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The Magazine by and for Young Professionals in Oil and Gas VOLUME 10 // ISSUE 3 // 2014

T E N T H A N N I V E R S A R Y I S S U E

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ContentsVOLUME 10 // ISSUE 3 // 2014

3 What’s Ahead Inspiring words from David Vaucher in his final issue at TWA’s helm.

4 TWA InterActYou are the energy sector! How to tell others what it’s all about. And more!

5 TWA InterviewBob Dudley, BP’s chief executive, talks about his career and what it’s like leading one of the industry’s most talked-about companies.

8 HR DiscussionRecruitment trends and talent management—a 10-year panoramic view.

10 ForumTen life lessons to help you excel—now and for the rest of your career.

13 Economist’s CornerThe past technology-driven decade and the economic challenges ahead.

17 Pillars of the IndustryVivek Sharma, well engineering services manager, Halliburton Consulting Asia Pacific region, gives insight into his career and the industry’s future.

19 SPE 101Follow SPE’s growth and change during The Way Ahead’s first decade.

20 Discover a CareerWhat is it like to be an oil and gas social media professional? According to Olivia Harting and Erika Conner, social media leaders at Chevron, it’s fast-paced, complex, challenging, global, and requires constant learning.

23 Technical LeadersThe past and future decade: Industry leaders Eve Sprunt and Luis Rodriguez speak their minds on a host of industry topics.

26 Soft SkillsIs the industry ready for a change in leadership? You may be part of it!

29 Tech 101The authors tell you how hydraulic submersible pumps work and how they’re different from other types of artificial lift.

32 YP NewsflashYPCC update. And news from SPE’s Bahrain, Turkey, and Mumbai sections.

34 A YP’s Guide to...A center for peace, hope, diplomacy—and oil and gas: The Hague, Netherlands.

37 AcademiaHow to understand the complexities of unconventional reservoirs.

39 Congratulations, TWA!2005 SPE President Giovanni Paccaloni helped nurture TWA’s beginnings—and couldn’t be prouder of all The Way Ahead has achieved. “Long life, TWA!”

40 Your Best ShotBeautiful oil and gas images from Wei-Lin Fan and Elizabeth Reale.

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TWA THE WAY AHEAD (ISSN 2224-4522) is published three times a year (February, June, October) by the Society of Petroleum Engineers, 222 Palisades Creek Drive, Richardson, TX 75080 USA.

TWA EDITORIAL COMMITTEE

EDITOR-IN-CHIEFDavid Vaucher, IHS

DEPUTY EDITOR-IN-CHIEFTony Fernandez, Jefferies LLC

TWA A DVISORTodd Willis, Chevron

LEAD EDITORS

Amber Sturrock, Chevron

Angela Dang, Colorado School of Mines

Harshad Dixit, Halliburton

Henny Gunawan, Schlumberger

Islin Munisteri, BP

Jenny Cronlund, BP

Madhavi Jadhav, Schlumberger

Maxim Kotenev, CGG Veritas

Paulo Pires, Petrobras

Prakash Deore, Fujitsu Consulting

Rita Okoroafor, Schlumberger

Rob Jackson, Mountaineer Keystone

Shruti Jahagirdar, Shell Technology India

Siluni Wickramathilaka, ConocoPhillips

Subhash Ayirala, Saudi Aramco

EDITORS

Anisha Mule, Larsen & Toubro

Ankit Agarwal, Schlumberger

Asif Zafar, Halliburton

David Sturgess, Woodside Energy

Dilyara Iskakova, Hess

Hao Sun, Chevron

Islam Ibrahim, GUPCO

Jakob Roth, Schlumberger

James Lloyd, Mayer Brown LLP

Kristin Weyand, ConocoPhillips

Muhammad Taha, NED University

Oyebisi Oladeji, Schlumberger

Thresia Nurhayati, Halliburton

ASSOCIATE EDITORS

Amanpreet Gill, Nexen

Batool Haider, Stanford

Carter Clemens, BP

Dane Gregoris, GLJ Petroleum Consultants

Ivo Foianini, Halliburton

Matt Hale, Baker Hughes

Matthew French, ConocoPhillips

Nazneed Ahmed, Apache

Shubham Sharma, Indian School of Mines Dhanbad

Celebrating 10 Years of Fresh Energy &

Creative Ideas!TENTH ANNIVERSARY ISSUE

3Vol. 10 // No. 3 // 2014

What’s Ahead–From TWA’s Editor-in-Chief

10 Years: One Whole DecadeDavid Vaucher

Editor-in-Chief The Way Ahead

hat were you doing 10 years ago? If you are among today’s youngest TWA readers, you probably weren’t older than 8. There was no iPhone, no Twitter, and WTI

crude was in the USD-30-to-USD-50/bbl range.The world was different then, and so were you.

In 2004, I was 20 years old, still a mechanical engineering student at Rice University—and loving it.

Now I am 30. I graduated not only from college but also graduate school (twice). I switched jobs a few times before finding the great opportunities I have where I am now. The girl I dated in college is married (not to me). I am about 25 pounds heavier (all muscle, really!). And my goals, aspirations, and skills changed dramatically for the better.

10 years: One whole decade. It is a long time. And yet the fact that I can remember my college years like they were yesterday shows how fast time appears to move forward—with no stops, no pauses, no time to catch your breath.

Looked at one way, it is terrifying: It is not such a leap to imagine that since I seemed to experience the past 10 years in an instant, the time between when I’m 30 and when I’m 40 will appear to go by just as quickly—maybe even faster. What if I don’t achieve everything I have set out to do?

Seen another way, it is highly motivating: I think of everything I have done and accomplished in the last 10 years—some of which I never would have predicted—and I think “Yeah, things worked out pretty well actually, and there’s no reason to think the next 10 years won’t be just as eventful.”

The fun thing about the future is that it is always a surprise: You can plan all you want, but most of the time you just have to roll with whatever comes your way. But don’t believe you can just sit back and wait for success and prosperity to come to you. Time marches on, and there is nothing anyone can do about that. However, we can exert some measure of control over how we feel when a decade-long period of time ends.

The daily struggles you go through at work, in school, raising your family, or keeping up with college friends or work colleagues can be tough—even onerous sometimes—but they can make you stronger. In another 10 years, if you want to look back feeling satisfaction rather than regret, you have to put in work and effort now. Sometimes things will not work out the way you want, but as long as you do your best and have the fortitude to pick yourself up and keep moving forward, you will come out a changed person, for the better.

The path The Way Ahead has traveled over the last 10 years reflects this as well. In 2004, TWA was just an idea in the minds

of several young SPE professionals and Giovanni Paccaloni, who served as 2005 SPE President. Since 2005, when the first issue was printed, more than 110 young SPE professionals have served on the TWA Editorial Committee. Three issues per year from 2005 to 2014 have been written, edited, printed, and mailed. This is our 30th issue—Volume 10, Number 3—mailed to around 26,000 young SPE professionals.

Check out TWA’s 10-year archive at http://www.spe.org/twa/print/archives/index.php. Over the years, TWA’s “look and feel” has changed dramatically. In recent years, we’ve ever-more-intently focused each issue’s content around a central theme. And the covers have evolved from somewhat stock industry images to beautiful, full-cover pieces of art. In fact, one of my favorite parts of each issue’s cycle is seeing the cover emerge from an idea to its final form.

Sustaining and evolving excellent content and beautiful covers three issues per year over 10 years has prompted a growing appreciation for TWA. The TWA brand is now so strong that for many in the industry The Way Ahead not only represents the magazine but also the entire population of SPE young professional members.

This very special 10th anniversary issue continues this trend of quality and insight as some of the oil and gas industry’s most accomplished professionals share not only their thoughts about what has transpired in this industry over the last decade but also what they hope to see happen in the next.

I am happy to end my time leading TWA by handing over the reins to TWA’s next Editor-in-Chief, Tony Fernandez. Ten years ago, Tony and I weren’t even aware of each other’s existence. Now, through TWA and SPE, we have gone from being acquaintances to colleagues to friends. I can’t think of anyone better to chart TWA’s course through the first year of its second decade.

Thank you to all those serving on the TWA Editorial Committee this year. The magazine would cease to exist without your hard work and contributions, which you manage to fit into your very busy work schedules. If you are representative of the oil and gas industry’s future leaders, this business is in good hands.

I also want to thank the SPE staff for all their hard work in putting each issue together, as well as Todd Willis, last year’s Editor-in-Chief and now outgoing TWA Advisor. I learned a lot while serving as Todd’s deputy. And during my tenure leading this publication, I could always count on him for clear, thoughtful guidance. Like Tony, he has become my good friend.

So what happens next? No clue—and that’s the fun part! Bring on the next decade. TWA

W

4

TWA InterAct

Social Media and TWA

This issue officially marks the 10th anniversary of The Way Ahead—Volume 10, Number 3—TWA’s 30th issue! A lot has changed during the last 10 years—especially in social media. Social media is now part of most large corporations’ communication strategy and has helped fuel conversation worldwide among TWA followers. Check SPE TWA social media updates and share your thoughts:

• Facebook: The Way Ahead• Twitter: @SPETheWayAhead • LinkedIn: SPE The Way Ahead

Tweets From TWA’s Twitter Page

@SPETheWayAhead—25 March 2014In #kualalumpur for #OTCAsia and to host the 1st @PetroBowl Regional Qualifier! Great view from the hotel room!

@SPETheWayAhead—20 May 2014In the #oilandgas industry, there should be no such thing as an “accident”: fuelfix.com/blog/2014/05/20/in-the-oil-gas-industry-there-should-be-no-such-thing-as-an-accident

@SPETheWayAhead—27 May 2014Is College Worth It? Clearly, New Data Say nyti.ms/1hsyj9r

@SPETheWayAhead—30 May 2014Interesting read on how millennials could upend Wall St, Corporate America. What do you think? Send us your comments! http://www.brookings.edu/blogs/fixgov/posts/2014/05/28-winograd-hais-millennials-wall-street-kamarck

@SPETheWayAhead—13 June 2014Congrats to all the @PetroBowl qualifiers! Good luck! “The Official 2014 PetroBowl Championship Bracket fb.me/2OzHkqz9O”

@SPETheWayAhead—17 June 2014The oil & gas industry has a culture of safety, what about a culture of health?: fuelfix.com/blog/2014/06/17/the-oil-gas-industry-has-a-culture-of-safety-what-about-a-culture-of-health

You Are the Energy Sector: How Do You Explain Energy to Others?

Ways that clearly, accurately, and fairly explain what we do and how we do it to those outside our industry—they’re pretty rare. As a goodwill ambassador for the industry to family, friends, and even strangers, you have a great opportunity to share those rare and trusted sources who write without downplay or exaggeration about oil and gas industry realities.

It would be great if everyone understood more about what energy actually is and joined the discussion. For those who are in the energy sector (likely most of you), this is our livelihood! We’ve listed a few sources here that we trust.

Share your trusted sources with us via TWA’s social media: Facebook, Twitter, or LinkedIn.

Fracturing, Shale Energy, and Oil Sands“Shale Energy: 10 Points Everyone Should Know,”

released by the American Petroleum Institute, October 2013. Available as a pdf.

“The Real Facts About Fracture Stimulation: The Technology Behind America’s New Natural Gas Supplies,” released by the American Exploration and Production Council, February 2010. Available as a pdf.

The US Geological Survey’s frequently asked questions about hydraulic fracturing: www.usgs.gov/faq/?q=taxonomy/term/10132.

Oil Sands Today: Everything you need to know about oil sands, brought to you by Canada’s Oil Sands Producers: www.oilsandstoday.ca.

Stay tuned for more—and send us a note anytime. Got more great, reliable sources? What are your thoughts about the sites listed here—or any others you’ve found? We’d love to hear your review of any of these sites, or others you might come across.

You could be on the TWA editorial team. Turn to page 36 now to find out how to apply and why it pays huge career and personal dividends to help keep TWA’s

creative juices flowing in its next decade.

CALL FOR EDITORS!

TWA Interview

5Vol. 10 // No. 3 // 2014

How did you get started in the industry?

I have worked in the industry my entire career. I went to the University of Illinois, studied chemical engineering, and realized not only did I like engineering, but I also wanted to see the world. So I studied for a master’s of international management and combined that with an MBA program in Dallas, Texas, focused on energy. I started with Amoco, one of the predecessor companies of BP. It was 1979, the price of oil was shooting up, and I was not working on the engineering side at the time, but rather with an economic evaluations group working on new international ventures. So I did get to travel, and I loved the job.

Can you think of specific decisions or relationships that had a lasting impact in your career?

I realized that I wasn’t using my engineering background and I wanted to know a lot more about the business. So I asked the company if I could go back and be an engineer. That was a big break. I went from Chicago, Illinois, to Hastings, Texas, worked as a production/petroleum engineer in the field there and then moved up to Houston as a reservoir engineer for west Texas.

The second big choice in my career was to move to Aberdeen, Scotland, and work as an engineer on artificial lift. Working in the North Sea was one of the most exciting things an engineer could do in the 1980s because that was where all the giant offshore technology was being developed. It was fantastic! That had me hooked on the oil and gas industry, the offshore industry, and moving around.

What are some characteristics one needs to make it to the senior executive level?

I know many excellent executives in our industry, and they’re all different. Some are quiet, some are thoughtful, and some are more spontaneous, but they all ask questions. They learn and are very curious people. They’re all incredibly enthusiastic about oil and gas, they really know their industry well, and they are passionate about the people in the industry. You really have to draw on other people to get things accomplished. CEOs know that everything is usually a lot more complex than it looks, but, at the right point, you do need to make decisions. You have to realize the unintended consequences and the interconnectedness of things in our business. There has to be a sense of stewardship—for shareholders, for their money; and in the case of national oil companies, for their governments. You have to stay connected to the industry, the technology, and the new things that are being developed. You can’t get too far away from that in this industry. You also, I think, need to have a very supportive family who makes many trade-offs along the way.

What is your leadership style?

Being a leader was not really just a goal for me, as much as getting things done through people. I try not to micromanage things, but I am a detail person. I could not be a CEO and rise above all the details. I have to stay connected to the organization. And we do not live in a command-and-control world today. I try to act with respect, trying to always put myself in the other person’s shoes

Bob Dudley, became group chief executive of BP on 1 October 2010. He joined Amoco in 1979 and worked

in a variety of engineering and commercial posts in the US and UK. Between 1994 and 1997, Dudley worked on corporate development in Russia, then joined BP in London in 1999 following the merger of BP and Amoco. From 2003 to 2008, he was president and chief executive officer of TNK-BP. On his return to BP in 2009, Dudley was appointed to the BP board as a managing director of the BP Group with broad oversight of the company’s activities in the Americas and Asia. On 23 June 2010, he was appointed president and chief executive officer of BP’s Gulf Coast Restoration Organization in the US. His broad range of roles with Amoco and BP has given him substantial global experience. Dudley earned a BS degree in chemical engineering at the University of Illinois, a master of international management degree from the Thunderbird School of Global Management, and an MBA from Southern Methodist University.

Bob Dudley Chief Executive of BP

TWA Interview

6

but still drive results and performance. I like working with a team that sits down, argues the pros and cons, and openly debates.

BP faced a major challenge in 2010 with the Deepwater Horizon incident. How has this changed the industry?

If you look at the history in any industry—everything from aviation to manufacturing—there are points in time where bad accidents have happened. And always coming out of those are changes that improve safety and regulation going forward—they make everyone adjust. I think the Deepwater Horizon accident has made the industry further improve its standards universally and rethink the relationship between operators and contractors. And society is working hard now to find the right balance between regulation and the ability to do things efficiently.

What has BP learned from the incident and what has it done to get back on track?

We have had a couple of big industrial accidents that have shaken us. We have been through a period in which a company with great pride in its accomplishments over a long history lost some of that pride, but now I think it is being restored. I think BP is a great business. We want our people to have the confidence to make decisions. But the past decade has also made us rightly question some things about ourselves. I believe this is a healthy part of what any company should do: look at its strategy as well as how it’s organized and what people, skills, behaviors, and capabilities it values.

We’ve found that we have made ourselves overly complicated. Part of that was well-intentioned: We built structures and processes to make sure that we could feel that we were always double-checking and doing the right thing. We of course still want always to

be safe, but we see now that there are ways to simplify the organization while still being true to that vision. Going forward, I see us being more focused—a business that doesn’t do everything, but focuses on what we do well.

