacity and stock amounts, Organization of the Petroleum Exporting Countries and highproduction countries interference in the market, accidents, weather conditions, and public perception. GT: The actual profit margin of oil and gas companies is fairly average (4% 8%) compared to many other industries. However, since the energy industry is the largest business on the planet, the

absolute profit value seems huge. That said, the energy industry does enjoy a number of tax incentives that may or may not be necessary. This is a political question since there are national security issues involved in maintaining a secure energy supply. First, it is important to recognize that the oil and gas market is a world market. Few countries are self-sufficient when it comes to energy. And second, while most of us think of oil and gas as commodities, they are much more. The reality is petroleum is a critical source of energy in the modern world, and as such is a tool of international power. In the free-market view, prices are a function of supply and demand; however, that ideal has been substantially changed by the rise of national oil companies. As producers, they have good reason to maximize production, which increases supplies and lowers prices; however, as instruments of their governments policies there are other considerations. World oil and gas supplies have become instruments of policy as much ascommodities. Myth #3: Hydraulic fracturing is harmful to the environment.

Myth #2: Oil is very easy to produce since it exists in a pool underground and you only have to drill a well and the oil will keep gushing out of theground. Questions: Why should oil and gas companies enjoy subsidies when they are so profitable? What factors impact oil and gas prices? AE: Oil exists in pore spaces and usually in deep reservoirs below the surface of the Earth. In many cases, it requires a significant expense to drill wells and reach the petroleum reservoirs. Also, after some depletion of the reservoir, we usually need to install artificial-lift equipment (pumps or gas lift) to help lift the oil to the surface. We will also need to build surface facilities to treat and process the oil and then transport it to refineries

Geoffrey Thyne is a registered professional geologist specializing in applications of geochemistry to Earth systems, working since 2012 as a private consultant for Science Based Solutions in Laramie, Wyoming. He has served on the Scientific Advisory Board for the US Environmental Protection Agencys current hydraulic fracturing study. Early on, Thyne worked as a research geochemist at the Arco Oil and Gas research facility in Plano, Texas, turning to academia in the 1990s as an assistant professor at California State UniversityBakersfield in the department of physics and geology. He then joined the department of geology and geological engineering at the Colorado School of Mines, while also serving as project manager for the Colorado Energy Research Institute. He joined the Enhanced Oil Recovery Institute at the University of Wyoming in 2006 as a senior research scientist. The author or coauthor of more than 50 peer-reviewed scientific papers, Thyne was recognized by the American Association of Petroleum Geologists with the A.I. Levorsen Memorial Award in 2006. He holds a BA in chemistry and zoology from University of South Florida, an MS in oceanography from Texas A&M University, and a PhD in geology from the University of Wyoming.

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Technical Leaders

Questions: What are oil and gas companies doing to reduce harmful environmental impacts to air, water, land, and people? Why arent they doing more and faster? Do oil and gas have a role in a low-carbon future? AE: Hydraulic fracturing is a technology that uses hydraulic power to pump fluid, chemicals, and proppant (sand particles or other material) to fracture the rock below the Earths surface (reservoir layers) to create conduits of high permeability and allow more oil and gas to flow to the surface. Hydraulic fracturing technology is credited with adding significant reserves to some hydrocarbon reservoirs and to changing many nonprofitable oil and gas extraction projects to profitableones. When engineered properly, hydraulic fracturing operations have very low impact on the environment. In most locations, oil companies exercise high standards of safety, adhere to environmental constraints, and employ good industrial practices that reduce the impact on the environment to a minimal footprint. GT: Over the decades of petroleum extraction, the industry as a whole has done an enormous amount to balance the production of resources with minimal environmental impact. There is, and always will be, a dynamictension between corporate profits and public good; however, mature corporations have implementedpolicies and practices that recognize this balance. This is and will remain a constantly moving target. Instilling and maintaining corporate philosophies thatencourage and reward practicesthat reduce environmental impact is key. However, on the hydraulic fracturingissue, oil and gas companieshave not been proactive enough in acknowledging and minimizing environmental impact. In part this is the outcome of the rapid deployment of an evolving technology.

