Not because of the crash...We’re in the age of ever advancing software capabilities. If you are involved in HR or recruiting, you'll be aware that there's deeper and wider software integration available than ever before.
Software solutions will allow you to post a job across hundreds of platforms, then receive applications and CVs seamlessly. The same software will have CV reading and keyword matching capabilities that are closing the gap between bots… and you!
If fact, unless you have a deep understanding of the industry that you are recruiting for… The bots may already do a better job than you…
Once AI takes off, the ‘human’ side of recruiting might be better done by software as well.
Candidates who feel let down by recruiters that do not treat them or their data properly will see the satisfying irony here… Thousands of recruiters out of work, and unable to get a job, sending their CV to bots, who simply don’t give a damn…
A smoother, more accurate and sophisticated process in applying for jobs will help some, and hurt others.
Once automation takes over, there will be winners, for example:
Those of you who have shining resumes and experience that might get overlooked by recruiters who spend a few seconds scanning each CV because they've little time.
Or those who have a very specific skill set, one which is not grasped fully by the typical recruiter, who was selling timeshare last year, and is likely to be selling used cars next year, (it’s a transient business).
There will be losers as well, for example:
Those who lie, exaggerate or bend the truth when completing their CVs, either through memory failure, or lack of integrity. (The percentage is higher than you would imagine).
Those who rely on networking to get jobs. If a recruiter, HR manager or Rig manager has a choice between their current position…
… Mountains of unsuitable CVs and a pocket book of people who are a known quantity.
… A choice based on pure and accurate data, AI software that can literally pick the best person for each position.
What will the decision maker do? They are more likely to put forward the best, rather then taking the shortcut of hiring ‘good old Fred’ who they know won't completely let them down.
In the meantime…
What shall we do? We can’t all take an extended vacation at the beach, waiting for the bots to solve our problems, or ruin us…
We make the best choices, for the situation that we are in for the foreseeable future!
This means that you have decisions to make. If you are reading this as a recruiter or HR manager, hopefully I've stimulated a bit of thought. You know that the current system has its limitations, and that by maximising your own efficiency and productivity, you can do the best that you can, with what you’ve got… Right?
I believe that the very best solution for those who are looking for personnel for a drilling team, is to look at a talent pool that is industry and sector specific.
If you wanted to find a great programmer, you're more likely to find them in a community of programmers than in a generic job board, or even hundreds of auto-posting boards. Does this make sense to you?
Until AI improves massively, which could take 5 years, or perhaps 15, how will you fill drilling job vacancies, why make life hard for yourself? Do you really want to be swimming in candidate soup, publishing your job to hundreds of general job boards? Attracting thousands of bad fit candidates?
If you're a job seeker and you want to find a drilling job, where do you look?
There are plenty of choices online, and due to the downturn there are plenty of opportunities to read and share stories about our job hunting (or candidate hunting) experiences.
One place to see conversations about this is on social media. There are places that aren’t really suitable, such as Instagram or Pinterest, but it's possible to find plenty of job adverts, on LinkedIn and Facebook. With millions, or more than a billion people logging on the these two platforms every day, there's plenty of opportunity to see job related conversations happening.
Is this a good place to look for a job, or for a candidate? The feedback that we see is that there's a lot of noise. Candidates are unsure of which job postings, recruiters and oil company accounts are ‘real’. After all, anyone can create a company account and post jobs in order to collect data, or worse...
When the reputation, and performance of many online recruiters leaving a lot to be desired...
How do you know which ones never had a job to promote?
Which ones were real, but couldn’t be bothered to even send you a quick courtesy reply?
The anecdotal reports are there for anyone to see, that the noise is high and the quality is low.
A big waste of valuable time for the employers who ask for an application form to be completed and get 4000 'interested, check my profile' type responses.
Heartache for the job seekers who send their details and/or fill in dozens or even hundred’s of applications without even a courtesy response.