For instance, we were a decentralized organization around the world. It’s always easy to decentralize, and there are advantages in a big structure to create autonomous units and say “Go do things and be profitable.” But we now believe that a business of our size, dealing with the kinds of risks that we have, needs to be centralized. We need to have standards that work all around the world. There are many risks that we have to deal with, with great care, and great responsibility. We’ve now centralized project organizations and the functional organizations, so you can move the best people around and devote time and energy on a problem through a function.

What are the most pressing challenges of our industry today? Have they changed in the last decade?

There are two kinds of challenges. There are the above-ground ones, and the below-ground ones. There are huge challenges above the ground, which can be political upheavals, regulatory issues, legal frameworks, or taxation that might not encourage development below the ground, in the rocks. The world has been through troubled times during my 35 years, and it continues to be troubled today. There are simmering conflicts around the world that are starting to connect, so that’s one of the challenges.

We’ve also got the challenge of society’s negative view of the products we make in the oil and gas industry—it’s not a popular industry with everyone. We’ve got parts of society that don’t encourage us to produce the energy we need for growth and development. And then there’s the obvious concern about climate change. I’m optimistic that humankind can solve this problem because, if you go back in time, mankind

burned wood, went to coal over time, then to oil, and now natural gas. I’m optimistic that mankind will solve this problem through a long wavelength transition to low-carbon energy, but probably not as quickly as some would like.

Because energy has been an industry with a boom-and-bust cycle over the last 35 years or more, you have had gaps where people didn’t enter into our business, particularly on the engineering and geoscience side. A great crew change is going to happen. There were 10 or 15 years where few went into the industry, so young professionals are going to have great opportunities that will come along fast and accelerate as people suddenly start moving out of the industry. But gaining experience and getting people to soak up as much as they can—and getting an older generation to pass on as much as they can—is a big challenge.

And below the ground also, technically, high-temperature and high-pressure technologies are going to be part of our future challenges. The better imaging of the subsurface is going to be a really fun challenge for people. And then keeping the oil and gas industry up the technology curve of what’s possible, like constant metering and monitoring. In an airplane almost everything is monitored full time and in real time. There’s so much potential in oil and gas to do that with wells and fields, because when you spend time with people in some other high-tech manufacturing industries, they say we’re way behind.

What are some key technology challenges for the E&P industry?

It’s going to be unique to different geographies. The Houstons, Aberdeens, Stavangers—places like these will be the centers of our remarkable ability to work with seismic data, process it, and make decisions faster. At all production sites we should monitor things much more in real time and learn when problems are happening much faster. One of the challenges is

7Vol. 10 // No. 3 // 2014

to make sure that engineers working with those systems spend time in the field, seeing how it actually works and getting an intuitive feel. There’s the science of it but, like all professions, it’s also an art.

BP published its Energy Outlook 2035 in January. How does BP view the energy industry’s future?

Today there are 7 billion people in the world and there’ll be 9 billion people in 2035. We believe that virtually all forms of energy are going to be needed. Hydrocarbons are not going to disappear.

I like to call it the rule of 27s: From our Energy Outlook, by 2035, 27% of the energy will be provided by oil, 27% by gas, and 27% by coal, almost equally. Renewables will make up less than 10%. We think that 90% of transport fuels will remain oil-based in 2035.

With virtually all the growth coming from the non-OECD world, these countries will have a natural desire for prosperity. Gas is a little different than oil. It appears to be more regional, even though you can liquefy it and move it around. Natural gas has created an incredible boom in the US economy. The oil increase in the US has offset the outages in places like Libya and Sudan in the last year. And if we hadn’t had the increase in oil production in the US to fill this gap, I could see the price of oil being USD 150 per barrel today. So if you link that to people working in our industry, there’s a great future in oil and gas with all kinds of opportunities. It’s not an industry that’s going to “sunset” anytime soon.

What advice would you offer young professionals considering a career in this industry?

You can build a very exciting career in different parts of the world working with different people, cultures, governments, and enormous technical challenges. When you come out of a university,

you are going to enter into an industry with a clock-speed that is going to get faster and faster and the technology will continue to push at the frontiers of science and engineering.

Excellence doesn’t come overnight. Always remember, it takes time to become really good at what you’re doing. Get close to the technology, see it in action out in the field. It’s very important, after a period of time, to either love what you’re doing or get out. I’m not sure I enjoyed my job immediately; suddenly life is more structured and you have to get up every morning and go to work, but now I don’t even look at the clock. That first year of a career is quite different: People don’t give you instructions and tell you exactly what to do, so you’re not sure you’re making a contribution—it just comes quickly with your own personal enthusiasm.

How have you been involved in SPE? How does your workforce leverage company activities with SPE expertise?

I joined SPE when I was working in the field in Texas, and I’ve been a member for over 30 years. I found it a way to network with more professionals. When I was in Russia, we worked closely with SPE’s local chapter and utilized it to develop local talent on a bigger scale and connect people.

I chaired a large SPE conference in Moscow and got other companies and people involved, particularly from around the world. Many BP locations do that to develop a sense of connection with the industry—in Angola, Indonesia, Azerbaijan. It creates a sense of professional belonging around the world that we take for granted when working from one location.

How do you see company loyalty within BP?

What BP and Amoco and Arco did starting in 1998 kicked off a large wave of consolidation of the oil and

gas industry. In many ways the promise of efficiencies didn’t quite happen. I find people at BP and all the heritage companies to be incredibly loyal to the company. People want to see it succeed. They have been through a very difficult 4 years. The people who are working it really just want to get the company back on its feet, and do well, with no arrogance. That’s a remarkable thing, and it’s hard to put a value on that.

We’ve crossed some of the emotional bridges of selling various things that big companies can become very attached to. I think people realize we are a business, so we’ve got to perform in a certain way. I think BP is well-positioned to do that. I’m optimistic about BP’s future, and I couldn’t be more impressed with the dedication of everybody around the world.

What would you mention to attract students and young professionals to join the oil and gas industry?

We just have such an interesting story to tell about what we do—in terms of the high-tech nature of it, the leading-edge technology and engineering, the job opportunities, the vital nature of energy to drive prosperity, economic growth, and provide heat, light, and power for society…much of which we take for granted.

We can do a much better job as an industry in telling our story—because it’s a very exciting industry—and we should get young people to think about the industry earlier, so that these great careers are in their sights.

Every person who’s a member of SPE should try to tell that story—in high schools, colleges, and communities—so that more of us can make this essential contribution to society, providing critical supplies of energy to the world, and at the same time enjoying greatly varied, challenging, and deeply rewarding careers across the world. TWA

8

HR Discussion

With continuous development in energy policies across many countries, the great crew change, and increased international oil and gas trade, the hydrocarbon sector has reached a crossroads. On the one hand, the demand for oil and gas is constantly increasing; on the other hand, issues such as greenhouse gas emissions and climate change, pricing, security of supply, and constantly increasing exploration and production budgets are pressing the industry severely.

To meet continued increasing demand and offset the challenges, skilled human resources are key. The challenge for companies is to develop rigorous talent management systems to help ensure availability of the most-experienced, best-trained, best-educated, most-flexible, and most-adaptable people for the industry and then find meaningful and creative ways of retaining them while also using them to truly enhance the company’s productivity and profitability.

In the last 10 years, the oil and gas industry has seen major changes in trading practices throughout the value chain. Deregulation of petroleum products in India led to increased

competition mainly in the downstream sector. This, in turn, forced companies to change hiring patterns to better cope with the higher standards and requirements that became prevalent in the market. Retirement rates are still increasing, giving rise to the industry’s current talent crunch.

In response, the industry’s recruitment focus has shifted toward young professionals and graduates.

The upstream sector clearly requires specialized technical expertise—but at a very demanding level—to tackle major technical challenges, such as figuring out how to turn around reserves on the verge of depletion. Thus, hiring is aimed toward engineers and highly specialized recruits who have the knowledge and skill to create effective solutions.

The sector now demands such high levels of investment, that companies focus on hiring the best-of-the-best talent—with experienced candidates highly valued—so companies enjoy immediate return on investment.

Companies are now building detailed plans into their budget processes to fortify their talent pools and improve their capabilities. Specialist skills are more valued today than at

any other time in the past 2 decades. Industry leaders have re-envisioned their upstream operating models: These models are technically thematic organizations, with the focus on asset-based models in an attempt to get a better handle on costs, identify specific technical needs, and build effective solutions. The purpose is to allow the development of strong, differentiated core capabilities—an important ingredient for sustainable growth.

These changes call for rigorous and focused recruitment, training and development, and retention programs. The hiring pattern now is to seek out fresh and talented recruits who can learn and grow to fulfill the longer-term need to sustain the industry—learning the industry’s old arts while bringing in creative and innovative ideas.

Global OutlookEnergy, key to achieving high growth rates in all sectors, is considered the lifeline of any country. It has helped fuel India’s growth since independence in 1947 and will remain the key driver of economic growth in years to come.

The Indian oil and gas sector is likely to require around 25,000 additional professionals—almost 50% more than the sector’s total employment now—in the next 5 years due to business growth and retirement or attrition in the sector.

In this part of the world, awareness of the oil and gas industry is rising, with more and more academic institutions emerging that cater to the energy sector. The focus here is definitely on the extraction of hydrocarbons— and even more on the exploitation of mature fields—as we look to rise as an economy,. Asian countries are looking

Recruitment Trends and Talent Management—10 Years: A Panoramic ViewP.C. Bahuguna, University of Petroleum and Engineering Studies

P.C. Bahuguna teaches strategic human resource management, organizational behavior, and economics at the College of Management and Economics Studies, University of Petroleum and Energy Studies, India. He is an experienced trainer, consultant, and administrator for companies in the consultancy services, hospitality, and printing industries, among others. Bahuguna’s academic papers have appeared in several international journals. Besides organizing and conducting in-house training programs, he facilitates sessions on people skills and performance management for organizations from different industries, including the oil and gas and power sectors. He holds a bachelor’s degree in science, an MA in economics, an MBA, and a PhD in management.

9Vol. 10 // No. 3 // 2014

towards African and Middle Eastern oil-rich areas to boost their production capacity. China, in addition to India, is acquiring stakes and blocks abroad to add to their existing capacity. Even Indian downstream companies have started participating in acquiring blocks abroad. This has given rise to new projects and has generated new job opportunities.

Changing Approach Towards Talent ManagementCompanies will have to deploy some kind of rotational program that includes international assignments to ensure a constant and uninterrupted talent pipeline for leadership roles. Besides the focused and intense in-house training system, companies will also have to look for alliances to gain new capabilities and access to resources. Partnerships between companies with different priorities and areas of expertise are essential.

Today, firms need to have a geocentric approach to hiring because finding appropriate local talent in some localities is almost impossible. Previously, people received on-the-job skill training, and that worked out to a great extent. Now however, with advancements on the technological front at their peak, the demand for specialized talent is on the rise, which in turn is reflected by several planned specialized academic courses coming up. Although it is always an option to train new recruits, those already with required skill sets could help the employer eliminate the necessity of elaborate training and can utilize the talent from day one. In my opinion, companies can eventually employ a fair mix of both general management skills and specialized skills instead of focusing on just one stratum.

Future Recruitment TrendsSince the advent of fierce competition, share cannibalization along with the talent crunch scenario, employers are having to figure out the right mix of general and specialized skill sets. The scenario would require hiring patterns

to take into account the need for strategy building, brand enhancement, value generation to cope with the competition along with the technical challenges and advancement to be undertaken.

Earlier, the trend was to hire from domain-specific universities in the energy sector. But increasing competition led to focusing on the premier institutes to get the best workforce. There should exist a balance between the two to best adapt to the existing challenges. The pattern of recruiting in the coming years will be to increase hiring so as to bridge the gap of the crew change. With more potential employees to choose from, the hiring will definitely be more competitive. With innovative, creative and fresh talent on the rise due to the increased awareness about the energy sector, the dearth of talent is definitely coming to an end.

Shale Gas Discoveries and Increasing Production WorldwideWith the shale boom, those specializing in unconventional resource exploration and production have an edge over others. Today, many upstream players in India are keen on recruiting individuals with specialized knowledge and training.

With shale gas discoveries and production worldwide, particularly in the US, Canada, Australia, Finland, and China, there is a real incentive to acquire new skill sets. This is possible only through exchange programs and tie-ins with the corporate sector. For example, oil and gas companies in India such as Reliance Industries and Gas Authority of India have already acquired shale gas assets in North America and deputed its petroleum engineers for on-the-job training.

Graduates with Specialized Oil and Gas Education/Training Until now, having previous industry work experience was valued more than having fresh talent unsullied by the real world. But as the older “crew” moves into retirement and the younger “crew” joins the industry and matures with more

and more experience, those wanting to be recruited will now also need to gain prior experience.

More emphasis is placed on the midstream and downstream in this part of the world because underexploited reservoirs are maturing yet still hold respectable quantities of unrecovered oil. That said, some companies also engage in vigorous exploration campaigns. Currently, many jobs have been created that concentrate on an individual’s technical capabilities. In India, a majority of the upstream sector consists of private players, whereas downstream is dominated by government-owned public-sector undertakings (PSUs). Upstream players hire based on technical expertise and experience profiles. PSUs recruit employees both through the national level exam process and campus visits.

Joining the Oil and Gas Industry All who want to be part of the energy sector must first focus on building their basic skill set, because this industry requires solid understanding across several disciplines due the interdisciplinary, team-based nature of the work. After honing their technical acumen via the most suitable university courses, programs, and degree curricula, they can then specialize in specific subdomains of interest, as specialization is also required in this swiftly progressing, technologically savvy sector. Institutes with degree programs that concentrate mainly on the energy sector should also include managerial-skill development and broad general-industry topics in the curriculum.

In a sector so different from other sectors in each and every way, a strong basic skill set across many disciplines, an intense focus on one or two specialized subjects, a well-developed managerial skill set, and an understanding of broad industry topics—all are needed to excel in the energy sector. TWA

10

Forum

Between training programs and moving to new locations, a lot can happen in the first 10 years of your career. The TWA Forum team informally talked with our colleagues and found that people whose backgrounds appeared disparate often voiced similar themes regarding what they learned in their first 10 years in the “real world” of the workplace. Below are the nine life lessons that emerged from these discussions—plus one for you to write.

1. What you do, or don’t do, creates the reputation you have amongst your peers. Be responsible for yourself—your conduct, your actions, and your behavior.

Your reputation in the oil and gas industry has been building since the day you entered the game and is being continually developed daily amongst your peers, co-workers, and other professionals. How you interact and deal with your coworkers, management, clients, suppliers, and contractors all play a direct role in developing and maintaining your reputation in the industry.

Your reputation is related to the value you bring to your company. And remember, first impressions definitely count, so always give a respectable handshake and smile. Timothy Price, president at Heath Energy Products Corp., says, “This is an industry where you will cross paths with thousands of people who all cross paths with each other. Therefore, nothing is more important than your reputation.”

When transitioning to a new role, realize that you should always “uphold your reputation, it will precede you and

hold you accountable,” says Darren Vaught, special projects manager at Hydessco.

What underpins reputation is integrity. Larry Bartram, region account manager at Halliburton’s Multi-Chem, notes, “In any industry, honesty and integrity are first and foremost. Your reputation is of paramount importance to your success.”

2. Hold true to your integrity so that you can produce sound engineering work that aligns with your values. At its core, integrity means alignment between what you do and who you are. Being who you are can be defined by your personal values.

Professor Steve Begg, head of the Petroleum Engineering School, University of Adelaide, Australia, says to “never lose your integrity. The big ‘wrongs’ are obvious, though not necessarily easy to deal with. It’s the small things that can gradually lead you astray—no one instance itself seems that bad.”

Know that your decisions are impactful, and the results have some probability of spreading publicly across a wide swath of people. Chris Buckingham, program director at the Fluid Dynamics and Multiphase Flow Program at Southwest Research Institute, notes that “In all that you do, everywhere—not just at work—seek to have a reputation for impeccable integrity, only making decisions you wouldn’t mind being posted on a billboard at the side of the highway.”

3. Don’t let problems fester. Approach issues immediately, and talk with people to get your concerns voiced

early on so that action can be taken. If necessary, changes can occur and if not, you can work on understanding the reasons why. Being able to go to sleep at night without worrying is a key indicator of how people deal with their problems.