Another factor is that many companies involved in developing unconventional resources are relatively new to the business. In my experience, the larger, well-established corporations with long histories in conventional oil and gas have over the decades developed policies that balance business and environmental concerns. These companies have come to realize that minimizing environmentalimpact is simply good business. In contrast, many companies involved in developing unconventional resources are still climbing the learningcurve. Many companies view the problem as political rather than technical. Their public relations efforts are spent on propagating a story line whose premise is that development activities, especially hydraulic fracturing, are well regulated and have never caused environmental damage. Many in the industry accept these statements without question. Since this position contradicts the experience of many citizens, it creates a credibility issue with the public. The industrys response to questions is too often further denial, efforts to influence policy-makers, and suppression of opposing points of view. This has created an antagonistic environment where sensible solutions and policies are ignored in favor of further polarizing stand-offs and conflict. The fact is most of the problems are engineering and technical in nature, problems the oil and gas industry can solve. Realistic and practical solutions such as green fluids, public access to well records and fracturing-fluid composition, cooperative engagement with the public, and forward-looking business practices should be our focus. Using oil in transportation more efficiently and the growth of natural gas in electricity generation have already reduced US carbon emissions substantially. In fact, the US is well on track to reach the Kyoto targets for its carbon emissions. Injection of CO2 for enhanced oil recovery is a carbon-neutral

practice that expands our domestic oil reserves while contributing to carbonmanagement. However, the larger question is: What would we substitute for oil and gas? Petroleum (oil and gas) supplies about 60% of world energy needs. Energy is essential to our lifestyle and our economies. Growth in population, food production, life expectancies, and quality of life are all directly tied to energy supply. Changing to low-carbon energy-generation technologies and the accompanying infrastructure is a multigenerational endeavor. While renewable energy sources will continue to grow, we have to confront the fundamental issues of scale and reliability. For instance, consider energy payback ratios (EPR), or how much energy is required to extract a resource compared to how much energy the resource creates. This is a life-cycle analysisthe well-towheelsanalysis. So how much energy does it take to extract a barrel of oil, pound of coal, or megawatt of electricity from a windmill? The EPR of coal is between 2and 5, nuclear is 14 to 16, solar panelshave a factor of 3 to 6, windmills have a return between 18 to 34 times, while the EPR for the best Middle Eastern wells is 100. Coupled with the fact that we currently cannot effectively store the power generated by wind and solar, we have no real substitute for oil and gas in the near term. Someday there will be a game-changing technological substitute for petroleum, but until then petroleum remains a key player in the energybusiness. TWA

References
BP Statistical Review of World Energy 2012, June 2012 www.bp.com/ statisticalreview. El-Banbi, Ahmed H. 2010. Technology and Innovation: Do We Do Enough in Our Industry? Paper SPE128485 presented at the NorthAfrica Technical ConferenceandExhibition, Cairo,Egypt, 1417February.

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Soft Skills

The Global Gas Industry: A Cleaner Energy Source Needs aSmartWorkforce

Abhijeet Kulkarni, Dansk Shell
Sustain

Create Awareness

Encouraging Youths and Shaping Future

Attract

The oil and gas industry has played a pivotal role in humankinds progress. Today, as we usher in a new era of technological advancement, flatworld, and linked economies, it has never seemed more apparent how immensely dependent we are on oil and gas to meet our energy needs. Yet simultaneously we have a world that is getting more conscious about its environment and the future it leaves for generations to come. Fossil fuels like oil, coal, and gas have helped us meet our energy requirements for nearly 2 centuries, but people now want nations to focus on cleaner sources of energy. All these factors have significantly changed the dynamics of the energysector. Natural gas is becoming the preferred energy source for many applications due to reduced emissions, higher efficiency, affordability, abundant availability, and easy usage. Global demand for gas is predicted to rise 1.5% annually by 2030double the growth rate of oil (Parshall 2011). In the wake of the recent Fukushima disaster in Japan and the shift in

public opinion on nuclear energy, this number is likely to surge (e.g., Germanys plan to completely phase out nuclear energy by 2022 [Dempsey and Ewing 2011]). The oil and gas industry is now increasingly reliant on unconventionalresources. While a lot of emphasis has been placed on investment in technology, focus on innovation, and lessening the burden of regulations and policies, we should ensure we continue to build on our most fundamental resource theworkforce. According to the latest Schlumberger Business Consulting (SBC) HR Benchmark survey (2011), the following are two of the four factors that will immensely impact the industryworkforce: The Big Crew Change: This is already having a profound impact on the industry. The SBC survey found that approximately 25% of the experienced workforce (petroleum engineers and geoscientists) are above the age of 50 and most of them will probably retire within the next 3 to 5 years.

Assist

Fig. 1 A four-step approach to youth engagement.

This translates to an exodus from the industry by 2014 of around 22,000 experienced workers. The survey also highlighted that graduate schools will be able to replace only about 17,000 professionals in the corresponding timeframe. This will leave a technical talent deficit of a whopping 5,000 people. Shift to More Unconventional Oil and Gas Resources: Unconventional gas resources (e.g., shale gas, tight gas) represent more challenges compared to those for accessing conventional resources. State-ofthe-art techniques are needed to extract the gas in the most efficient and cost-effective manner. Hence it is important to understand that we need a different skill set from what we have focused on historically.