Where else can you look for a good online job matchmaking service?
Many or most jobs boards are filled with out of date candidate details and there is no filtering and cleaning of the data. Who ends up doing this? The HR manager, rig manager or any DIY inclined person who thought that they could save some money and ended up wasting a lot of time instead.
Many traditional recruiters charge very high rates that are not congruent with lower oil and gas prices. The numbers don’t work in an environment of bankruptcy and ‘beggar thy neighbour’ market share strategies around the world.
General job sites, and sites that offer themselves to every type of staff that might even cycle past an oil company head office suffer from the same noise and quality problems.
Life is complicated enough, why waste time with noise, irrelevance and inaccuracy?
We don’t think you should. If you want to get a job done right, deal with the specialists. You want drillers, or a drilling job? deal with industry specific partners.
Whether you are on the HR/recruitment side, or the labour side of the equation. Support industry services by using them, and we can all make each others lives easier.
Something interesting to share?
Join NrgEdge and create your own NrgBuzz today
There are things brewing within OPEC. At a meeting in Baku, Azerbaijan last week – which was meant to set the stage for a formal meeting in April to review the current supply deal among the 24-country OPEC+ block – the conclusion of the meeting was that the April meeting would be deferred. The review will now take place at OPEC’s regular meeting in Vienna in June, which is mere days before the current supply deal is scheduled to end. That’s cutting it close, but more interesting for market observers is that it points to the Saudi Arabia-Russia bromance souring.
Prior to the meeting, Saudi Arabia had gone on record to state that the Kingdom believed that OPEC’s job in rebalancing the oil market was far from over and that output cuts were necessary to continue into the second half of 2019. Defying US President Donald Trump’s Twitter tantrums – especially with the Kingdom implicated in the assassination of Saudi dissident Jamal Khashoggi – Saudi Arabia is firmly behind continuing restricted supply. In the past, Saudi Arabia would most likely to be able to bully its way into an OPEC consensus. But now, it has to deal with an equally powerful 20-ton gorilla in the same room: Russia.
The success of the OPEC+ club over the past two years has been down to this close relationship between the world’s two largest oil producers. This had allowed crude prices to recover from sub-US$50/b levels. But the latest meeting is also the latest sign that all may not be well in the friendship. First, a joint Saudi-Russia meeting at the World Economic Forum in Davos was called off. Second, February data showed that while Saudi Arabia and its allies were doing far more than necessary to cut their crude production, Russia was shuffling its feet with less than 50% adherence, claiming that it needed more time to implement the cuts. And last week, despite Saudi Arabia lobbying for an extension to the cuts and general backing from members including Iraq, Russian Energy Minister Alexander Novak was in opposition. The official reason was that OPEC+ would need clarity on market situation before planning the next move, given the disruption brought about by ongoing and developing American sanctions on Iran and Venezuela. In the absence of necessity, the two crude powerhouses have drifted back to their default positions: Saudi Arabia’s aggression and Russia’s conservatism.
So while the world waits and watches for OPEC+’s next move, the market is analysing the potential impact of a strained Saudi-Russia relationship. But necessity might bring the two back together again, since they now face a common foe – rising US crude production. OPEC’s secretary general recently met with key executives in the US shale oil industry. This was billed as a ‘friendly conversation on current industry trends’ and interpreted as an attempt to cajole American shale producers in a mutually-beneficial stabilisation of the market. It is ridiculously unlikely for the US to ever join the OPEC+ club, but if the move could convince US shale firms to temper their expansion to prevent global oversupply, it might be worth it. Because OPEC has accompanied the olive branch with a threat – if OPEC does all the work to stabilise markets only to have American shale take advantage of the situation, it could very well reverse its stance and turn the OPEC tap on full to swamp the market once again. It’s a classic example of game theory, and one to watch as the power dynamics of global oil continue to change.