Being able to—and actually—speaking up is critical to success, particularly in the context of safety. The oil field is one of the most dangerous places in which to work, but with the correct mindset and proper measures in place we can prevent accidents from occurring. Maintaining safety as an integral value will go a long way to having a long and successful career in the industry.

Imran Qaiser, directional driller and field engineer at Schlumberger, notes to “always take 5 minutes to analyze any task before proceeding. Communications is key. You have the authority to stop any job if you feel it [is] not safe.”

4. Know and plan to your rhythms to develop a sustainable routine. Plan accordingly, especially if you have weeklong training, vacation, or other events throughout the year. If you have the ability to control your schedule, try not to have a big meeting the day after a lengthy vacation. Try to arrange your vacation to occur after a major business planning cycle.

Though some schedules are unpredictable, elements of anticipation can still be engineered throughout the day. Even making small tweaks in when you perform detailed technical work and make decisions can have large gains in productivity. David Rock, director of the NeuroLeadership Institute, writes that “your ability to make great decisions

Excelling in Your First 10 Years:Ten Life Lessons Jakob Roth, Schlumberger and Islin Munisteri, BP

11Vol. 10 // No. 3 // 2014

is a limited resource…this means not thinking when you don’t have to, becoming disciplined about not paying to attention to nonurgent tasks unless, or until, it’s truly essential that you do.”

The cadence of the day can be arranged accordingly by focusing on the most important task each day. “For nearly a decade now, I’ve begun my workdays by focusing for 90 minutes, uninterrupted, on the task I decide the night before is the important one I’ll face the following day. After 90 minutes, I take a break,” says Tony Schwartz, chief executive officer of the Energy Project and author of Be Excellent at Anything.

5. Create a boundary between work and other facets of life to stay focused. Expect burnout if you cannot hold to these boundaries. It means not checking email when spending time with friends at a restaurant. It means not looking at Facebook while trying to read a technical paper. Freedom can be found in boundaries.

“Human beings are not designed to do activities simultaneously, but rather successively. In a world of relentless demands, it is only possible to main a high level of intensity if you create boundaries,” says Schwartz.

The key to creating the boundary is in understanding your own and your manager’s expectations, and ensuring that there is alignment between the two. According to an article in Fast Company, Ken and Scott Blanchard recommend that you and your manager each create separate lists of things you are held accountable for in your role. Afterwards, prioritize the list and ensure that you and your manager agree on the most important tasks. Having regular check-ins ensures that you and your manager stay aligned throughout the year.

Know that there will be times when work is a 24-hour-a-day marathon, such as during operations when your well is being drilled. However, there will also be times the focus will be planning the well or defining drilling rig specifications. Understanding the difference in response time between the two—operations and planning—

is important in determining where boundaries can be defined.

6. Create and maintain your community. It is 2 a.m. A major problem is happening. You take the call and give a quick answer, but there are more engineering details involved. Know who you can turn to when you need help. Other people have faced many problems and have a lot of experience you can draw upon. You can find a solution simply by asking and listening to people in your network. Take notes when talking to these mentors—not just technical details, but also their personal lives so you can reconnect the relationship at a moment’s notice—even if you generally stay in touch in the first place.

In a Harvard Business Review article by Priscilla Claman, she recommends setting up a personal career “board of directors” you can consult and receive feedback from so you can grow. “The people on your board of directors should know more than you about something, be better than you at something, or be capable of offering different points of view,” writes Claman, president of Career Strategies Inc.

Often, one person alone cannot advise on both reservoir modeling and emulsion properties. Look inside and outside your company to develop those relationships—so that when you need it most, the experts are there for you. Often, these folks are found in previous roles, college, and online—on SPE Connect, LinkedIn, and other forums. The occasional email sent to the professors who helped you graduate goes a long way in maintaining those relationships. After moving on from one role to another, don’t neglect the previous relationships you made.

7. Never stop learning, and mature from your mistakes. There exists of a plethora of resources that can be very beneficial both technically and professionally in your career. Learning occurs in formal settings, such as training and in college, as well as on the job through executing your projects.

Regardless of the ways you’ve devised for retaining new knowledge, keep on learning something new, even from colleagues who sit next door. Thalbert “Thal” McGinness, a consulting petrophysicist, notes that you should “always be willing to listen first and learn something every day.”

Failure, though at times embarrassing and painful, is often where the best learning occurs. “Always remember, learning is a never-ending process. Listen to everyone, but apply your own mind. Take responsibility for your failures and more importantly—learn from failures. It is the failure which is our real teacher,” says Dr. Milap Goud, technical manager–Asia Pacific at Q-Max Solutions Inc.

The approach to learning is just as important as what is being committed to memory. Having an open mind enables the lesson to be learnt well the first time. “Always be anxious to learn because everyone around you knows more about something than you do,” says Heath Energy Products’ Timothy Price.

8. Field experience is critical. In the multidisciplinary oil field, gaining even a general understanding of field operations can save you and your company time and money. The knowledge gained by going to observe operations—or better yet, performing those operations—will help in asking the right questions about why cost and time were under-or over-projected.

According to David Dixon, a graduate production technologist (production engineer) at Shell, “[There is] no substitute for field experience. Theoretical understanding is great but you need to see it happen to understand the risks involved in any operation.”

Glenn Vawter, executive director at National Oil Shale Association and president of ATP Services, cuts to the core regarding the value gained from firsthand field experience: “If you don’t know what it takes to get it done in the field, you cannot design programs that can be carried out by those talented

Forum

people who really get the work done, and done right, and done professionally.”

9. Be open to and accept change. In a publication titled “Nuclear Energy and the Fossil Fuels,” M. King Hubbert predicted in 1956 that peak oil in the United States would occur between 1965 and 1971, However, he did not predict the rise in oil production from tight oil. Using a combination of hydraulic fracturing and horizontal drilling, the ability to produce from low-permeability source rock would not become economic until more than 40 years later. However, now those technologies have unlocked tight source rock and

are driving current US oil and gas production. Dixon notes, “Always expect the unexpected. The oil and gas industry is terrible at predicting anything. Always have a back-up plan.”

10. Write your own life lesson learned in the oil field. Think about and reflect on the critical lessons you have learned. Pick the most important lesson, and write it down. Discuss this topic with your colleagues and personal board of directors.

This is not a hard-and-fast list—remember you will keep learning—so keep adding life lessons with each valuable insight you gain. TWA

Fig. 1—US crude oil production versus Hubbert Curve. Data Source: United States Energy Information Administration.

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SPE Bookstore

Chemistry for Enhancing the Production of Oil and Gas Wayne Frenier & Murtaza Ziauddin

Chemistry for Enhancing the Production of Oiland Gas provides an overview of the scienceand technology of the use of production chemicals to enhance and maintain oil and gas production. Geared towards a technically trained audience, this new book emphasizes the technical aspects of production management from the perspective of the upstream oil and gas industry.

Contents• Introduction

• Chemistry of Production Impairment

• Formation Stimulation With Reactive Chemicals

• Propped Fracturing Chemistry and Applications

• Improved Oil Recovery Chemical Applications

• Health, Ecology, and Safe Handling of Treating Chemicals and Produced Fluids

Preview sample pages from this new book and order your own copy by visiting our online bookstore at www.spe.org/go/books.

Print and Digital Versions Available

NEW TIT

LE

Celebrating 10 Years of Fresh Energy &

Creative Ideas!TENTH ANNIVERSARY ISSUE

13Vol. 10 // No. 3 // 2014

Economist’s Corner

For the oil and gas industry, the last decade (2003 to 2013) has been one of “resilience, extraordinary innovation, and, despite setbacks, significant gains in safety and environmental conformance,” according to Paal Kibsbaard, chief executive officer of Schlumberger, in his report “A Decade of Upstream Technology Innovation” included in the World Petroleum Council’s 80th Anniversary Edition report (2013). The industry remains strong, after sustaining humanity’s supply of oil and gas and thereby meeting more than half the global energy needs throughout the decade.

In the June 2010 issue of the Journal of Petroleum Technology, Behrooz Fattahi, 2010 SPE president, said the industry has been focusing on the concept of sustainability or its components “for a long time, but under different descriptive terms—optimizing production, maximizing reserves, reducing cost, cutting waste, increasing efficiency, optimizing processes, minimizing footprint, maximizing safety, reducing environmental impact, and increasing corporate social responsibility.”

Sensitivity to all these factors is required when looking back on the industry’s last 10 years and looking ahead to the next 10 years. The oil and gas industry has always been a risky

business for many reasons—from geophysics to geopolitics.

Technology-Driven DecadeThe oil and gas industry has been technology-driven since “Colonel” Edwin Drake developed a method for producing large quantities of oil in 1859. And while the last decade has shown no giant discoveries like those made in the 1950s, technology developed during this time has helped the industry in many ways.

Engineers now understand complicated reservoirs much better through ever-more-sophisticated 3D modeling. The industry can drill in increasingly hostile environments including ultradeep water. Natural

gas, including unconventional gas, has emerged as a strong player in the international market. Horizontal wells with several kilometers of reservoir contact have become a reality. Real-time drilling data is ever more precise and abundant. Rock physics and reservoir simulation have evolved significantly. Many enhancements in production technology have been developed. Subsea engineering has advanced at a rapid pace.

Until the latter part of the decade, much of the industry thought the moment of “peak oil” was just about to arrive. But with the emergence of nonconventional thinking, particularly related to technology, further oil and gas development has not only delayed peak oil but has provided extremely good challenges for the industry in tackling how to convert unconventional resources into reserves. This has become possible due to a sustained high-price environment.

Oil Price Elasticity in the Last DecadeAs illustrated in Fig. 1, oil prices were extremely low in 1998. Crude oil prices steadily rose between 1998 and 2008

Reflections: The Last Decade and the Next DecadePradeep B. Jadhav and Lalitkumar K. Kshirsagar, Maharashtra Institute of Technology

Lalitkumar K. Kshirsagar is holder of the ONGC Chair and principal of the Maharashtra Institute of Technology, University of Pune, India. Objectives of the chair are to promote knowledge and excellence in the area of petroleum engineering through research, training, workshops, and work associations. He has more than 25 years’ experience in the oil and gas industry as a professor, leader, subject-matter expert, and industry advisor to both profit and nonprofit

organizations. Kshirsagar received the SPE Regional Outstanding Service Award for Middle East, Africa, and India in 2006.

Fig. 1—Oil prices since 1995, comparing trends for different brands (or grades)of crude oil.

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Economist’s Corner

and then took a steep tumble during 2009. In the following years, crude oil prices survived the 2009 drop to 2006 prices, and climbed back to or above 2008 levels by the end of 2013.

A higher crude oil price allows companies to drive higher investment in extraction techniques, and market forces drive green innovation at every level. However, just to keep production at today’s levels, more than half of the energy-supply investment is needed.

The price differential in brand oil has slowly become more marked since 2003. In the last 2 years, the price differential between WTI and Brent has been more than USD 15/bbl.

A cursory look at the quality of oil produced between 1995 and 2012 all over the Earth (Fig. 2) shows an almost 30% production increase in medium and sour oil, and a production decrease in light and sweet oil that showed an upswing in 2012. Despite the decrease in production

of light and sweet oil, it still contributed an average of around 15% to total world production during the last 10 years.

The presence of a high-oil-price environment in the international market shows a corresponding impact on the economies of oil-importing countries, enrolment of petroleum engineering students, market opportunities for new entrants to the industry, mobility of young professionals, research funding, and also on projects related to emerging and peripheral technologies.

Access to ReservesAccording to John Mitchell et al. in their 2012 Chatham House report, What Next for the Oil and Gas Industry?, “The top 50 companies controlled 94% of world oil reserves in 2010, up from 86% in 2000; of the world’s oil reserves 86% are state-owned, while the proportion under private ownership in the top 50 companies is roughly 8%: If all smaller companies are included, private-sector ownership would be about 14%.”

However, Mitchell et al. point out that national oil companies’ (NOCs’) share of oil production is only 55% “because of their more conservative depletion policies and lack of investment, as well as obstacles to private-sector investment by foreign companies.” A few NOCs have become more aggressive due to higher consumption and limited resources in their region and have formed consortiums with international oil companies (IOCs) in developing areas such as Angola and Nigeria. In addition, during the last decade international service companies have merged with or acquired a significant number of independent companies with specialized technology, which has provided the large service companies with greater diversification.

When NOCs acquire frontier basins, they often lack the experience or technology to adequately tackle the challenge and manage the risk. Therefore, it is advantageous for NOCs to accept partnerships with IOCs and service companies that have the needed technology and experience.

Fig. 2—Quality of crude oil produced between 1995 and 2012. Data source: Eni.

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Fig. 3—Examples of disruptions in oil production and long-term productive capacity.

15Vol. 10 // No. 3 // 2014

Geopolitical factors can easily disrupt crude oil supply, which plays a major role in the economic growth of many countries. Disruptions during the last 15 years effectively reduced crude oil production in certain geographic regions, such as those illustrated in Fig. 3, resulting in significantly lower production than capacity, which affects project profitability.

When oil prices and gross domestic product (GDP) growth rates are tracked on a global scale, there is an interesting interplay between their trends. Between 2008 and 2009 oil prices sustained big impacts; large drops in GDP growth rate came significantly after the oil price shock. The GDP growth rate was very low in 1998 and very high in 2008. The volatile environments in Iraq, Egypt, and Iran continue to have a significant impact on the price of oil.

Technology Growth: Past and FutureThe rise in challenging oil and gas resource targets, as illustrated in Fig. 4, clearly demands an accompanying growth in geophysical understanding and also increasing expenditure for equipment, vessels, techniques, and technology—and their development. Because drilling occurs in ever-more-challenging and hostile environments, global E&P spending is poised to reach a new record in 2014, estimated at USD 723 billion, up 6.1% from USD 682 billion in 2013.

According to Douglas-Westwood’s 2014–2018 market forecast, global subsea hardware capital expenditure could total USD 117 billion during the forecast period. The energy research group expects subsea hardware spend will be highest in Africa, Latin America, and North America, with these regions providing almost half the total expenditure. The rising expenditure will essentially be due to work in extreme environments; short supply of rigs, ships, and people; production in environmentally high-risk areas (climatic uncertainty); operation in politically high-risk areas; and giant declining mature fields. However,

key technology challenges will be in reducing environmental footprint during drilling and completion and aiming for zero-emission well tests.

According to Bob Dudley, BP chief executive officer, in the 2013 Fuellers Annual Energy Lecture he gave, titled “Certainties and Surprises: The Unfolding 21st Century Energy Story,” “while smart technology matters, smart people matter more. One absolute certainty is that the baby-boomer generation is now retiring and the growing industry will face a shortage of highly skilled engineers, technologists, geologists, and other professionals. So we urgently need to show young people—around the world—that this is

an industry with a great future as well as a great past.”

New Entrants and Young ProfessionalsA clear relation between oil prices (Fig. 1), GDP growth, and placement in the petroleum industry (Fig. 5) can be seen.

According to the Schlumberger Business Consulting 2012 Oil and Gas HR Benchmark, by 2016 the shortage of experienced petrotechnical professionals (PTPs older than 35) is projected to reach 20% of the talent pool—equivalent to lacking 15,300 experienced PTPs who would be needed to shore up the projected existing total pool of

Fig. 4—Oil and gas resource targets accompany technology challenges.

Fig. 5—Growth in petroleum industry employment versus all private sector employment. Source: US Bureau of Labor Statistics.

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experienced 74,300 PTPs. However, in most petroleum-related disciplines, the supply of new graduates is expected to be almost 40% more than demand 5 years from 2014.

The petroleum industry demands from our future leaders and managers a basic understanding of the oil business and the global market—trends, risks, and economic implications. Knowledge about major oil and service companies and their markets and geographic areas of operation is also necessary since professional development and promotions often come with reallocation to a different region or country.

Attitude towards work, general working skills like protocol following, thinking out of the box, adaptive nature, ability to think of alternative solutions and providing them quickly, and a basic knowledge of disciplines will be required because automation will take over routine work.

Challenges for Universities The petroleum industry has a reputation for offering global opportunities and high salaries to competent engineers. This has played a role in the significant rise in student enrolment in university petroleum engineering programs all over the globe.

Recognizing that high expectations might cloud students’ judgment about their petroleum industry career prospects, Texas A&M University recently sent a letter to their incoming students advising them to be realistic about future job growth.