Abhijeet Kulkarni is a reservoir engineer at Dansk Shell, Copenhagen, Denmark. During his 7-year career with Shell, he has held different positions in drilling, CO 2 enhanced-oilrecovery field-development planning, and reservoir management. Kulkarni was chair of the SPE Young Professional Coordinating Committee during 201112. He served as an editor for TWAs Technical Leaders section between 2009 and 2012 and received an SPE International Young Member Outstanding Service Award in 2012. Kulkarni earned a bachelor of chemical engineering degree from the Institute of Chemical Technology, Mumbai, and an MS degree in petroleum engineering from the University of Alaska,Fairbanks.

A Four-Step Approach to Youth Engagement

With a dearth of both experienced and skilled professionals, the global gas industry needs to engage young people in the areas of science, technology, engineering, and mathematics (STEM) giving them early exposure in these subjects that excites them to later seek STEM educational qualifications. With so many avenues opening up for youth with STEM qualifications,
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Soft Skills

there needs to be a structured approach to tap into their talent. A four-step approach illustrated (Fig. 1) and described next would encourage them to consider being a part of the gasindustry.

Step I: Create Awareness

The oil and gas industry is facing poorpublic perception due to geopolitical conflict and environmentalissues. The publics negative perception only worsened after the Macondo blowout in the GulfofMexico that claimed 11 lives andcaused untold environmentaldamage. The oil and gas industry is considered by many to be irresponsible and unsafefor peopleandthe environment. This does not make the industry a preferred choice formany STEMstudents. There is a need to create awarenessabout the industry and its paramount role in contributing to developmental progress and impact in everyday life. Social media could be an important enabler to drive this message. There is also a need to createinteractivechannels with which the youth of today can relate. The primary role would be to acquaintthem with the different forms of gas, the complexity involved in exploration and production, the scale of operations, the challenges to be confronted, conformity to safety standards, and above all the advantage of being a cleaner source of energy. For example, SPE has in place an active and successful Energy4me program that aims to excite youngsters about science and energy. Such initiatives at the university level would help students understand the industry ona serious scientific and economiclevel.

information technology boom in early 2000, that attracted a pool of STEM graduates who were selected based on capability and later trained to suit jobrequisites. This methodology could be replicated to attract STEM graduates to the gas industrycoupled with a strong message about tremendous lateral and vertical growth potential, international exposure, lucrative remuneration, and long-term sustainability of the sector. The rise of unconventional gas has given rise to unique challenges and this will be an added advantage to attract bright and talented youth who are always looking for such platforms on which to exercise their creativity andinnovation.

Step IV: Sustain

The outcome of this process could be technically skilled professionals who would serve as ambassadors of the industry and spread their knowledge as well as experience. There need to be intervention points from the industry as well as academia to adapt as necessary. Initiatives like the World Gas Conference can be replicated across the world and more industryrecognized initiatives could be introduced, which could also serve as launch pads for deserving individuals. This will ensure continuity and sustainability of the program. As we move with the times, the gas industry readies itself to be a more integral part of our lives. As we envisage a cleaner planet and move toward renewable energy sources, gas will serve as an important intermediate step. The gas industry promises a cleaner environment and a better future, and we need to fulfill the promise by investing in technology and innovation, and finally use the creativity of a smart workforce to integrate both. As a very experienced workforce is in the process of retiring, the gas industry will be hugely dependent on youth. The industry needs to step up its current efforts to generate interest and attract and retain talent. The proposed plan would help achieve the needed impetus to encourage youth to choose to dedicate to a career in the gas industry. This methodical and structured approach will go a long way in ensuring a stable and sustainable gas industry. TWA

Step III: Assist

The scale and complexity of the gas industry can be intimidating for youth or newcomers. Hence they need assistance from the industry and its veterans to make their transition into the industry seamless. While there have already been steps taken in the right direction, there is still room for more to be done. It is important to continue outreaches like professional societies and universities regional andinternational student paper contests, educational seminars, scholarships, and other measures to engage youth. Yet at the same time there is a need to keep students abreast of the specifics of the gas industry and new and sophisticated technologies, along with their applications. This could be done by creating universally recognized and certified online/ classroom training modules that have various levels. Collaboration for such specific area training could be between universities and companies or volunteer-driven industry-recognized professional organizations such as SPE. Certifications would serve as an additional incentive for interested students. It is important that all these efforts are coordinated via a common channel to avoid knowledge loss and duplication of effort.