Key upcoming dates for OPEC:
Headline crude prices for the week beginning 18 March 2019 – Brent: US$67/b; WTI: US$58/b
Headlines of the week
Midstream & Downstream
Risk and reward – improving recovery rates versus exploration
A giant oil supply gap looms. If, as we expect, oil demand peaks at 110 million b/d in 2036, the inexorable decline of fields in production or under development today creates a yawning gap of 50 million b/d by the end of that decade.
How to fill it? It’s the preoccupation of the E&P sector. Harry Paton, Senior Analyst, Global Oil Supply, identifies the contribution from each of the traditional four sources.
1. Reserve growth
An additional 12 million b/d, or 24%, will come from fields already in production or under development. These additional reserves are typically the lowest risk and among the lowest cost, readily tied-in to export infrastructure already in place. Around 90% of these future volumes break even below US$60 per barrel.
2. pre-drill tight oil inventory and conventional pre-FID projects
They will bring another 12 million b/d to the party. That’s up on last year by 1.5 million b/d, reflecting the industry’s success in beefing up the hopper. Nearly all the increase is from the Permian Basin. Tight oil plays in North America now account for over two-thirds of the pre-FID cost curve, though extraction costs increase over time. Conventional oil plays are a smaller part of the pre-FID wedge at 4 million b/d. Brazil deep water is amongst the lowest cost resource anywhere, with breakevens eclipsing the best tight oil plays. Certain mature areas like the North Sea have succeeded in getting lower down the cost curve although volumes are small. Guyana, an emerging low-cost producer, shows how new conventional basins can change the curve.
3. Contingent resource
These existing discoveries could deliver 11 million b/d, or 22%, of future supply. This cohort forms the next generation of pre-FID developments, but each must overcome challenges to achieve commerciality.
Last, but not least, yet-to-find. We calculate new discoveries bring in 16 million b/d, the biggest share and almost one-third of future supply. The number is based on empirical analysis of past discovery rates, future assumptions for exploration spend and prospectivity.
Can yet-to-find deliver this much oil at reasonable cost? It looks more realistic today than in the recent past. Liquids reserves discovered that are potentially commercial was around 5 billion barrels in 2017 and again in 2018, close to the late 2030s ‘ask’. Moreover, exploration is creating value again, and we have argued consistently that more companies should be doing it.
But at the same time, it’s the high-risk option, and usually last in the merit order – exploration is the final top-up to meet demand. There’s a danger that new discoveries – higher cost ones at least – are squeezed out if demand’s not there or new, lower-cost supplies emerge. Tight oil’s rapid growth has disrupted the commercialisation of conventional discoveries this decade and is re-shaping future resource capture strategies.
To sustain portfolios, many companies have shifted away from exclusively relying on exploration to emphasising lower risk opportunities. These mostly revolve around commercialising existing reserves on the books, whether improving recovery rates from fields currently in production (reserves growth) or undeveloped discoveries (contingent resource).
Emerging technology may pose a greater threat to exploration in the future. Evolving technology has always played a central role in boosting expected reserves from known fields. What’s different in 2019 is that the industry is on the cusp of what might be a technological revolution. Advanced seismic imaging, data analytics, machine learning and artificial intelligence, the cloud and supercomputing will shine a light into sub-surface’s dark corners.
Combining these and other new applications to enhance recovery beyond tried-and-tested means could unlock more reserves from existing discoveries – and more quickly than we assume. Equinor is now aspiring to 60% from its operated fields in Norway. Volume-wise, most upside may be in the giant, older, onshore accumulations with low recovery factors (think ExxonMobil and Chevron’s latest Permian upgrades). In contrast, 21st century deepwater projects tend to start with high recovery factors.
If global recovery rates could be increased by a percentage or two from the average of around 30%, reserves growth might contribute another 5 to 6 million b/d in the 2030s. It’s just a scenario, and perhaps makes sweeping assumptions. But it’s one that should keep conventional explorers disciplined and focused only on the best new prospects.
Global oil supply through 2040