Are we producing surplus engineers? If so, salaries and opportunities could fall as competition for positions rises. Future hiring may increasingly be based on significant differences in talent among large numbers of graduates rather than on companies vying among each other to entice a few among a small number of graduates.

In August 2013, SPE sponsored a week-long Forum, the results of which were published in a white paper titled 2020 Foresight: Ensuring Educational Excellence for Upstream Engineering

Resources. The following are two key issues the 47 participants identified:

• Nearly two-thirds of the US faculty will qualify for retirement in the next 10 years.

• Many new petroleum engineering PhD graduates lack industry experience. Those recruited into faculty positions from other disciplines also typically lack practical industry experience.

In their 2005 Oil and Gas Business online journal article, titled “Looking Ahead: Challenges for Petroleum Engineering Education,” University of Alberta authors J.C. and L.B. Cunha state, “The evolution of technology as well as the increasing presence of computerized tools in nearly all stages of the exploration-production process has generated new needs in the educational system. One frequent comment is that academia not always has evolved fast enough in order to meet those needs.”

As exploration and production shift to ever-more-difficult and challenging

areas, petroleum engineering curricula need to add focuses on environmental and climatic issues, sustainability, and the changing energy mix. The SPE Forum emphasized the need within petroleum engineering programs for industry-driven, interdisciplinary project courses that are generally difficult to develop and conduct without the requisite work experience or understanding of the industry. Academia also needs to identify and/or develop competent teaching professors to avoid possible gaps in training and education that future engineers will increasingly require in dealing with the demands of a lifelong career in the energy industry.

Industry initiation and collaboration with academic institutes regarding accreditation and an SPE graduating matrix need acceleration to produce employable engineers. SPE has already taken significant steps to encourage students and faculty members by way of organizing value-added events. TWA

Pradeep B. Jadhav is a professor and subject-matter expert in petroleum engineering, as well as head of the Petroleum Engineering Department at Maharashtra Institute of Technology, University of Pune, India. He has more than 20 years’ industry experience. Jadhav works as an advisor, speaker, and member of oil and gas organizations, associations, and committees. His recognized professional expertise is in petroleum geology, integrated reservoir

studies, petroleum economics, and international oil and gas business strategy.

17Vol. 10 // No. 3 // 2014

Pillars of the Industry

In 2000, information technology employers were the companies with the most prominent campus recruitment efforts, but I wanted to enter the energy domain. At the time, options were limited and wireline logging and perforating engineering were among the only domains to enter.

Looking back, it was the best thing to have happened. Oil was trading at about USD 30/bbl with energy needs continuing to grow in emerging economies such as China and India. The ongoing need for oil would keep demand high for oilfield workers—an observation I made early on.

Multiple Oilfield Services Career OptionsMost new graduates begin their careers as trainees in the field. For many, after only a few years of working in the field, the question becomes when and how to pursue alternative opportunities. There is no easy answer.

The last 10 years have provided a variety of options. Today, the industry needs people with deep knowledge—subject-matter experts—as well as those who are jacks of all

trades, understanding an operation from a holistic perspective. Different domains, such as geology, geophysics, petrophysics, and drilling and completions, are evolving toward a common goal of improving overall efficiency through collaboration on a common platform. A driller needs to understand the subsurface to optimize drilling and a subsurface expert needs to understand drilling limitations to optimize well placement.

I moved from wireline to directional drilling in 2005.

It couldn’t have been a better time to move from one domain to the other. Operators were realizing the potential of increasing well production through high-angled profiles, and also, in India, the focus moved from offshore to land wells. Land wells offer a good career buffer zone, where trainees can go as additional hands and develop their skills. The only downside was that I had to start over again as a trainee.

Was it worth it? Yes. The reason is simple: When we

graduate from college and get into a particular domain, it is the best domain available to us at the time, but we do

not know if we want to stay within it throughout a long-term career. After some experience, we learn about other options available in the industry and we want to try them out. Remember the saying “Grass looks greener on the other side.”

You will work on average 35 to 40 years before retiring. If after 3 or 4 years you get the urge to change domains, you could ask yourself: “Would it be OK to try it and not like it? Or not try it and then regret it?”

With 5 years’ experience, I could have gone back to wireline anytime but I chose to broaden my skills and stick to drilling. Some of my colleagues pursued their career with wireline and they are now domain experts and product champions; some became coordinators and moved to bigger roles managing multiple product service lines; some like me changed domains but are continuing in field operations. All of us have some unique and satisfying career options to pursue and that is what pursuing multiple career options in the services industry can do for you.

I made the transition from a multitude of field roles to an office-based job managing well engineering services for Halliburton Consulting.

My field experience helps me immensely with our clients—providing me with quick insight into understanding how to tackle problems and then guiding a team toward reaching the optimum solution.

The Decade’s Defining MomentsIn my opinion, two major events have defined drilling activity over the past 10 years.

One is the rise in crude oil prices from about USD 40/bbl to about USD 100/bbl, with some declines in

A Decade of Career Choices and Defining MomentsVivek Sharma, Halliburton Consulting

Vivek Sharma is the well engineering services manager for Halliburton Consulting in the Asia Pacific region, where he is in charge of a team of drilling engineers and geomechanics specialists. He is also a subject-matter expert on industry standard drilling software and drilling engineering and conducts training courses on these subjects. With over 14 years’ experience in the upstream oil and gas industry across leading service providers, Sharma has previously worked as

a wireline engineer, LWD (logging-while-drilling) engineer, senior directional driller, and drilling advisor. He joined the oil industry after graduating in 2000 with a bachelor’s degree in manufacturing process and automation engineering from Delhi University, India. Currently, Sharma is based in Kuala Lumpur, Malaysia, where he lives with his wife and daughter.

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Pillars of the Industry

2008 and 2009. The reason is due largely to growth in demand from developing economies.

The other, sadly, is the US Gulf of Mexico Macondo blowout and explosions on 20 April 2010 and the associated aftereffects.

The bottom line, however, is that crude oil prices have hovered between USD 80 and USD 100/bbl since 2009 and growth has continued in unconventional and deepwater developments previously considered economically marginal.

“Unconventional” refers to exploiting shale or tight formations as a source of hydrocarbons by means of inducing fractures in the promising pay zones. Such field development requires extensive planning—from seismic through to stimulation.

Any such initiative requires the cooperation of a multidisciplinary team consisting of a geophysicist, petrophysicist, geologist, reservoir engineer, stimulation engineer, geomechanics expert, and drilling and completions engineer.

Deepwater exploration and development is another important activity that has increased in the past 10 years. There is an increase in rig activity drilling in deep water reaching 3000 m. The cost of running deepwater operations is much higher than onshore or shallow-water operations, but expoiting deepwater plays is justified due to high crude prices.

After the Macondo incident, safety regulations have become stricter. Deepwater well designs have to pass through level 1 and level 2 certification for an uncontrolled blowout. Geomechanics has now become an important consideration for well design including pre-drill, real-time, and post-drill activities.

The company where I work provides real-time pore-pressure analysis on rigs and in their real-time operations centers. In addition, different operators across the world can see the same 3D geomechanical model of a particular field. A pre-drill, real-time, and post-drill geomechanical analysis is very useful to ascertain the pore-pressure

profile and stress regime in the wellbore. This results in safer drilling practices, greater drilling efficiency, and improved knowledge-sharing for better in-situ modeling of well geomechanics.

What we have seen over the past 10 years is the integration of data with real-time operations. The approach toward solutions is becoming increasingly predictive rather than post-mortem.

Currently, we have software and processing power that can perform predictive modeling for a number of outcomes at each exploration and production stage, from reservoir modeling to well design. Operators are entering the field with more insight than ever before. Even wildcat wells are being drilled drawing insight from 3D seismic data with much more information about the subsurface compared to what was previously available.

In addition, many new logging tools and techniques are under development to provide more subsurface information, based on reservoir fluid sampling, azimuthal and deep resistivity, micro imaging, dipole sonic with multiple wave data, neutron activation logs, and more. These new technologies, when interpreted correctly, can give an operator better insight into where to drill, how to drill, how to complete, and how to produce the reservoir most efficiently.

What to Expect During the Next 10 Years?Over the next 10 years, we will continue to see growth in unconventional and deepwater activities. Mature field re-development, infill well drilling, and improved recovery will also be areas of continued growth going forward.

“Digital oilfield” will be the starting point of any oil-and-gas-related activity in the future.

Visualization platforms that can integrate seismic, geologic, reservoir and drilling data will give operators the information with which to make intelligent decisions; these integrated information visualization platforms hold the key to optimizing reservoir performance. These digital oilfields

might be based on artificial intelligence networks and could be self-learning. The process has already begun; it starts with larger operators entering the process earlier and eventually the technology percolates down to smaller companies. The modules on the visualization platforms will be updated regularly as the new data comes from field operations.

Exploration and development teams of the future will be working as a team more than ever before. Instead of each domain having a vertical structure, there will be a need to form horizontal teams comprising personnel from several different domains.

These teams would collectively use the integrative digital oilfield to maximize returns by simulating all future activities to be carried out over the life of the well. Under such circumstances, old ideas and methodologies for well management would be subject to constant challenge that could give way to strategies that appear to be more effective.

Recommendations for Early-Career ProfessionalsOver the past 10 years we have seen tremendous growth in the energy industry, with unconventionals, especially in the US, becoming an economically and technically viable option.

Wells with increasing complexity and depth (e.g., extended-reach drilling) are being drilled today that would have been unimaginable 10 years ago.

Such growth will continue to be assisted by improvements in 3D visualization techniques.

Safety and environmental considerations will become more defined and stringent as a result of the loss of life and wealth due to the Macondo incident that shook the entire industry.

The most significant contributions will come from the mindsets of those willing to change and adapt to new and innovative ideas, however challenging they might sound. TWA

19Vol. 10 // No. 3 // 2014

SPE 101

In 2004, SPE assigned the first editorial committee to The Way Ahead, whose mission was to deliver, year in and year out, a publication for—and by—young professional E&P industry SPE members. A decade later, you hold in your hands proof of the success they and subsequent editorial committees achieved: The Way Ahead magazine is an established, consistently excellent published petroleum industry magazine.

The success of TWA in its first decade is partially due to the significant position that young professionals strove for and now hold in the global industry workforce. That was a profound transformation—but not the only one the industry experienced during this period. The last 10 years have also brought several changes to the petroleum industry’s economic and technological scenarios.

What about SPE? What is SPE like today compared to 10 years ago? Has SPE really evolved in response to the changes the industry faced during this time?

If you recently participated in an SPE event—the 2014 Annual Technical Conference and Exhibition in Amsterdam, for example—from the number and origin of the other attendees you met there, you probably noticed how global SPE has become. You might also have observed the variety of technical themes covered and the quality of presentations delivered. Those impressions might be considered evidence showing how the society has grown especially during the last 10 years.

Today, when you visit the SPE website and search for an event that matches your interests, chances are you will notice the diversity and number of options available. By the time this issue is in your hands, SPE will already have featured at least 140 events during 2014. By the end

of 2014, SPE will have held more than 160 events all over the globe. This is remarkable and makes it hard to imagine that throughout 2005, when the first three issues of TWA were written, printed, and mailed, SPE held less than 40 events.

Membership has also shot up over this 10-year period. In 2005, SPE could count more than 69,000 professional and student members. Over the last decade, the number of professional and student SPE members has jumped to more than 124,000 as of yearend 2013.

As a consequence of the membership boom, new SPE sections were created in different parts of the globe. When the first issue of TWA was mailed to recipients, there were 160 sections in 15 regions to which members could affiliate worldwide. As of yearend 2013, 196 sections in 16 regions helped SPE fulfill its mission, fostering technical dissemination, promoting networking, and supporting the activities of young professionals.

The next generations of petroleum industry professionals also became more represented in SPE. Ten years ago, there were 150 student chapters at universities around the world. Today, this number has more than doubled, to 314. That level of growth helps ensure the industry will continue to bring in new insight and energy during the next 10 years and beyond.

In the last decade, the petroleum industry further steered its course toward challenging opportunities both technically and economically. Research and technology advanced at full speed. In that period, the number of SPE technical publications also grew significantly. Searching the OnePetro site, one can find that the number of SPE papers more than doubled between 2005 and 2013. OnePetro has become so important today that the library has been expanded to

include publications from other oil and gas professional societies and publishers.

New regular publications also came into being in response to our members’ and the industry’s needs. Between 2004 and 2014, the number of peer-reviewed journals increased from five to six, and during the same timeframe the number of SPE print or online technical magazines increased from one [the Journal of Petroleum Technology (print and online)] to four, with the addition of Oil & Gas Facilities (print and online) in 2012, The Way Ahead (print and online) in 2005, and HSE Now (online only) in 2012.

The society frequently launches new online resources as well. Good examples are Petrowiki—the online petroleum encyclopedia, with content from SPE’s authoritative Petroleum Engineering Handbook—and SPE Connect—a professional network available to all SPE members, including students. These resources are intended to make essential technical information available to all and to promote networking and technically based discussions between members.

Other SPE programs, such as energy4me and eMentoring, provide educational resources and help prepare new generations for the industry. Rest assured that new events and programs will be organized with purposes determined by future industry needs.

TWA’s achievements during its first decade of existence have occurred against the backdrop of SPE’s intense growth. Looking back, it’s impossible not to feel confident about the years to come. The society continually plays a significant role in driving the industry toward technical excellence and high operational standards—and will continue to do so for the next 10 years. And you are part of that growth toward excellence, so please join us and we’ll work together. TWA

How SPE Has Grown and Evolved During The Way Ahead’s First DecadePaulo Pires, Petrobras

20

Discover a Career

One thing social media professionals have in common is that our jobs didn’t exist a decade ago. Now, social media professionals play a vital stakeholder-engagement role in marketing and communications across almost all industries, including oil and gas.

However, oil and gas social media professionals face challenges not all industries share.

Like other industries, we help build brand recognition and favorability in the online space. But we also have the difficult task of educating people about oil and gas and also of explaining how our company—and the industry—creates human prosperity and brings value to the communities where we operate around the Earth. We help our company connect with hard-to-reach influencers, and engage opinion leaders, policymakers, community stakeholders, and nongovernmental organizations (NGOs) on complex issues so our company—and the industry—can gain acceptance in order to operate within difficult political, sociopolitical, and/or geopolitical climates.

What Is Social Media?Social media is the interaction between people (social) who use various electronic communication technologies (media—the plural of “medium”), any one of which enables the interaction to take place as fast as an instant, like a face-to-face conversation, across vast distances on Earth. Communication via social media sometimes reaches nobody, or can reach one, two, or potentially even a billion or more people. Using social media, people can communicate opinions, information, photos, video, Internet links, game moves, and experiences through email, instant messages, and texts; blogs and microblogs; forums, chat rooms, and networking sites; multi-player games; wikis; social bookmarking; and many other electronically enabled means.

New and ever-faster electronic communication technologies (e.g., cell phones, cameras, audio, video, tablets, laptops, servers, cables, satellites) and platforms (e.g., apps, operating systems, software programs, the Internet and its myriad types of sites) now allow instantaneous worldwide personal connection between human beings—something never experienced on such a huge scale by humanity. Social media

allows human interaction to happen at lightning speed and continuous frequency through virtually simultaneous reach over vast distances among enormous and geographically scattered audiences. Social media is changing how we relate to other human beings—our friends, families, communities—and even how we experience ourselves. And it’s changing the relationships companies and industries have with their customers, stakeholders, employees, and others all over the world.

Why Social Media MattersThe global Internet population is made up of approximately 2.4 billion people, estimates data consulting firm Domo. According to Business Insider Intelligence, in the US alone, people spend more time on social media than on any other major Internet activity.

Congressional Management Foundation and Brunswick Group surveys indicate that the news media, investors, government officials and staffers, NGOs, academics, and opinion leaders are increasingly using social media platforms (e.g., blogs, Twitter, LinkedIn, Google+, Wikipedia) to conduct research, share information, and connect with their peers and constituents. These audiences are key stakeholders in the oil and gas industry. Social media thus allows oil and gas companies to engage with these influencers across multiple platforms whose value the influencers already understand.