References
BP, 2011. BP Energy Outlook 2030. Dempsey, J. and Ewing, J. 2011. Germany, in Reversal, Will Close Nuclear Plants by 2022. The New York Times 30 May. Parshall, J. 2011. Healthy Future Seen for Global Gas With Focus on Shale Gas and LNG. Article appeared in JPTonline.com, May. Schlumberger Business Consulting, 2011. 2010 SBC Oil & Gas HR Benchmark (www.sbc.slb.com/ SBCInstitute).

Step II: Attract

The gas industry offers a unique set of benefits that is enriching on all fronts compared to other industries. By 2030, natural gas will overtake coal as the worlds principal fuel for generating electrical power (BP 2011). The industry could draw a parallel with the

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YP Guide

THE YOUNG PR

GUIDE TO

OFESSIONALS

Abu Dhabi
Shruti Jahagirdar, Tyler Roberts, and Jim Stiernberg
The Persian Gulf coast offers many things for travelers to enjoy, including desert vistas and cities full of cultural heritage. The city of Abu Dhabi, one of seven emirates that constitute the United Arab Emirates (UAE), shines as a stunning example. With a population of approximately 1.6 million, it is the capital of the UAE. This city could easily be called the New York City of the Gulf with its high-rise buildings, beautifully planned gardens, roadways, luxury hotels, and multiple shopping options featuring elite brand stores. Abu Dhabi is also the new favorite destination for Formula 1 racing lovers. In addition, Abu Dhabi houses the corporate offices of many oil companies from all over theworld. The UAE is strategically located on the Persian Gulf, with its northern coastline on the Persian Gulf and its eastern coastline facing the Gulf of Oman in the Indian Ocean. It has a 410-km border with Oman to the southeast and a 457-km border with Saudi Arabia to the southwest and shares sea borders with Qatar and Iran. The Bedouin of the Bani Yas tribe originally centered on the Liwa Oasis, located on the mainland about 150 km south-southwest of Abu Dhabisettled

UNITED ARAB EMIRATES

on the island of Abu Dhabi in 1761. The Bani Yas tribes ruling Al-Nahyan family did not move from the Liwa Oasis to Abu Dhabi until 1793. The pearl trade in the late 19th century played an important role in the expansion of the then small town of Abu Dhabi. By the 1930s, the pearl trade had declined and interest grew in the areas possible oil riches. Oil exploration encountered difficulties due to the challenging desert terrain, but finally in 1958 oil was discovered offshore in the Umm Shaif field, followed in 1959 by an onshore discovery at the Murban No. 3 well. Thus began the development of modern Abu Dhabi. The first president of the UAE, Sheikh Zayed bin Sultan AlNahyan (19182004), can be creditedfor this advancement to put Abu Dhabi on the world map. His son, Khalifa bin Zayed Al Nahyan, is the hereditary ruler of Abu Dhabi, and is currently UAEspresident. The UAE, considered a major oilproducing and exporting countrylocated on the Arabian Peninsula, is a confederation of sevenstates, or emirates, of which AbuDhabi and Dubai are by far the most important politically and economically. About 95% of the

UAEs oil and gas production lies in AbuDhabi. Abu Dhabi started producing oil in the early 1960s and became a member of the Organization of the Petroleum Exporting Countries (OPEC) in 1967. Four years later, six statesDubai, Abu Dhabi, Ajman, Al Fujayrah, Ash Shariqah (Sharjah), and Umm al Qaywaynmerged to form the UAE, joined in 1972 by the seventh state, Ras al Khaymah. According to Oil & Gas Journal s 2012 estimates, the UAE holds the worlds seventh-largest proved reserves of oil at 97.8 billion bbl, with the majority of reserves located in Abu Dhabi. The state-owned Abu Dhabi National Oil Company (ADNOC), in partnership with a few large international oil companies, is the UAEs primary operating company.

Industry Influence
The Zakum system is noted by the US Energy Information Administration (EIA) as the third-largest system in the Middle East and the fourth-largest in the world. Situated about 80 km offshore northwest of Abu Dhabi, the field spans more than 288,000 acres. This oil field accounted for nearly 30%

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YP Guide

Abu Dhabi Facts

The Abu Dhabi SPE Section was established in 1985. There are more than 500 registered members of SPE in Abu Dhabi.

Around 80% of the population consists of expatriates from Asia, Africa, Australia, Europe, and North America.

Work weeks are between Sunday and Thursday, with the weekends reserved for Friday and Saturday.

Average Abu Dhabi temperatures range from 22C to 33C, with only 57.1 mm of precipitation expected per year. Further Information: http://www.nytimes. com/2011/03/24/world/ middleeast/24iht-m24tourism.html?_r=0

of the countrys total production in 2010. Other significant fields include the Bu Hasa, Ghasha-Butini, and Murban Bab, as well as the Sahil, Asab, and Shah (SAS) fields, all of which are located in Abu Dhabi. Abu Dhabis natural-gas sector is led by ADNOC through its subsidiaries, with the exploration and production of oil and gas resources carried out by the Abu Dhabi Company for Onshore Oil Operations and the Abu Dhabi Marine Operating Company. The Eastern Gulf basin underlies a large proportion of the area offshore Abu Dhabi, Dubai, and Sharjah. Its sedimentary section deepens northwards to more than 6700 m in thickness. Deep-seated Cambrian salt activity has created many of the broad structural closures that form Abu Dhabis abundant oil and gas fields. The basin is bounded to the south and east

by the Ras al-Khaimah basin, and to the west and northwest by the Qatar Arch. Despite such favorable geology and mineral resources, Abu Dhabi did not always trade in oil. In fact, its coastal location provided ample opportunity for hunting pearls, an economic activity for which the Persian Gulf was well known. The advent of the cultured pearl in the early 20th century drastically altered prices and gave stronger impetus to find a new resource to exploit. Petroleum began to answer that problem in the 1930s, with concessions provided by Sheikh Shakhbut bin Sultan Al Nahyan (c. 19051989), the ruler of Abu Dhabi from 1928 to 1966. This deal allowed for 75 years of exploration, which made little progress until a joint venture between BP and Total (or, as it was known then, Compagnie Franaise des Ptroles) struck oil during the late 1950s in the Umm Shaif field with the Bab-2 well. This same operator went on to discover the prolific Zakum offshore oil system. Onshore drilling was initially impeded by the harsh conditions of the desert environment. However, a subsidiary of the Iraq Petroleum Company, Petroleum Development Trucial Coast, made a discovery in 1959 with its Murban No. 3 well on land. Afterward, scores of other fields were found in the UAE, which is now believed to hold 9% of the worlds proven oil reserves. Oil production continues to grow, with production increasing more than 20% from 2010 (approximately 2.3 million BOPD) to 2011 (about 2.8 million BOPD). The country also possesses between 214 and 227 Tcf of natural gas, but getting to this resource does not come without its difficulties. Producing and handling sour gas can be costly, as experienced with the USD-10-billion Shah gas development project due in 2014. Just over 100 miles outside of Abu Dhabi, this project is intended to meet demand for gas in the growing industrial portions of the city and likely supplement gas injection programs already under way in major reservoirs. The Zakum field is an instance of gas

injection for enhanced oil recovery. However, nitrogen is being tested as an alternative for this purpose so that more methane can be used to generateelectricity. As of 2007, the UAE became a net importer of natural gas, most of which comes from Qatar via the Dolphin Gas Project pipeline (capable of transferring 1.2 Tcf per year in its 48-in. diameter pipe).

Oil and Gas Research and Development

The ADNOC Petroleum Institute (ADNOC-PI) in Abu Dhabi was established in 2001 to address the needs of the industry in the areas of petroleum, mechanical, electrical, and chemical engineering. Other fields of study concerning geology and materials science are also offered. The Colorado School of Mines and the University of Maryland are both affiliated with ADNOC-PI. Although it is awaiting international accreditation, ADNOC-PI has received acknowledgment from the UAEs Ministry of Higher Education and Scientific Research and has graduated more than 500 engineers since itsinception. ADNOC-PI is working in tandem with ADNOC and several other entities to conduct research into enhanced oil recovery. A new research center, the ADNOC-PI Research Center, will be partnered with universities including The University of Texas at Austin, Rice University, Stanford University, Massachusetts Institute of Technology, University of Minnesota, and Johannes Kepler University Linz. It also intends to collaborate with industry and broaden its pool of resources by interacting with international companies such as CGG Veritas (a French company focused on geophysical exploration techniques) and Statoil. Another association of ADNOC-PI is the Gas Processing and Materials Science Research Centre, which is partnered with industry leaders such as Shell, Total, and Partex, to name a few.

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Sights and Travel Tips

Car fanatics jaws will drop at the site of the Ferrari World amusement park on Yas Island in Abu Dhabi. The park is covered by a giant 200000-m 2 roof to combat the intense heat. It is the largest indoor amusement park in the world. It also houses the worlds fastest roller coaster, the Formula Rossa, which clocks in at nearly 150 miles per hour! You will need to hail a taxi to get there. The bus system does not currently support the trip to Yas Island or farther destinations, except Dubai, which has a dedicated route with the trip costing about USD 5.00. Take care when you step into a cab because the meters are based off distance and time. Highways labeled with the letter E and a number have been laid out to facilitate access between the most prominent islands, and extend farther inland. Abu Dhabis city planners have begun updating the citys transportation infrastructure. Initial

development plans are in place for a mass transit system that will include buses, trams, metro lines, and a highspeed rail system. If you require something more relaxing to unwind, then the Liwa Desert oasis Qasr Al Sarab is the perfect place to retreat. It is designed to look like an ancient Arabian fort while surrounded by some of the worlds largest sand dunes, which measure up to 400 ft and higher. Nightlife, theater, and concerts are always an option around town. Foodies will find a wide range of eateries that offer international cuisine and are typically set against beautiful desert vistas.