For example, in ranking their top information sources, investors surveyed by four organizations (Brunswick Insight, Cogent Research, FTI Consulting, and Unversitat Leipzig) said companies that directly communicate information matter more than any other source. Of investors surveyed by Brunswick Insight, 52% read blogs, 30% use Twitter, and

Discover a Career in Social Media Olivia Harting and Erika Conner, Chevron

Olivia Harting is the social media lead for Chevron corporate public affairs. She helps guide the strategic use of social media in corporate communications, online stakeholder engagement, advocacy campaigns, issues management, and crisis communications, and helps build organizational capability in digital and social media among the company’s public affairs communicators. She currently serves as the Chevron chairperson to the Social Media

Business Council (socialmedia.org). Harting has 18 years’ experience in interactive media and digital marketing. She began her career in social media as a community manager overseeing Chevron’s proprietary online energy forum in 2006. Harting earned a BA degree (magna cum laude) in philosophy from Wellesley College, Wellesley, Massachusetts. She has taken advanced-degree classes in computer graphics and interactive media at Pratt Institute, Brooklyn, New York.

21Vol. 10 // No. 3 // 2014

73% say they use LinkedIn to research financial decisions.

Knowing this, oil and gas social media professionals can amplify and reinforce the information they normally provide investors through formal engagement channels by also using online channels. Social media gives its practitioners the ability to target their communications efforts online and, in today’s electronic world, be at the right place at the right time.

Not everyone understands the complexities of the oil and gas industry. Social media provides many avenues for bringing credible information to the online conversation. Through social media, we can help people understand not only the value the industry brings to millions of lives across the globe, but also all aspects of the business—from base exploration and production to our community relationships to how gasoline gets to their car’s tank. We can also leverage our social media platforms to confront misconceptions, correct inaccurate information, and participate in public discussion and debate about energy issues.

How Do We Use Social Media?According to online statistics gathered by Domo, the following happens every minute of every day: 277,000 tweets are shared, 72 hours of new video are uploaded to YouTube, Google receives over 4 million search queries, and almost 2.5 million pieces of content are shared on Facebook—every minute of every day.

This massive amount of social media data provides companies with two very valuable business opportunities. The first is the ability to “listen” to the online conversation in order gather digital intelligence relevant to the business. The other is to “engage” key stakeholders and influencers in a meaningful brand experience and dialogue.

ListeningA key component of the social media professional’s role is to monitor what is occurring in the online space; analyze what we encounter to determine what types of data or information relate most closely to our company’s concerns; and glean insights, examples, and recommendations that can affect business outcomes.

Individuals and organizations throughout the world discuss energy issues online. By “listening” to social media conversations, we are able to gather information that allows us to identify key influencers, trends, emerging issues, and potential threats to our operations. Listening enables us to make better-informed business decisions and develop more proactive overall communication strategies. Moreover, online listening allows us to actually track behavior and stakeholder actions as opposed to formally using a poll or survey to measure public opinion or intent. As our ability to track actual behaviors grows, so too will our ability to better predict the actions of our key stakeholders.

We rely on a variety of tools to listen, monitor, and manage social media. These tools help organize, categorize, and identify which relevant information is of the greatest value to our business. Typically these are cloud-based tools that draw on the millions of online conversations across countless platforms to provide us with everything from conversation analysis, trends, emerging issues, and cyber-threat warnings; to stakeholder mapping and identification; to brand impersonation and trademark violations; to content analysis, content scheduling, and publishing.

EngagementEmbracing social media means more than just broadcasting corporate messages: It strengthens a company’s ability to build trust and favorability with its audiences. For example, according to the 2013 Trust Barometer, based on a global study by public relations firm Edelman, 82% of millennials said they would have more faith in a company or institution if they were involved in social media.

In our business, we engage with the goal of building relationships and communities that support our company and the industry. By listening across all our social media platforms to our audiences and understanding who they are, we’re able to create relevant, timely, and informative content that delivers key messages and that amplifies business information. We aim to use photos, infographics, articles, and facts to drive positive awareness and advance our company’s reputation.

During times of crisis, listening and engaging via social media is critical to understand what questions individuals have regarding the situation and also to convey status updates. Social media is also important when we’re sponsoring an event, publishing a press release, or making an announcement. The ability to engage with millions of people at a time on a personal level is powerful and unlike anything we’ve been able to do in years past.

Erika Conner is the social media community manager for Chevron corporate public affairs. Conner is responsible for social media community management across Chevron’s corporate social media platforms. She oversees community moderation and proactive stakeholder engagement. Conner’s responsibilities also include analyzing community insights, spotting trends, identifying and reporting on ongoing issues, and monitoring social and digital information related to crisis

situations. She has more than 12 years of combined experience in the areas of journalism, digital content creation, video production, and website and social media management. She is a two-time Emmy Award winner and a recipient of an Edward R. Murrow Award. Conner earned a BA degree in English at the University of California, Santa Barbara, and an MS degree in broadcast journalism at Boston University.

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Discover a Career

A Career in Social Media Anyone considering a career in social media should keep in mind that it’s a very fast-moving, ever-emerging, and evolving space. It requires a passion for technology and data, a passion for storytelling, and a passion for connecting people—and connecting with people. It requires constant learning and the ability to adapt to change.

The job literally requires 24/7 management and attention because it is always daytime somewhere in the world and, therefore, social media can never sleep.

Because the work requires aptitude in a variety of disciplines, social media professionals come from a wide variety of communications backgrounds—marketing, media relations, public affairs, journalism, and interactive program management, to name a few. In turn, a career in the communications or marketing fields today requires an understanding of social media. Social media

professionals have become critical business partners.

A career in social media is both challenging and rewarding. The challenges stem from the fact that this field is always changing. Time is spent daily to understand new functionality and emerging platforms for stakeholder engagement.

Understanding and implementing big data analytics and how we can best leverage “digital intelligence” to improve business outcomes are areas of great opportunity, but they are multifaceted and can be challenging to navigate.

It’s often challenging, too, to produce and curate the volume of rich and compelling content needed to feed all channels on a daily basis. Content creation and coordination can be a significant aspect of the social media community manager’s job.

But the challenges of these roles also feed into the rewards that make a career in social media exciting and make each day unique. To analyze data in a way that provides the greatest business

value, or to tell a rich, compelling story online, we first have to understand how the information we glean can translate into business opportunities. While we are digital and social media specialists, we’re not subject-matter experts about the business and all its many facets. We therefore collaborate closely with team members throughout the company on a daily basis. Being at the center of external stakeholder communication allows us to work with subject-matter experts who provide insight into our company’s different lines of business and the value these various businesses bring to the company as well as the challenges they face.

Social media is constantly changing and we cannot predict the ways companies, including those in the oil and gas industry, will use digital tools and technology in the future. What we do know for now is that social media is vitally affecting the way we communicate and listen to the world community in which we live. TWA

Too busy to be away from the offi ce? Take yourself to greater depths right from your desktop with SPE Web Events. Join our industry experts as they explore solutions to real problems and discuss trending topics.

View a list of available web events at www.spe.org/events/webevents.

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23Vol. 10 // No. 3 // 2014

Technical Leaders

Question: What do you think was the major industry focus area over the last decade in terms of oil and gas resources: conventional, deepwater, heavy oil, shale? Could it shift in the next decade?

LR: I think the answer depends on the energy needs of the nations involved and the resources available to them. For instance, Brazil has developed impressive technology and capabilities in the last decade for deepwater resources extraction. The US has been successful with unconventionals (shales, tight hydrocarbons, etc.). I think the industry will continue to develop new technology and the next shift in focus will be towards developing resources that will become available due to implementing that new technology.

ES: “Shale” resources’ huge impact was the big surprise of the last decade. Shale resources have had a major economic and geopolitical impact and will continue to do so in the coming decade.

Question: What novel technology emerged in your area of expertise in the last decade? What was its impact?

LR: Hydraulic fracturing has been evolving for the last several decades, not

just the last one. However, it has been in the last decade that all the variables required finally fell into place. A combination of new drilling technologies made horizontal wells economically viable—new developments in rock mechanics that improved the understanding of how fractures develop in the rock, new ideas in fluid mechanics that allowed us to improve fracturing fluids. All those technologies allowed for the shale “revolution” to occur and increase production from unconventional resources fourfold. In 2008, according to the EIA [US Energy Information Administration], unconventional production accounted for 12% of total US crude oil production. Today it accounts for more than 35%.

ES: The shale revolution has revealed how much we have yet to learn. Our understanding of hydrocarbon migration is very incomplete. To more efficiently find and produce hydrocarbons, we need to better understand natural hydrocarbon migration. Hydraulic fracturing is a “big hammer,” but we need to better understand the role of natural fractures on all scales over time to become more efficient. Remote sensing technologies may be an attractive way to identify areas of higher natural fracture density that are sweet spots in shale resources.

Question: How have job hiring trends for the industry changed over the last 10 years? How do you think these trends will change over the next decade and what advice can you give to young professionals planning to enter the industry in the coming years?

LR: During the last decade the industry faced a difficult situation, as its experts and technological leaders aged and began to retire. Young professionals’ entry into the energy sector has not been enough to replenish the retired force. Hiring trends today reflect that. A lot of engineers and experts all over the world are moving to the US to fill the gap.

My advice to new engineers is you need to find a focus area and select your future direction based on that. For instance, if you want to become a reservoir engineer leader, you may seek a position with an operator that has a lot of experience and/or leading-edge technology in old and new fields. If you want to become a drilling engineer leader, your first move may probably be with a service company that specializes in that area. Don’t let a company manage your career; rather, move to the company that you think will focus your skills better and allow yourself to be the manager of your career. In the end it all depends on what you want to do—as clichéd as it may sound.

ES: When the industry started hiring again about a decade ago, enrolments in university petroleum engineering programs were low, because of the low levels of hiring during the previous 2 decades. The pattern was very similar to what occurred in the 1970s when the petroleum industry re-staffed after a couple of decades of low petroleum prices and low hiring. Companies don’t

The Past and Future Decade: Industry Leaders Speak Their MindsLuis Rodriquez, Rex Energy and Eve Sprunt, Consultant

Luis Rodriguez is vice president of reservoir engineering at Rex Energy Corporation. He has over 15 years’ experience in the oil and gas industry, working in different positions ranging from production and operations to reservoir engineering and management. Rodriguez has worked in assets such as the San Jorge basin in the South Patagonian region of Argentina; the Cano Limon field in Colombia; the Hugoton gas field in Kansas, USA; the San Joaquin basin in California, USA; and the

Marcellus shale, USA. Luis holds a BS in petroleum engineering from Universidad Industrial de Santander in Colombia, an MS in petroleum engineering from the University of Oklahoma, and an MBA from Rice University.

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Technical Leaders

hire because their workforce is aging, they hire because business is booming and operations are expanding.

Every industry has its booms and busts, so we all need to have strategies to survive both periods of frantic activity and times of layoffs. Being active in SPE is a good strategy and was a critical part of my toolbox. Building connections and a network beyond your own employer creates a safety net of people who know your capabilities and work ethics. In hard times, most good jobs are obtained through personal networks. Over a 30- or 40-year career, you can expect that you will encounter at least one major downturn when having a strong personal network helps you stay employed.

Question: What do you think about the quality of industry job candidates now versus the past decade?

LR: A lot of different opinions exist. The consensus is that the new candidates somehow lack the knowledge and preparation that previous generations had. I disagree. The new generations are better at using new tools and technology that just a few years ago were not available. This multiplies their performance in ways that are quite surprising. I only expect new candidates will become increasingly better. One issue remains constant though: Some skills are acquired only through experience.

ES: Higher enrolments of students in disciplines of interest to the petroleum industry mean that employers can be more selective. Also, with more students studying petroleum engineering, there are more high-quality candidates.

Question: With the increasingly higher (and arguably unsustainable) starting salaries for new graduate hires, how do you see recruiting strategies changing so companies can obtain the best talent?

LR: This is simply an asset allocation issue. If the energy industry provides better returns than, let’s say, the telecommunications industry, then it will offer better salaries to capture the best

talent. This is happening now. However, the situation can change. If for some reason commodity prices plummet, it is very likely that recruiting strategies and new-hire salaries will adjust accordingly. Using the same logic, we can easily understand how Wall Street now offers higher bonuses than the oil industry—and how that situation was reversed during the 2008 economic crisis. Today our industry offers higher salaries simply because it can, and we want the candidates.

ES: Employers will try to leverage other factors to make themselves attractive. Training programs and certain early-career opportunities can be very enticing.

Question: What are the major workforce changes you have seen and what are companies doing to accommodate the changing workforce?

LR: By far, retirement. We are losing our best engineers and knowledge to the aging cycle and we have not been able to adapt quickly enough. According to the latest SPE survey, the average age of a US petroleum engineer is 46. Companies are bringing new engineers from overseas, increasing their investment in universities and colleges in order to capture the best candidates, creating in-house programs to train engineers in petroleum engineering areas, etc. Only time will tell if current efforts will help overcome the trend.

ES: The younger workforce is increasingly composed of people who are part of a dual-career couple. Previously, much of the workforce had a spouse who handled household logistics. Relocation of people in dual-career couples is more complicated and

requires more support, because both partners’ careers must be considered and there is not a supporting spouse to manage the logistics. Dual-career couples also need more flexibility on a daily basis because no one is at home to manage all the unexpected events.

Question: What are the major disasters/accidents that have occurred in the industry in the past decade and what have we learned from them?

LR: I think that the Macondo disaster may be the consensus as the most significant. The Deepwater Horizon oil spill simply shook the industry to its core. In just a moment, the industry was reminded not only that they are responsible for human lives and of their environmental and safety responsibility, but that their companies—no matter how big—are not too big to fail. We are neither banks nor car manufacturers. A single event could destroy all the value added for decades, in an instant. The government will not—or cannot—come to our rescue; they simply lack the technical expertise to address a situation like this.

Perhaps one of the most important lessons learned is in the areas of deep-spill decontamination and the analysis of oil spills’ impact on the environment. For example, new and quicker methods to test for contamination in marine animals were developed and validated by the US Food and Drug Administration. The solution to the Macondo event was truly an example of cooperation between industry, government, and scientists.

ES: The Macondo blowout has had a tremendous impact in the industry. It has revealed many of the gaps in our

Eve Sprunt, a consultant, has 35 years’ experience working in various technical and leadership roles for major oil companies, including Chevron and Mobil. She was president of SPE in 2006 and was made an Honorary Member of SPE in 2010. In 2013, Sprunt was honored by the Society of Women Engineers with the Achievement Award, their highest award. She earned BS and MS degrees in Earth and planetary sciences at Massachusetts Institute of Technology and a PhD degree in

geophysics at Stanford University.

25Vol. 10 // No. 3 // 2014

safety culture. Employees must be better trained and feel empowered to insist that work be stopped when unsafe situations arise. Safety incidents are more common with a less-experienced workforce.

Question: How has environmental regulation changed in the past decade? Can we expect tighter regulation in the future?

LR: Perhaps one of the most significant areas of change is emissions control—particularly CO2 emissions. Earlier this year [2014], the US Environmental Protection Agency proposed a plan that aims to slash carbon dioxide emissions by 30% from power plants by 2030. Several US states, including California, are thinking of or already implementing cap-and-trade schemes to control CO2 emissions. Carbon taxes are being discussed and proposed in the legislature. I think the tendency is clear and we can expect tighter regulation in the future.

ES: Environmental regulation and monitoring requirements have increased and will continue to increase. We must acknowledge that everything has an impact. Waste disposal can have previously unrecognized consequences, so whenever possible we should recycle and reuse supplies to minimize waste.

Question: Do you foresee more company spinoffs or mergers in the future?

LR: Yes. It all depends on the market situation. Generally speaking, companies tend to merge when commodity prices are low—this is what happened in 1998–2000. Spinoffs, on the other hand, tend to happen when assets inside a corporation become too diverse or their risk profiles become too heterogeneous. There is, however, no definitive rule for mergers and spinoffs. In any case, I’m sure we will see mergers and spinoffs in the future.

ES: Yes. Companies will continue to evolve to better compete in the world market. No matter how large your employer or how secure your position

appears, you always need to be prepared to look for another job. Network and keep your résumé up-to-date!

Question: What is the biggest challenge you see the industry as a whole facing in the future: environmental regulation, public perception, personnel shortage?