Ways Ahead
The fact that oil reserves will one day run out is something the city of Abu Dhabi is taking seriously. In 2007, the visionary Plan Abu Dhabi 2030 was published. The ambitious planfocuses on continuing the momentum brought to the city by the oil sector

and establishing itself as a global destination for work and leisure. Master plans for specific locationsthroughout the city have been detailed. The New Central Business District has been reserved to define Abu Dhabis skyline. The Capital District will become the city brain with medical centers, higher education centers, and government buildings. Abu Dhabi is also taking advantageof its coastal location by envisioning a world-class marina development. The Saadiyat Marina, on Saadiyat Island, may one day becomethe epicenter for Middle East travel. In addition to the marina, plans are in place to construct the Guggenheim Museum, the Louvre AbuDhabi, the Zayed National Museum, and the Abu Dhabi Performing Arts Center. Plan AbuDhabi 2030 is preparing the city to become a modern marvel and a modelfor development around theglobe. TWA

Continued from page 11

Forum

oil is used to produce gasoline and how much oil is used to feed the transportation sector, as noted in Fig.1. To be clear, the correct answers are 50% and 96%, respectively. Respondents were also quite uncertain regarding the extent to which oil is used in other consumer products, as exemplified in the computer screen question. (Interestingly, this happens to be the target of many advertisements showcased recently in Canada by major oil sands producers.) The survey also asked respondents what their first thoughts are when they see an ad from an oil company. The majority of respondents answered by referring to the environment, saying either that oil companies should care more about the environment or that oil companies should help support the development of renewable energy sources. One respondent went as far as to say, I think it is ridiculous propaganda full of half-truths, which

addresses the lack of trust the public might have toward both the industry and the ads. Another respondent mentioned that oil companies should be putting more emphasis on the many uses of oil and how it really impacts people on a dailybasis. What is clear from both the Gallup survey and our survey is that the public has had a negative view of the oil industry for quite a long time. Based on our survey results, respondents (i.e., the public) seem most displeased with an apparent lack of environmentalconsideration oil companies incorporate into their business practices. Yet an equally compelling argument could be that a lot of public negativity toward oil stemsfrom a lack of understanding about our economys pervasivereliance on oil (i.e., the end uses of oil). Other notable arguments might be that public negativity could stem

from news stories by the media that tend to portray the industry negatively and could outweigh much of oil companiespublic relations and advertising efforts. Sometimes, however, advertising can work, even in the oil industry. An example of this is the presence of BP at the London 2012 Olympics, where they showcased their title sponsorship prominently across the Olympic facilities with their bright green and yellow logo. So perhaps a fitting answer is that the responsibility for educationandfor learning about the positives andnegatives of our economies reliance on oil rests with both the industry and the public. And if it seems warranted to make changes in how and how muchwe use oil, then all parties shouldunderstand what impactscould result from those changes. Then and only then can we say we are all makinginformed decisions about the future ofoil. TWA

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YP Newsflash

Interviews With the Winners of the 2012 SPE International Young Member Outstanding Service Awards
The Young Member Outstanding Service Award recognizes contributions to and leadership in the public and community areas, as well as SPE, the profession, and the industry, by a member under age 36. Four awards were presented at the 2012 SPE Annual Technical Conference and Exhibition Annual Reception and Banquet, held 9October in SanAntonio,Texas.

This award to me is in recognition of my effort on behalf of and dedication toward SPE. An acknowledgment like this at such a high level provides the impetus and encouragement for me to carry on. I feel extremely motivated and it strengthens my belief that good work never goes unnoticed. How does your organization perceive this award and YPs involved in SPE? Shell has been quite supportive of my role and work with SPE. I have been fortunate to have management supportto maintain my association with SPE. In fact, an article was published on Shells intranet to highlight my achievement to encourage more employees to participate in SPE activities. How has SPE helped you in your professional life?

SPE has played a crucial role in my professional development. I have benefited immensely from my work with SPE in honing my soft skills and better understanding the dynamics of human relationships as part of a professional team. My role as YPCC chairperson also helped me work on my leadership skills. Besides, SPE has also inculcated in me a sense of valuing time and efficient management that is useful in both my professional and personal life.

Interview With Maximiliano Medina

Do you think this award will have an impact in your professional life? How? In my experience, most volunteer work for SPE is done undercover with some support from the company you work for, but always with the caveat that your real work comes first. The positive side is that people appreciate your ability to multitask and deliver at different levels. This obviously helps your career. However, the other side of the coin is that you are now expected to deliver even more, because the award means you can do so. What do you think is the most challenging part for a YP? The most challenging part for a YP is being able to remove the young and demonstrate that we are ready to make a difference in SPE and work right now. Overcoming the prejudice encountered because of our inexperience is sometimes tough, but the only way to go about it is with hard work and delivering great results. However, in some instances even with the best intentions, it might be difficult to be accepted by older peers, which is why SPE has promoted YP-specific initiatives where getting involved and making a difference is easier. How has SPE helped you in your professional life? I started my career in my home country, Venezuela. SPE was not very strong there, so despite my efforts I

Interview With Abhijeet Kulkarni

Do you think this award will have an impact on your professional life? How?

Kulkarni is a reservoir engineer at Dansk Shell, Copenhagen, Denmark. During his 7-year career with Shell, Kulkarni worked on assignments in Egypt, Dubai, and Aberdeen, holding positions in drilling, CO2 enhanced-oil-recovery fielddevelopment planning, and reservoir management. Kulkarni is chair of the SPE Young Professional Coordinating Committee (YPCC). He led the SPE Aberdeen Section YP Committee, when it was awarded Outstanding YP Program 2 consecutive years. Kulkarni also helped promote the Energy4me program among YPs. He was selected to represent global youth at World Gas Conference 2012 held at Kuala Lumpur. He has worked as an editor for The Way Ahead. Kulkarni earned a bachelor of chemical engineering degree from the Institute of Chemical Technology, Mumbai, and an MS degree in petroleum engineering from the University of Alaska, Fairbanks. Medina is a principal engineer in well and completions with Statoils Heavy Oil Technology Center, based in Calgary, Alberta, Canada, focused on research topics related to well construction and production optimization for heavy-oil thermal recovery methods. He has more than 10 years experience in the upstream oil and gas industry working with PDVSA, Weatherford, and Baker Reservoir Development Services. He was editor-in-chief of SPEs The Way Ahead magazine and associate editor of the SPE Drilling and Completion journal. He has authored several technical papers in drilling and completions topics and has been a technical editor for SPE Journal since 2007. He is a registered professional engineer in Alberta, Canada. Medina earned a BS degree in chemical engineering from Universidad de Oriente in Venezuela and is currently finalizing an MS degree in petroleum engineering from Heriot-Watt University in Scotland.

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never could get the most from SPE at that time. SPE became essential for my career development by helping me bridge a few competency gaps when I moved abroad and started working internationally. It certainly has been great for networking and making great friends.

and the community. The second is that it has a strong motivational effect on me to keep growing in my professional service, which is a very important part of my professional life. What do you think is the most challenging part for a YP? It can be very challenging to reach a good work/life balance, particularly when you have children in their early years since they require a lot of attention and time, which can become scarce. It can be also very challenging to secure your immediate managementssupport for volunteer activities since they

can get concerned about the time dedicated to SPE activities. How has SPE helped you in your professional life? It has helped me in many ways. With SPE I have met a lot of great people from whom I have learned a lot. Volunteering activities and networking offers a lot of opportunities to YPs like me. I am also a member of a technical committee, which has helped me to have a more complete understanding of my core discipline and interrelateddisciplines.

Interview With Carlos A. Chalbaud

Do you think this award will have an impact on your professional life? How? For me the award has two dimensions. The first is that it is recognition for my service to SPE, my company,