LR: My answer: all of the above. Public perception creates a cycle that affects the industry in all areas. When people see the industry as “big oil” or the “big bad wolf,” the tendency is to increase regulation that affects us—environmental, taxes, safety, areas open to drilling, etc.—because the tendency is to think companies within the industry will take advantage of people. This also causes fewer enrolments in engineering schools or departments related to the energy sector—nobody wants to work for a “polluting, despicable industry”—creating personnel shortages and technological challenges due to reduction in R&D.

I think it is important for us to clarify this situation. For instance, the main factor that allowed the US to reduce its CO2 emissions in the last decade was the shale gas revolution. According to the [European Commission Joint Research Centre] Emissions Database for Global Atmospheric Research, the US emitted about 6 billion metric tons of CO2 in 2004 against roughly 5 billion in 2012. About 17% reduction in 8 years. Compare that to the EPA-proposed 30% reduction by 2030— or to the emissions coming from China: in excess of 10 billion metric tons of CO2.

Some people thought the US CO2 emissions reduction was due to the 2008 recession. But they continue to decline today, way after the recession is over. I believe the increased use of cleaner natural gas is already showing some benefits. Even years before the proposed EPA CO2 emissions reduction plan, companies generating electricity began moving from coal-powered plants to using combined-cycle plants powered by natural gas. Public opinion seems to ignore all this and attribute good results to government policies.

ES: Societal “license to operate” is the biggest challenge. Every form of energy has an impact, but environmental activists have particularly targeted fossil fuels. We need to better communicate how the petroleum industry enables modern life, while simultaneously minimizing our environmental impact and improving our safety record.

Question: What other major changes in the oil and gas industry do you foresee?

LR: The biggest change the industry faces is the move towards cleaner fuels. This has happened several times in history. For eons, we used long-chained hydrocarbons, such as wood, as fuel. A few centuries ago we started burning shorter hydrocarbons, although still long-chained: coal. Recently, with internal combustion engines, we switched to even shorter hydrocarbons: crude oil. We are in the middle of the shale gas “revolution,” a transition towards really short-chained hydrocarbons: natural gas, propane, and butane.

Several leaders within the oil and gas industry are advocates of moving the US from an oil-dependent economy to a gas-dependent economy. T. Boone Pickens and Harold Hamm come to mind. This transition faces several challenges—for instance, transportation. Gas is compressible and not as easy to transport as oil. The US currently lacks the infrastructure to massively distribute natural gas—for example, to gas stations around the country. Countries like Brazil run not just buses, but regular family vehicles, on natural gas. You can fill up your natural gas tank easily anyplace inside Brazil, but not in the US. The good news is the industry is already moving in that direction and, like in the past, it will rise to the challenge and will be an integral part of solving our energy needs.

ES: Collection and interpretation of “big data” will become increasingly important. We currently place a great deal of reliance on seismic. Integration of other types of data collected by satellites, airplanes, and drones may open the door to lower-cost evaluation. TWA

26

Soft Skills

The oil and gas exploration and production (E&P) sector has made a U-turn over the past 10 years—changing from an industry dominated by those over 40 into a more youthful one. For the vertically integrated majors, this generational shift in its human resources (HR) has taken place while the companies were managing increasingly technically challenging upstream projects and being answerable to stronger safety and environmental regulation. Few industries have experienced such a profound upheaval.

The generational shift in industry personnel is the so-called “big crew change” that is occurring now, as the peer group of engineers hired before the recruitment cuts in the mid-1980s began to retire around 2005. Fig. 1 illustrates the massive outflow of senior petrotechnical professionals (PTPs) from the industry and a corresponding increase in younger, inexperienced graduate recruits.

Since around 2005, the dearth of experience among their human resources has forced E&P companies to rethink the way they manage their talent, putting HR issues at the top of

their agenda. Over the past 10 years, companies have focused their efforts on planning manpower needs, reinforcing recruitment capabilities, and fast-tracking skills development, while designing more attractive careers in an effort to better retain their best employees.

Today, the following appear to be the main HR concerns of most oil and gas companies:

• Leadership—Most oil and gas companies remain reluctant to entrust people younger than those hired in the past with similar sets of responsibilities.

• Diversity and Inclusion—There is lower-than-expected growth in areas such as gender and local content.

• Knowledge-Sharing/-Transfer—Not only from senior to junior staff but also between developed and developing countries, this is proving more difficult than expected.

Developing a New Approach to LeadershipAlthough engineering programs at North American universities are running at capacity, many of the most talented engineers are reluctant to enter the oil and gas industry. This is partly due to the less appealing public image of the E&P industry, when compared to others. Additional reasons include an increasingly widening gap between professional progression within E&P and that of other industries such as high-tech or finance, as well as the harsher lifestyle of some oil and gas careers. For example, a recent oil and gas graduate may be required to live and work in unfavorable remote areas,

Is the Industry Ready for a Change in Leadership?Partha Ghosh and Olivier Soupa, Schlumberger Business Consulting

Partha Ghosh is a senior advisor to Schlumberger Business Consulting. Ghosh has more than 35 years of management consulting experience in technology-based and energy industries across the Americas, Africa, Asia, Australia, Europe, and the Middle East. He currently focuses on strate-gic, innovation, and leadership issues in the energy industry. From 1977 to 1990, Ghosh was a partner at McKinsey & Company, after which he ran his own boutique advisory firm—Partha S. Ghosh & Associates—focusing on policy and

strategic issues. He holds a bachelor’s degree in chemical engineering from the Indian Institute of Technology, and two advanced engineering and management degrees from the Massachusetts Institute of Technology.

Fig. 1—Demographic swing (percentage of petrotechnical professionals per age group) between 2005 and 2013.

25%

20%

15%

10%

5%

0%20y-24y 25y-29y 30y-34y 35y-39y 40y-44y 45y-49y 50y-54y 55y-59y 60y-64y 65y+

2005 2013

27Vol. 10 // No. 3 // 2014

whereas a graduate entering a tech company may be working at a plush ultramodern campus.

This trend, along with the unsustainable “succession of successions” that accompanies the replacement of top executives—like a series of musical chairs—are pushing the industry to rethink its leadership approach. (Fig. 2 illustrates the industry’s historical and forecast requirements for leadership.) The need for leaders in the next couple of years is greater than it has ever been in this century.

The industry must revise its approach to career development and take more risks with younger people. A few companies have begun succession planning and this wave of change is needed in the middle- and top-management layers: among heads of assets, heads of technical and support functions, and their subordinates. Rejuvenating the population of leaders will create a unique opportunity to increase the attractiveness of the sector.

Critical to the successful identification and development of future leaders is an intimate understanding of the existing talent pool. The most successful companies have developed approaches under which a specific function is managed closely by a dedicated organization. Individual talents are identified and followed, ensuring their suitability to leadership is strongly backed up by a “skillpool” organization.

Diversity and Inclusion Lagging Behind Gender diversity has improved in recent years, but the E&P industry is far from being able to proclaim success in this area, with the number of women seldom exceeding 20% of overall engineering staff. Counterintuitively, it is in the regions and company types where women are usually excluded from positions of responsibility that the most progress is being reported, such as in the Middle East and at national oil companies, whilst international oil companies remain surprisingly conservative in recruiting women (Fig. 3).

A hot topic regarding diversity and inclusion in the industry today is national content or “local content” as it is popularly referred to. After decades of operations in remote locations, the number of locally recruited employees remains far below the desired level. To address this imbalance some resource-rich countries have implemented quotas forcing companies to recruit locally. But despite tangible results, this policy has proved partially counterproductive for several reasons. First, quantitative targets encourage companies to recruit quickly for lower-skilled support func-tions. Second, quotas usually apply to the production phase. In many cases the largest potential for local job creation is during construction when the employers are not E&P operators but engineering, construction, and supply companies.

Third, imposing quotas without investment in national education does not support robust devel-opment of a skilled generation. Too often quotas are used to shift the onus for education from governments to operators. Also, quotas can result in unfair and suboptimal utilization of human resources as not all companies pursue people development policies or contribute to talent pool growth by training young graduates, but rather exclusively poach mid-career talent.

Collaborative Approaches to Knowledge Transfer Are LackingThe struggle for talent in resource-rich developing countries—where local education systems produce neither the quantity nor quality of required human resources—has been intense during the past decade. Underinvestment in

Olivier Soupa is a principal at Schlumberger Business Consulting. With more than 10 years of management consulting experience, Soupa specializes in organization and human resources, with an emphasis on post-merger integration, restructuring organizations, and designing human resources strategies. He assisted in creating the Schlumberger Business Consulting Energy Institute, a nonprofit foundation whose purpose is to work on scientific and technology research on the world’s future energy

challenges. As the managing director of this institute, Soupa focused on energy supply challenges, covering oil and gas as well as low-carbon energies.

Fig. 2—Comparison between historic and forecast need for leaders in the oil and gas E&P sector (annual average number).

2005–2009 2005–2009 2005–2009

+20/45%

[500–750]

900

1,500

+60%

28

Soft Skills

education has many causes, but the main one is lack of appetite among decision makers and operators to invest in long-term benefits. There is also a staggering lack of collaboration among international operators and poor coordination of educational initiatives by local public administrations.

All stakeholders acknowledge that education must come first, but they continue to fight over who will pay: Host governments refuse to integrate education investments by E&P operators into cost recovery; consequently, the companies finance only a few scholarships. The operators themselves do not work together to implement long-term strategies that would bring benefits for all. Several African countries could have hosted international centers of excellence for oil and gas, led and coordinated by a community of IOCs and national bodies. But instead, the focus remains on secondary details,

such as which education model should prevail—Anglo-Saxon or continental European.

Moreover, investments in education have not targeted disciplines with the largest potential for job creation (Fig. 4). A large E&P project requires top petroleum and geoscience engineers, but far more mechanical or electrical engineers are required. And many more technicians and craftsmen are needed than pure engineers.

Investments in education deriving from oil and gas projects usually address only petroleum disciplines and seldom include technicians. Broadening the scope of education investment to meet the most acute needs could benefit the wealth and long-term development of emerging economies.

ConclusionImplementing one or more of several strategic initiatives could shape the

next decade of the oil and gas industry in a positive way:

• Companies’ boards of directors and CEOs should increasingly focus on discussing ways employees can develop organizational and leadership skill sets.

• The evolution of the HR function from responsive to proactive must continue. CEOs and boards should work as closely with HR as they do with the company’s technical functions or operations.

• Rejuvenation of leadership-development programs: Companies should cultivate a leadership culture to ensure all employees feel genuinely responsible for the domain of their influence, from the immediate areas of interest to societal obligations as well; evolve a high level of com-mitment to performance; and, at the same time, go beyond incremental improvements and search for and implement changes that have the potential to revolutionize the industry.

• Commitment to cultivate a culture of innovation: E&P companies are exploring ways to commit increasing resources to research and development, which, without a culture that breeds imagination, may not unleash their full potential. Nurturing the culture of innovation that can deliver game-changing ideas will require uncompromising dedication from leadership.

• New paradigm of engagement with education infrastructure: companies must learn to work with governments and educational institutions to develop the quality and quantity of skills needed by the oil and gas sector to ensure supply of these critical resources.

If E&P companies commit to some or all of these strategic initiatives, a differently modeled industry could emerge that might enjoy significantly more intellectual ferment and, in turn, could be presented with opportunities that could rejuvenate the industry. TWA

Fig. 3—Petrotechnical professionals in the E&P industry who are women (percentage of respondents).

Fig. 4—Ratio between direct, indirect, and induced jobs generated in the oil and gas industry.

Major

16%

24%

15%

22%

14%

18%

20052012

NOC Independent

Direct

x2-x4

Min/Max x6-x8

~x10

Indirect Induced Total new jobs

29Vol. 10 // No. 3 // 2014

Tech 101

Artificial lift is a technique used to provide energy to the formation fluids in a production well when the pressure of the formation is not high enough for hydrocarbons to flow up the tubing string at an economic rate. Several types of artificial lift can be used to increase the production rate and maximize hydrocarbon recovery. The major artificial lift technologies are beam pumping/sucker rod pumps (rod lift), progressive cavity pumps, hydraulic submersible pumps, electric submersible pumps, and gas lift.

Hydraulic submersible pumps (HSPs) (Fig.1) are hydraulic turbine-driven downhole pumps that were developed as an alternative to the more commonly used electric motor-driven submersible (centrifugal or progressive cavity) pumps (ESPs). ESPs are used extensively in oil lift applications—particularly offshore. These pumps can experience failures attributable to the following:

• Exceeding the limits they were designed to operate within

• Electrical insulation failure in the wet well environment

• Sub-optimal field practices • Overheating of the downhole

electric motor Particularly in the case of

high operating-expense (OPEX)

environments such as subsea wells, faced with increasing demand for ever-depleting resources, and the challenges associated with oil and gas production in increasingly difficult locations, there is a strong drive to maximize hydrocarbon recovery and lower operating costs through improvements in well pump technology. HSP technology has demonstrated a step change in pump mean time to failure (MTTF), validated through more than 13 years of subsea field operating experience. This presents a viable alternative for operators can consider to help improve their OPEX

profiles through the use of a high-integrity engineered pumping solution.

How Does an HSP Work? A turbine-driven HSP is powered by pressurised power fluid supplied from pumps on the surface. The high-pressure power fluid flows down a dedicated supply flowline and enters the tree at a controlled pressure and flow rate. In the most common “open loop” configuration, the power fluid enters the HSP through the well annulus and de-pressurises through the multistage, axial flow turbine, providing the drive to the pump end to boost the pressure of the formation fluids, (Fig. 2). The produced fluid at pump discharge subsequently commingles with the exhausted turbine power fluid and flows up through the production tubing, flowline, and riser to the surface facilities. At this point, the power fluid is then separated, filtered, and recirculated back into the HSP power fluid supply and water disposal system. Another option is to supply power fluid in a “closed loop,” where the power fluid does not commingle with the formation fluids. Although this is a more complex

Artificial Lift: Focus on Hydraulic Submersible Pumps Abhishek Bhatia and Scott A.L. McAllister, ClydeUnion Pumps

Abhishek Bhatia, a mechanical engineer at SPX, is primarily responsible for assessing hydraulic submersible pumps’ (HSPs’) appropriateness in different applications by engaging early with endusers or field development consultants. His current role also includes carrying out detailed hydraulic studies, well modeling, selecting optimum HSP configuration during pre-FEED and FEED stages, and mechanical design. In his previous role, he was involved with the design and

packaging of surface pumps, typically used for water injection, crude export, and seawater-lift applications. He holds a BEng (Hons.) degree in aero-mechanical engineering from the University of Strathclyde and an MSc degree in design of rotating machines from the Cranfield University.

Fig. 1—Hydraulic submersible pump. Courtesy of ClydeUnion Pumps.

30

Tech 101

Fig. 2—Hydraulic submersible pump principle of operation. Courtesy of ClydeUnion Pumps.

completion design, with two concentric annuli required for the independent supply and return of power fluid, it minimizes the load on the primary oil/ water separation facilities.

HSP DifferentiatorsAn HSP differs from other artificial lift technologies due to a number of factors:

Wide Operating Envelope—The power fluid supply not only drives the turbine but provides a hydrostatic pressure feed to the radial and axial bearing system, meaning that the inherently variable speed rotor is well supported under all operating conditions including gassy, sandy, or viscous fluids.

High Speed and Compact Assembly—The turbine design and bearing support systems enable operation at super synchronous speeds (typically 5,000 to 10,000 rpm). These operating speeds are significantly greater than those of a comparable ESP, thus providing a greatly reduced pump stage bundle length, resulting in a compact, easily deployed assembly.

Elimination of Traditional Failure Modes—Rather than relying on full isolation of the drive section from the well fluids through the use of mechanical seals and protectors, the power fluid used to drive the turbine provides a positive, outward clean flush to the pump end bearing system and is a key life-enhancing feature. In addition, an HSP is assembled on a single, high-precision shaft, eliminating the need for motor-pump coupling at the well site.

Advanced Materials of Construction—Components consisting of high-end materials maximize an HSP’s operational life. Such materials include super duplex stainless steels, ceramics, and nickel/cobalt alloys that, over extended time periods, provide excellent resistance to erosive and abrasive wear, corrosion, and sour service.

An HSP provides benefits for the production of formation fluids, particularly in challenging applications such as:

Heavy Oil Applications—Viscosity management is a major flow assurance challenge associated with heavy oils,

more so if there is an emulsion-forming tendency that could significantly increase fluid gross viscosity. With an “open loop” power fluid supply configuration, formation fluids with high viscosity are commingled with the power fluid to achieve a water-continuous dispersion downstream of the HSP, which subsequently reduces associated friction losses.

Multiphase Pumping—Producing oil wells often encounter multiphase mixtures, either by design or unintentionally, as free gas is often co-produced. The presence of free gas at pump suction can adversely affect the hydraulic performance of pumps, which are generally designed to handle incompressible fluids.

Methods of handling gassy fluid streams have traditionally included

pump suction gas-liquid separators and variable-speed controllers to minimize gas ingestion and avoid gas locking and overheating of the motor.

Recent developments have seen the incorporation of special helico-axial or mixed-flow impellers to increase the maximum gas void fraction before gas locking occurs. However, despite these advances, today’s extensive use of horizontal wells that can generate sluggy multiphase flow regimes continues to threaten the availability and reliability of downhole motor-driven machines.

In contrast, in addition to having helico-axial design multiphase impellers, an HSP’s constant power turbine drive provides an inherently variable speed operating capability when it encounters variable-density fluids within the pump

Power fluid pump

Power fluid supply

Cyclone

Separator system

Produced fluid

Commingled return fluid Control choke valve

Turbine

Pump

Turbine exhaust Pump discharge

Reservoir flow

31Vol. 10 // No. 3 // 2014

end. For a given power input, the rotor will speed up and gas compression efficiency will improve in response to increased gas void fraction.

In addition, even when faced with a 100% gas slug event, the interstage hydrostatic bearings and thrust-balancing arrangement are continuously fed with power fluid, which increases the liquids-to-gas ratio through the pump whilst still supporting the rotor in the radial and axial direction.

Wax, Scale, and Corrosion Management—Wellbore chemical treatments are often required during production to overcome problems encountered with waxing, scaling, or corrosion. In these scenarios, chemicals must to be injected into the production fluid path via dedicated flowlines. With HSP, such inhibitors can be added through power fluid supply at the surface facility.

Similarly, heated power fluid can be utilized to artificially increase the temperature of the commingled produced fluid to guard against gelling in fluids with low wax-appearance temperatures.

The functionality of the open loop HSP power fluid system provides the capability to circulate out hydrocarbons from all flow paths above pump setting depth, thus mitigating against cold fluid legs that could cause re-start issues.

System RequirementsThe design and arrangement of the power fluid system is almost as important as the design of an HSP itself—to ensure that consistently high-quality drive fluid is delivered to the machine. An HSP can make use of many of the water processing elements commonly found in oilfield facilities, including separators,

filters/cyclones, and high-pressure pumping systems.

Conventional, high-reliability pumps are used at the surface to generate pressurized drive fluid, and operational control is effected by a combination of variable speed pump drive motors and individual well tuning by use of choke valves locally at the tree. Typically, a single-power water pump will be installed in order to drive up to four HSPs. The use of readily serviceable, conventional water processing systems as a motive source thus provides an opportunity for improved lift system functionality, availability, and reliability.

Field ApplicationsThe simplicity and flexibility of an HSP has been instrumental in its application to a broad range of artificial lift duties, including onshore and offshore applications, multiphase pumping of heavy oil, aquifer lift, and seabed (mudline) boosting, as well as on thermal production applications, such as steam-assisted gravity drainage.

In recent times, multiphase HSPs have been successfully applied to subsea, wet tree production of gassy, heavy oil in Chevron’s Captain field in the UK North Sea. The subsea area of this field has been exclusively produced using HSP technology, with the pumps having achieved an MTTF of over 11 years and a 170-year cumulative operational time.

Field data indicate the successful operation of an HSP on suction gas void fractions in excess of 70%, illustrating the excellent gas handling capability achieved by the combination of helico-axial impeller design and turbine drive. The HSP bearing system provides a wide operating range which enables the well to be produced without distressing the pump. Fig. 3 shows the range of HSP operating points for a single pump achieved on a typical well.

For thermal production operations, the HSP has been designed and qualified to operate at fluid temperatures of up to 220°C in standard trim. Higher-temperature applications can be accommodated through changes to sealing element materials. TWA

Scott McAllister is a mechanical engineer at SPX, responsible for engineering design of high-power downhole and subsea pumping systems within the engineered solutions team at ClydeUnion Pumps, part of SPX. Since joining the company in 2008, he has completed engineering development work, ranging from conceptual design through to the definition of detailed design scopes. McAllister attends offshore production and drilling facilities to

supervise the installation of hydraulic submersible pumps. He holds a BEng (Hons.) degree in product design engineering from the University of Glasgow and the Glasgow School of Art and an MSc degee in mechanical engineering (design) from Glasgow Caledonian University.

175

150

125

100

75

50

25

00 20

HSP EnvelopeTypical conventionalpump envelope

40 60% Design flow

% D

esig

n he

ad

80 100 120 140

Fig. 3—HSP operating envelope. Courtesy of ClydeUnion Pumps.

32

YP Newsflash

Young Professionals Coordinating Committee UpdateThe Young Professionals Coordinating Committee (YPCC) is a 15-member standing committee that is responsible for overseeing programs and activities directed toward SPE young professional members. Each SPE standing committee has a charge—consisting of its responsibilities and reason for being—that must be approved by SPE’s Board of Directors. There must be a permanent need for the committee’s function that remains the same from year to year.

There are three SPE Board committees that each oversee a number of standing committees. The YPCC reports to the SPE Board of Directors Committee on Member Programs. YPCC members are appointed by the SPE president-elect and serve 1-year terms renewable up to two times (for a maximum term of 3 years). Committee members’ terms transition at SPE’s Annual Technical Conference and Exhibition (ATCE).

Merger Between the YPCC and the Student Development CommitteeAn SPE Board Finance and Strategy Committee task force was formed in 2013 to review opportunities for SPE to streamline its overall governance structure. The task force recommended a merger between the Student Development Committee (SDC) and the YPCC, which was approved by the SPE Board at its July 2014 meeting.

The combined committee would help SPE gain a cohesive view of its growing population of young professional members and student members. The combined committee’s perspective could help SPE student members transition into the working world. The charter for the combined committee and its structure are being finalized, and the new committee will take effect starting at ATCE 2014.

Ambassador Lecturer ProgramThe YPCC and SDC are working together to reenergize the Ambassador

Lecturer Program (ALP), with the aim of increasing the number of Ambassador Lecturers and of improving reporting back to SPE after lectures are presented.

The reenergizing program will initially focus on the Northern Asia Pacific Region and the South, Central. and East Europe Region. If you are interested in volunteering as an Ambassador Lecturer, please contact us by email: alp@spe.org. The YPCC is also creating an online version of ALP assistance for new SPE student chapters and for new Ambassador Lecturers preparing to make an ALP visit. The video should be available in the SPE online video library later in 2014.

YP Workshop @ ATCE 2014The YPCC organized a YP workshop that will take place during ATCE 2014. The theme for this year’s workshop is “Expanding Opportunities for YPs in Industry: Thinking Outside Technical and Managerial Roles.” This workshop provides opportunities for young professionals to learn about emerging oil and gas industry career opportunities that require a mix of technical and managerial skillsets. The workshop’s panel discussion speakers have diverse backgrounds—as entrepreneurs,

researchers, leaders of new business development groups, asset managers, and career counselors. For more information, visit the ATCE 2014 website: www.spe.org/atce/2014/.

YP Network on SPE ConnectThe new YP Network is being utilized as a fantastic tool for networking and knowledge sharing. Log on to connect.spe.org and see how the YP Network can benefit you in your role, your career, and even your everyday life. It’s a great way to meet peers from all over the world and share ideas that will continue to stimulate industry involvement.

SPE Bahrain Section YPs Launch Their SPE energy4me Program OutreachAs part of its initiative to educate students about the petroleum engineering profession and industry issues, the SPE Bahrain Section’s young professionals launched a program using SPE energy4me materials so they could share the facts about energy with the public and put a face on the industry. For the program, they chose the slogan “Together, we can make a difference.”

The program was kicked off at Naseem International School on 25

SPE Bahrain Section YPs with students at Naseem International School.

33Vol. 10 // No. 3 // 2014

February 2014, which provided the SPE Bahrain Section’s YP committee with the opportunity to expand the students’ personal, intellectual, and professional horizons by teaching them about the oil and gas industry, its strategic role in Bahrain’s economy, its development, and the valuable role the students could play within it.

Students listened as several YP members shared what a typical day is like in their office. The young professional SPE members hope this might inspire the students to enroll in petroleum-related disciplines, such as petroleum engineering, geology, and exploration, because it seems a good future awaits those who graduate with petroleum-related degrees in Bahrain and around the world.

Tahani Hussain Environmental Specialist,

Tatweer Petroleum Officer, SPE Bahrain Section Board

Section in Focus: TurkeyThe SPE Turkey Section supports four SPE student chapters—the Middle East Technical University (METU) Chapter; Middle East Technical University–Cyprus Chapter; Istanbul Technical

University (ITU) Chapter; and Batman University Chapter—and works to connect each chapter and its instructors with each of the other three chapters and their instructors.

One of the most exciting seminars took place at the METU Petroleum and Natural Gas Engineering (PNGE) Department auditorium on 25 March 2014 in Ankara. The title of the discussion was “Thoughts on Petroleum Engineering Education and Industry–University Collaboration.” Mustafa Onur, a professor at ITU who has developed and taught courses at both the undergraduate and graduate levels at four universities—University of Tulsa, ITU, Universiti Teknologi Petronas, and King Saud University—was the presenter.

The discussion drew about 100 attendees, including 10 instructors from PNGE departments, high-level executives, and students from the METU and ITU student chapters. Onur finished his talk by focusing on petroleum and natural gas engineering’s bright future throughout the world and the invaluable contributions SPE makes to the petroleum and natural gas engineering profession. This event was organized and coordinated by SPE Turkey Section young professionals.

After the talk, a barbecue lunch was held, organized under the sponsorship of Petoil Petroleum. This was the first integration meeting in 2014. The SPE Turkey Section traditionally organizes such meetings twice a year.

SPE Mumbai DiariesThe SPE Mumbai Section has been buzzing with activity this year, thereby helping reinforce Mumbai’s role as the heart of India’s oil and gas industry. The section included a wide variety of activities during its year, including presentations by SPE Distinguished Lecturers, several technical programs and study group meetings, and Ambassador Lecturer Program efforts.

The year kicked off with a special emphasis on SPE membership renewal and recruitment. Seminars encouraged companies to sponsor professional employees for SPE membership and taught about the efficient use of social media and section networks. The section also donated Braille education kits to the National Association for the Blind, Mumbai, for use by visually impaired children. The kits included a brief article, written in Braille script, about the oil and gas industry and its contribution to daily life.

The section, with the support of SPE International, established an SPE student chapter at the Indian Institute of Technology, Bombay, whose purpose is to open avenues for more students to benefit from SPE activities.

The year was equally successful for the YPs themselves, who not only participated in ALPs across India but also, along with regular SPE activities, volunteered at local schools. A notable YP activity was going on a geological field trip to a Mumbai beach to understand fluid flow behavior. The field trip ended the Mumbai Section’s year on a high note with the promise of an even more enthusiastic year to follow. TWA

Mumbai Section young professionals enjoying a field trip to a Mumbai beach to understand fluid flow behavior.

34

While Amsterdam is constitutionally the capital of the Netherlands, The Hague is its administrative capital—the seat of its government and location of its parliament, the capital city of the province of South Holland, and the city where Holland’s King Willem-Alexander and Queen Máxima reside. Located in southwestern Holland on a coastal plain, with its center just inland from the North Sea, Den Haag or ’s-Gravenhage (i.e., the count’s haghe or “hedge”) has several phrases it is known by: the “Royal City by the Sea,” the “Residence City” where the Dutch nobility resides, and the “International City of Peace and Justice” where more than 160 international institutions and organizations dedicated to the cause of world peace are housed.

The city is grand and stately, filled with gardens and parks, renowned museums such as the Mauritshuis and the Gemeentemuseum art museums, and many architectural wonders including embassies and royal residences along the beautiful North Sea coastline. Although the Dutch weather can be harsh at times—frequently cold and very windy—those who live there enjoy the café culture and gastronomic delights offered by the city’s numerous eateries.

Fit and Active CitizensScheveningen, the best-known seaside resort on the Dutch coast, is one of The Hague’s eight districts. On summer days, people are often seen kite surfing and bungee jumping around the lighthouse at Scheveningen; and during the cold winter months, people love to go ice skating on the 550-m2 rink set up in the square in front of the Kurhaus.

The active Dutch lifestyle is very much reflected in The Hague, with most people riding bicycles to work and running to keep fit in all types of weather. The Dutch attitude towards fitness garners a lot of praise and respect from foreigners and expatriates living in the city.

A Center for Peace, Hope, and DiplomacyFor many people and corporations, The Hague represents a beacon of hope, another chance at justice. The Peace Palace in the center of The International Zone houses the keepers of international justice—among many other organizations, these include the International Court of Justice and Permanent Court of Arbitration. Even though it actually is the fourth-largest

United Nations location, the Hague has been called the United Nations’ “second city.”

During the 13th century, the city was just a hamlet built around a count’s castle. In the 17th century, when the Dutch Republic played a leading role in Europe, The Hague became a center for diplomatic negotiation. The royal residence was based here, leading to the establishment of embassies in The Hague, sparking its metamorphosis into an international city. The 20th century saw The Hague coming of age as an international city of peace and justice, with numerous conferences and arbitrations taking place there.

The Hague: An Important Oil and Gas HubA large number of oil and gas, international engineering, and consultancy firms have bases in the region around The Hague. Several international corporations have corporate headquarters in The Hague—among them Holland-based Royal Dutch Shell; energy infrastructure company Chicago Bridge & Iron; Aramco Overseas, a subsidiary of Saudi Aramco; APM Terminals, a separate business of

Shruti Jahagirdar, Shell Technology India; Harshad Dixit, Halliburton; Jim Stiernberg, Chevron; and Kristen Weyand, ConocoPhillips

THE YOUNG PROFESSIONAL’S

GUIDE TO

The Hague, Netherlands

35Vol. 10 // No. 3 // 2014

YP Guide

Moller-Maersk Group; and Total E&P Nederland, Total’s Netherlands operation. In addition, one of Schlumberger’s four principal offices is in The Hague. The presence of the national government and its role in issuing oil and gas licenses (in the Dutch North Sea Shelf) makes The Hague an ideal location for oil companies’ administrative offices. More than 10,000 people work within the oil and gas sector in The Hague region.

Currently, the Delft University of Technology is the only university that offers an SPE-recognized petroleum engineering degree in the Netherlands, although several other Netherlands universities offer courses related to the petroleum industry. Delft University is also home to the first Netherlands-based SPE student chapter, established in 1984. The industry’s growing need for young talent has been reflected in the creation of two additional Netherlands-based SPE student chapters in the past 10 years: Utrecht University, established in 2009; and Vrije University Amsterdam, established in 2010.

The Netherlands is not a significant producer of liquid fuels, but it is an important European liquid fuels transportation and processing hub, according to the US Energy Information Administration (EIA). In addition, it is a major petroleum liquids refining and storage center. After Norway, the EIA states, it is the second-largest producer and exporter of natural gas in Europe. At the start of 2014, Oil & Gas Journal estimated the Netherlands’ proved reserves at 302.5 million bbl of oil and 39.9 Tcf of natural gas, well behind the other North Sea mainstays—the United Kingdom, Norway, and Denmark. However, activity in the Netherlands is high. Proved oil reserves have tripled between 2010 (100 million bbl) and 2014 (302.5 million bbl), according to the EIA, reaching a level not seen since 1985.

According to the Netherlands Oil and Gas Portal (www.nlog.nl), in 2012, the Netherlands saw 2.6 Tcf of gas and 8.1 million bbl of oil production from over 250 developed gas fields and 15 producing oil accumulations. Gas is the most significant hydrocarbon fuel for the

Netherlands, and most of it comes from the largest onshore natural gas field in western Europe, Groningen, which was discovered in 1959, with first production in 1963. It is located in northern Netherlands. The remaining gas fields in the country are considered “small fields” in comparison to this giant.

The government has capped Groningen’s production—which is the source of approximately 75% of the country’s natural gas output—at 1.5 Tcf per year from 2006 through 2015 as part of a policy to stem reserve declines and encourage production from smaller fields. (www.eia.gov).