Chalbaud is a reservoir engineer at GDF Suez E&P UK, working for the Juliet and Jackdaw fields in the North Sea. Previous responsibilities within the company were providing reservoir engineering support to new venture projects and assisting in the coordination of the oil and gas reserves and resources corporate booking process and training. Chalbaud chaired the 2012 SPE London 1st Annual Conference and Exhibition and serves as membership officer for this section. He is a member of the SPE Reservoir Description and Dynamics Advisory Committee and the Student Development Committee. He previously served as an officer for the SPE France Section and won the 2011 Outstanding Young Member Award for the South and Central Europe Region and the 2012 SPE London Section Award. He has served as lead editor for The Way Ahead magazine and has chaired young professional sessions at the SPE Annual Technical Conference and Exhibition and Offshore Europe. He has coauthored seven technical papers. Chalbaud received a BS degree in chemical engineering from the Simn Bolvar University at Caracas, Venezuela; and an MS degree in petroleum engineering from the French Institute of Petroleum and a PhD in engineering from cole Nationale Suprieure dArts et Mtiersboth in Paris. Rodriguez is investor relations manager at Pacific Rubiales Energy (PRE), responsible for establishing and maintaining positive relationships with the Canadian and Colombian stock markets on behalf of PRE. He joined PRE in 2007, and as a reservoir simulation engineer, he was heavily involved with many simulation processes within the company, as well as in-situ combustion studies and rock-quality classification, mainly with Rubiales and Quifa fields. Previously, Rodriguez worked for Schlumberger in Venezuela and Trinidad and Tobago. He joined SPE in 2002 as a student member and served as secretary of the student chapter. After graduation he co-founded the YP program in Venezuela and later in Colombia. In 2010, Rodriguez served as YP Regional Focal Point, South America & Caribbean. In 2011, he was invited to join the Young Professional Coordinating Committee. Rodriguez holds a BS degree in petroleum engineering from Universidad Central de Venezuela and a diploma in international oil and gas business management from Uniandes (Colombia).

Interview With Javier Alejandro Rodriguez

Do you think this award will have an impact on your professional life? How? Yes. Being recognized by SPE is good for your rsum. It delivers many messages: ability to achieve, leadership, multitasking capabilities,wide vision, and discipline(to balance work/life activities). What do you think is the most challenging part for a YP? YPs should be ready to catch up with the E&P industry and adapt to the demanding work environment. The most important thing is that E&P professionals are citizens of the world. This requires them to beopen to change and be able toadapt to and respect other cultures. How has SPE helped you in your professional life? SPE helped me bag my first job as a student secretary of an SPE Student Chapter. For me there are three mainbenefits of being an SPEvolunteer:first is the opportunity to put leadership skills into practice;second, enhance your network; and third, build your reputation locally andinternationally.TWA

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Your Best Shot

THE WAY AHEAD

E DI T OR I A L COM M I T T E E EDITOR-IN-CHIEF
Todd Benton Willis, Chevron

DEPU T Y EDITOR-I N-CHI EF

David Vaucher, IHS CERA

TWA A DV ISE R
Max Medina, Statoil

LEAD EDITORS
Alicia L. Koval, ConocoPhillips Amir Soltani, Statoil Chris Jenkins, Devon Dilyara Iskakova, Hess Jarrett Dragani, Cenovus Karrie Santos, Chevron Lisa Song, Chevron Madhavi Jadhav, Schlumberger Prakash Deore, Fujitsu Consulting Sanchit Rai, University of Tulsa (student) Siluni Wickramathilaka, ConocoPhillips Subhash Ayirala, Saudi Aramco Tony Fernandez, Noble Energy Tyler Roberts, Baker Hughes

Oil Sands Pipeline Construction, Alberta, Canada Photo by Jarrett Dragani, technical coordinator, Christina Lake construction management team, Cenovus Energy, Calgary, Alberta. Pictured here is above-ground pipeline construction at Cenovus Energys Christina Lake oil sands project. Cenovus uses specialized technology, like steam-assisted gravity drainage, at all of their oil sands projects. Photo courtesy of Cenovus Energy.

ASSOCIATE EDITORS
Ankit Agarwal, Schlumberger Arpan Pushp, ONGC Ltd Asif Zafar, Halliburton Henny Gunawan, Schlumberger Islam Ibrahim, Cairo University

Drilling in Tectonically Active Area, TAL Block, Pakistan Photo by Osama Ikram Awan, Growww 2012 trainee engineer (Drilling Department), MOL, TAL Block, Province KP, Pakistan. This picture is of a drilling rig at a development wellManzalai-09, in TAL Block, Potohar basin, which is tectonically active with abnormal pressure distribution in the formations. A maximum of 45,000 psi compressive strength has been recorded in the lower sands, and drilling through these formations is always challenging. Photo taken with a Sony Cybershot DSC RX100.

Jenny Cronlund, BP Jim Stiernberg, Louisiana State University (student) Marjan Jamshidi, ConocoPhillips Matthew Drew, Drillmec Matthijs Verhoef, Shell Maxim Kotenev, Fugro Paulo Pires, Petrobras Rita Okoroafor, Schlumberger

CALL FOR ENTRIES

Submit your entry today to bestshot@spemail.org. 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 file-size limit of 4 MB. Submit photograph information with camera specifications. Provide your full name with your position, company name, and company location.

Rob Jackson, Mountaineer Keystone Shruti Ravindra Jahagirdar, Shell Technology India Thresia Nurhayati, Halliburton

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