The largest onshore oil field in western Europe, Schoonebeek, is also located in the Netherlands, extending partially into Germany. Discovered in 1943 while Holland was under German occupation, Schoonebeek has seen a recent revitalization after being shuttered in 1996 due to high operating costs and low oil prices. With rising commodity prices and new seismic processes reducing risk of geological uncertainty, measures were taken beginning in 2009 to bring the field back on production. An aggressive drilling program of 73 wells, including 25 steam-injection wells and a revitalized infrastructure, paved the way for production to resume in January 2012. Nederlandse Aardolie Maatschappij (NAM) anticipates that it will produce 120 million bbl from this oil field in the next 25 years, according to EBN’s 2013 Annual Report. EBN is an independent company with the Dutch state as the sole sharholder.

Faced with declining gas reserves (reserves peaked at just over 70 Tcf in 1987), companies in the Netherlands maintain a focused effort on improving ultimate recovery from existing resources. Operators are extending existing field life by utilizing methods such as velocity strings, foam injection, jet pumps, tail pipe extension, compression, and plunger lift. EBN notes in the annual report that the implementation of such methods has increased the country’s recoverable reserves by about 2 Bcm of gas (71 Bcf) in the past 10 years.

Not limited to simply improving production from existing fields, the

development of recent discoveries looms on the horizon. In 2012, six successful exploration wells added a total of 3.5 Bcm (12.4 Bcf) to Dutch resources. According to Wintershall, these were successfully drilled the F17-10 chalk oil-well in late 2012, making it the most recent Dutch offshore discovery. With two appraisal and three wildcat wells planned for this year, Wintershall estimates the oil accumulation to be 30 MM bbl of oil (www.wintershall.no).

Key challenges to the industry include public perception that natural gas reserves are declining. And—not to be exempt from the nearly universal issue—the industry faces opposition from the ongoing shale gas debate and anti-hydraulic fracturing proponents. However, with the long history of successful production in this country, combined with innovative methods of extending field life and new field development looming on the horizon, the Netherlands continues to be positioned for a healthy contribution to hydrocarbon production in Europe.

While tourists are drawn to The Hague for its history, architectural wonders, and vibrant spirit, the oil and gas industry embraces this multifaceted city as an important center for the petroleum sector. This year, SPE members have another reason to gravitate to the Royal City by the Sea—The Hague is only an hour away from the site of SPE’s 2014 Annual Technical Conference & Exhibition in Amsterdam.

YPGT: A Glance Back and a Glance AheadThe section you’re reading, called the “Young Professional’s Guide to…..” (YPGT) the cities of the world, has flourished as a consistently favorite section for The Way Ahead’s readers because of its ability to connect with its audience in various parts of the world. It captures the truly global spirit of the oil and gas industry where overseas travel is frequent. YPGT celebrates the international nature of the petroleum industry by investigating the global oil and gas hubs and metropolitan cities along with sharing top stories of

YP Guide

the developments and technological advancements in our business.

The “YP’s Guide to….” section debuted in the 2009 Vol. 5 No. 2 issue, with an article focused on Aberdeen, Scotland. YPGT’s tone is friendly yet informative for the traveling reader. To this end, the article typically covered major sightseeing landmarks, local customs to observe, educational institutions that power growth in this industry, the largest companies in the area, and the political climate regarding the oil and gas business. Designed to help professionals when they did business around the world, YPGT was a cross between a tour guide and a brief essay about oil-and-gas-related activity..

Scoping an article with such ambition was not easy. We could not travel to every location to report firsthand experiences, and many times we could not obtain input from someone with intimate knowledge of the technical breakthroughs and discoveries occurring in that part of the world. In hindsight, the more interesting pieces were probably those covering areas that seldom had major media exposure yet played an integral role in commodity trading and, in many cases, the economy of a state.

Improvements in technology were often included in the discussions, as they are the main driver for recovering dwindling reserves and the impetus for further investment in these petroleum centers. We also often briefly sketched regional geological trends, the reserves figures, and production to date. A sidebar listing some interesting facts about the city often left our readers amazed and wondering what the city would really be like. It has been a truly a memorable decade, during which we covered more than 11 places prominent in the oil and gas industry: Sakhalin Island; Calgary, Alberta; Perth, Western Australia; Port Harcourt, Nigeria; Dubai, UAE; Houston, Texas; Jakarta, Indonesia; San Francisco, California; Rio de Janeiro, Brazil; Abu Dhabi, UAE; Mexico City, Mexico.

While our team remembers the days of putting together those lively articles, we are also looking forward to further experimentation with different

approaches. Our article in Vol. 10 No. 1 “A YP’s Guide to Continental Savvy: Energy Entrepreneurship Across Three Continents,” was one such experiment: Instead of focusing on one city, we covered three continents, each with different examples of energy-related entrepreneurship.

The response to the “Continental Savvy” article was so positive that in the following issue—with its overall theme “Job Security in the Oil and Gas Industry”—we once again took you around the world. But this time we focused on those countries where job opportunities were created or affected by technology advancement, geopolitics, or market expansion, all of which demanded that we tap into the insights of experts we knew. We stressed the impact these phenomena had on oil and gas industry development and quality of life in the highlighted countries.

Our aim is to keep bringing you multidimensional stories from our industry across the world, enabling trend comparisons among specific topics. Going forward, it will be interesting to compare energy industry trends specific to geographical locations, cultures, areas of industrial growth, political stability issues, and the availability of local talent. This will be in addition to travel tips and historic facts about the cities. We hope to provide our readers with a wider perspective regarding the actions and decisions of popular energy hubs’ “makers and breakers.” Additionally, we would like to extend the scope of our articles, where appropriate, on safety and environmental issues faced by some countries and the impact they have on the oil and gas industry and government relations.

Of utmost importance, the section seeks to stay up to date about the industry’s most recent developments. We will continue to expand our horizons to bring you interesting stories emerging from the oil-dominant provinces and their business models. The YPGT section is ready to be your guide as you explore the oil and gas industry across cities, countries, and continents. TWA

If knowledge is power,get ready

to be supercharged.

Discover more at www.petrowiki.org.

37Vol. 10 // No. 3 // 2014

Academia

The emergence of unconventional resources as a viable source of energy in the US is the combined result of persistent exploration efforts and development of new drilling, completions, and stimulation technologies.

However, it is estimated that nearly 90% of tight oil and 65% of shale gas will be left in the reservoir using current methods of production (US Energy Information Administration, 2013). For the US to move “steadily towards meeting all its energy needs from domestic resources by 2035” (Bloomberg, 2013), proper management of its unconventional resources to achieve long-term sustained production and improved recovery is of significant interest to all stakeholders. While exploration, well construction, and stimulation will continue to be critical for unconventional resource recovery economics, sustained productivity and effective depletion are expected to be

growing challenges in the way ahead for unconventional reservoirs.

Why Unconventional Reservoirs Are DifferentWells in tight unconventional plays enjoy a high initial production (IP)

rate accompanied by a high decline rate (Fig. 1). After the first 2 to 3 years, production decline slows to a linear trend. Well construction and completion aspects—such as well length, hydraulic fracture properties, and the contribution of intercepted natural fractures—control the initial high-production-rate period. During the following period, when a lower production rate becomes the norm and production decline slows, reservoir flow and transport mechanisms dominate the well response.

While the initial production period is important for favorable economics, the long-term production period is important for effective depletion of the reserves. Because of economic incentives, the industry has focused mainly on technologies that obtain higher IPs. As the perception emerges of unconventional reserves as long-term resources, the need to understand long-term reservoir flow characteristics becomes more appreciated.

The Way Ahead for US Unconventional ReservoirsErdal Ozkan, Colorado School of Mines

Erdal Ozkan began his professorial career at Istanbul Technical University in 1989. After serving as a research associate at TU during 1997–98, he joined the Colorado School of Mines in 1998 where he now is the director of the Unconventional Reservoir Engineering Project and co-director of the Marathon Center of Excellence for Reservoir Studies. The author or coauthor of three books and over 100 technical papers, his technical expertise includes reservoir

engineering, modeling unsteady flows in porous media, pressure-transient analysis, horizontal and multilateral well technology, and unconventional oil and gas reservoirs. Ozkan received SPE Distinguished Membership in 2009; the SPE Formation Evaluation Award in 2007; SPE’s A Peer Apart Award in 2007; and Distinguished Technical Editor Awards in 1998, 2006, and 2013, In addition, he received the distinguished alumni award from the University of Tulsa in 2007. He has been executive editor, associate editor, and editorial board member of several leading petroleum engineering journals. Ozkan has served as chair or cochair of several SPE conference and workshop committees; technical director of the SPE R&D Technical Section; and as an SPE Distinguished Lecturer during 2011–12.

Fig. 1—Production decline trends for vertical wells in conventional plays and horizontal wells in unconventional plays.

Drilling &completion technologies provide the early return of the investment

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Reservior technologoes ensurethe long-term sustained production

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Bakken Horizontal Well(10,000 ft & 30 Frac Stages)

Average US vertical well

38

Academia

Flow and Phase Behavior in Nano-Porous ReservoirsNano-porous unconventional reservoirs possess multiple flow mechanisms at different scales.

Advection is the fastest such mechanism; however, its contribution to total flow is the least due to the small

proportion of the pores and natural fractures in which Darcy flow occurs.

In matrix nano-pores, much slower diffusive processes occur. These are often attributed to molecular dynamics, concentration gradient, and osmotic pressure caused by pore proximity and heterogeneity. For example, recent

research (Javadpour et al., 2007; Ozkan et al., 2010; and Akkutlu and Fathi, 2012) has established that, at the dominant pore sizes of gas shales, the Knudsen number becomes large enough for slip flow to prevail at low pressures (Fig. 2). In addition to slip flow, Darcy flow in macro pores and fractures and desorption in the pores of the organic material are potential contributors to gas flow in shales.

Slip flow is not likely to play a role in liquid flow in tight formations. In these plays, concentration-driven diffusion comes into effect due to pore-size-dependent bubble-point suppression or dew-point enhancement. Bubble-point suppression is a result of increased capillary pressure and surface forces acting on the liquid and gas phases as the pore size decreases (Firincioglu et al., 2012; Honarpour, 2012; Sapmanee, 2011; and Devegowda et al., 2012). As a result, phase behavior becomes a function of pore size when pore size drops to nanometers (Fig. 3). Having different liquid pressures at bubble point as a function of pore size creates concentration-driven diffusion in nano-porous unconventional formations. However, because some pore-throat sizes are at the scale of membrane pores, they do not permit the passage of heavier hydrocarbons with large molecules. This sieving effect may cause osmosis-like behavior, which may act counter-currently to concentration-driven diffusion in heterogeneous nano-porous systems.

Flow Modeling in Unconventional Reservoirs Current practice amongst many practitioners is to use conventional flow models with minor adjustments. When the flow mechanism and phase behavior deviate considerably from conventional flow perceptions, the conventional models’ predictive capability becomes moot.

Current attempts to alleviate modeling problems fall into two categories. The first is motivated toward responding to the industry’s immediate needs and focuses on

Knudsen Number: Kn=Mean Free Path of Fluid Molecules

Macroscopic-Average Pore-Diameter

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Λ

No-SlipConditions

ContinuumFlow

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Macro-scale pores Nano-scale poresFast-Evolving Processes Slow-Evolving Processes

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Kn Kn ∞10-3 10-2 10-1 100 101

SlipFlow

TransitionalFlow

Free-MolecularFlow

SlipConditions

Fig. 2—Knudsen (1909) flow regimes relative to macro- and nano-scale pore systems.

Fig. 3—Phase diagrams of confined and unconfined gas-condensate mixture (Sapmanee, 2011; Devegowda et al., 2012).

No confinement

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39Vol. 10 // No. 3 // 2014

tweaking existing conventional models to imitate observed field performance. In the absence of a comprehensive, coherent, and consistent physical framework, these models can provide a trend line for short-term field performance, but they have limited capabilities to predict longer-term behaviors and guide interventions to improve field performance.

The second aims to fundamentally overhaul perceptions of flow in nano-porous unconventional reservoirs. These efforts focus on the description and coupling of multiple flow mechanisms acting under differing molecular dynamics and continuum conditions. Combined with the heterogeneity of the flow domain, the existence of concurrent flow mechanisms leads to a heterogeneous velocity field, which may be handled outside conventional diffusion (i.e., Darcy flow and Fickian diffusion) models (Raghavan and Chen, 2011). These efforts require more time than those in the first category to mature and develop tools for practicing engineers and scientists.

Performance and EUR Prediction in Unconventional Reservoirs The common practice of developing unconventional reservoirs with long, multistage-fractured horizontal wells results in elongated infinite-acting flow periods. In the absence of data indicating the boundedness of the drainage area, techniques to estimate economic ultimate recovery (EUR) require external data or subjective assumptions. The application of decline-curve analysis ideas to predict future production and estimate EUR in unconventional reservoirs (Lee and Sidle, 2010) thus often lacks a boundary  reference.

Another complication is the long linear flow (sometimes lasting decades) dominating the infinite-acting behavior of hydraulically fractured horizontal wells. With linear flow, the diagnostics required for independent estimation of the parameters of interest do not reveal enough to be of real use, because only the product of the permeability and fracture half-length can be obtained. This problem has important repercussions for well spacing.

In shale-gas plays, the drainage area of the well is assumed to be limited to the stimulated reservoir volume (SRV). If the permeability of the SRV is predicted to be low, then the fracture half-length, and thus the drainage area of the well, will be estimated as being large; the opposite is also the case. Usually, microseismic data and numerical simulation are used to complement linear-flow analysis to fine-tune SRV volume. However, without true boundary-dominated flow, estimation of the drainage area always includes some order of uncertainty.

Looking Toward the FutureThe unconventional reservoir “revolution” has led to the second-biggest oil boom in the US—the largest having started in 1859 with the US’ oil discovery in Pennsylvania. Perhaps more important than the volumes of oil and gas produced today from US unconventional reservoirs is the confidence the industry has gained from accomplishing production from shale, once seen as oil reservoirs’ impermeable seal.

In the years ahead as the industry continues to need unconventional reservoir technical and operational advancements, those now beginning their oil and gas careers will have major contributions to make. TWA

Long Life, TWA!

When SPE’s TWA magazine came to life 10 years ago, most SPE members were unaware it was the end result of several years of preparatory

work carried out by an international dynamic team of talented, passionate, and inspired young professionals. In line with SPE’s vision and mission, their ambition was to grant novel opportunities to accelerate learning and to boost young professionals’ personal and professional growth.

From that visionary team’s point of view, the availability of a global strategic communication channel such as TWA—providing visibility, sense of identity, open space for discussion, and extended learning opportunities—appeared a truly compelling choice. That sense of urgency was readily conveyed to and perceived by the SPE staff and board. As mentors, we ensured trust, autonomy, and continued support—soliciting in exchange only excellence.

Over these 10 years, TWA has inspired the development of many young professional programs around the world. More than 110 young SPE professional members served on the editorial committee, wrote articles, interviewed top executives, sent comments and suggestions, provided news and photos of their local events and achievements; and many thousands of readers have benefited from the wisdom each story in each issue had to share—from industry leaders, top scientists, economists, and seasoned or young professionals.

Today, with enormous pride and satisfaction, we notice copies of TWA on so many young professionals’ desks all over the world, confirming that the original idea was right and timely.

Congratulations on your anniversary: May you ever suffuse TWA with fresh energy, creativity, effort, and inspiration!

Giovanni Paccaloni2005 PresidentSociety of Petroleum Engineers

Your Best Shot

Coiled Tubing Rig Up, Kapuni Field, Taranaki, New Zealand

Photo by Wei-Lin Fan, Graduate Production Technologist, Shell Todd Oil Services Photo taken of a coiled tubing rig-up operation, using a 12.1-megapixel Canon IXUS 115HS.

Inside a Wooden Derrick, Taft, California, USA Photo by Elizabeth Reale, Petroleum Engineering Student, Colorado School of MinesThis photo depicts the inside of a wooden derrick displayed at the West Kern Oil Museum Inc. Photo was taken with an 8-megapixel iPhone 4s (f/2.4).

Submit your entry today to bestshot@spemail.org. This contest is open to all SPE members. The two best photographs will be published in the next 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.

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