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Last Updated: September 13, 2017
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Career Development
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By Moji Karimi


Here are some of the repeated discussion topics that seem to be common and specific to O&G.

Before I get to that, and as one of the general discussion points let me clarify the startup concept (my definition of it anyways) in contrast with a small business or consulting.

“Startup is a company based on a somewhat risky (unproven) idea that solves a pain-point in an innovative way. A startup should definitely have intellectual property and could be acquired in a relatively short amount of time”. Therefore, small “me too” businesses or consulting firms don’t fit here. Nothing wrong with those but they follow a different growth path and have unlike business models and priorities. By the short time I mean 7-10 years (for Tech startups that more like 3-5 years, O&G product/market fit takes longer for several reasons). Also have to mention, by O&G startup I’m not referring to a new E&P company (though that is also a very interesting concept. See UpCurve Energy as a good example).

For O&G folks who have lost their job it’s very tempting to immediately think about applying the same skill-set they have learnt to:

- provide somewhat the same service as bigger companies with a twist. Actually down market is the worst time to start a “me too” business. Same services take you to price war with bigger companies and you are certain to lose. Where you could shine is if you compete on “value” and have a clear differentiation.

- become a consultant. Even though this is a nice and quick way to make up for some of the lost income, it’s not a sustainable source and you are going against several other experts who are thinking about doing the same. You are also banking on a shrinking market.

Here are some ideas to consider before starting your business:

  • Read your non-compete agreement with your ex-employer line by line. It’s very common for entrepreneurs to have worked at a big corporation and while there learned the skill-set that’s enabling them to develop original ideas. This is a risky area and you should definitely consult with a lawyer.
  • Before spending any time or money on building or coding anything, find out if this is a problem worth solving. As engineers, we love to jump into building things but, in case of building a company, you have to control the urge and spend proper time researching the market and speaking with future clients to reality-check and refine your idea. That doesn’t mean fully disclosing how the idea works, but what problem you are targeting to solve, and how you compare to the incumbent methods.
  • Think about the company not about the product. People think products define companies, it’s actually not true, business models create companies and your solution/product is only a part of it. A quick way to build one is the business model canvas with the integral part of it being the value proposition. Here is a quick Udemy course on Lean Canvas which I think is better refined than the business model canvas.
  • Think about the milestones for your company, for O&G these could be 1- research 2- business model 3- prototype 4- field trial 5- commercialization. Or you can follow a more general flow-work like the lean startup model. In either case think about what resources you need for each phase.
  • For each petroleum engineer out there with a novel idea there is also a business development manager who is looking for an idea to execute upon. So no matter what side you are on, start networking with the mindset beyond looking for a job, but to find a business partner with skill-set complementary to yours.

Initially the purpose of this post was for those who have lost their job recently; but some aspects also apply to the ones currently employed and want to have a plan B. Working full time and trying to develop an idea at nights and weekends has its own very interesting challenges.

At the end, starting a new venture isn’t easy, if it was everyone would be doing it. However, there is nothing more satisfying that controlling your own destiny.


*This article was first published on 4 February 2016 by Moji Karimi and is reprinted here with full permission.

**About the Writer:

Moji Karimi is an oil and gas entrepreneur who has helped ideate, develop, and commercialize technology for big companies such as Weatherford and has now begun focusing on startups. Currently, Karimi is the business development manager at Biota Technology, a startup that is commercializing DNA Sequencing in the oil and gas industry. He is also a cofounder of SPE Gulf Coast Section Entrepreneurship Cell which is an initiative to educate and connect entrepreneurs, decision makers, and investors. Karimi holds BS and MS degrees in drilling and petroleum engineering, respectively.

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CARIVS 2020

We are excited to bring together the first ever Caribbean Oil & Gas Virtual Summit-2020 to be held from 16th - 18th September 2020.

 

Due to the current situation, this event is aimed at keeping the region's Oil & Gas community connected virtually and present an excellent networking opportunity all from the comfort of your office/home without the need to travel in these challenging times. There will also be a dedicated Virtual Exhibition focusing on the Operators, Prime Sub Contractors, Governments, Associations as well as the wider regional and international Oil & Gas Community with a particular focus on Guyana, Suriname and Trinidad.  

 

The Conference & Virtual Expo would feature Suriname, Guyana, Bahamas, Barbados and Trinidad and participants from around the globe would present thought provoking keynotes, oral and poster presentations; displays of services, technology and investment opportunities will be available for both national and international companies.

 You can also check the website www.carivs.com for further updates. We are expecting around 200 companies to be part of this conference. Both the Website and the Brochure will keep getting updated in coming days with further information about Speakers, Exhibitors, Sponsors, Content, Agenda etc. 

 Also I have attached a dropbox link. You will get access to the event platform through this link. This is in order for you to get an understanding of how the event platform works.

Let me know if you have any questions in the meantime

 

Stay Safe.

 https://www.dropbox.com/s/1an67vaywnbryo3/CARIVS%20Video%20Guide_4.mp4?dl=0


July, 01 2020
U.S. commercial crude oil inventories reach all-time high

weekly U.S. commercial crude oil inventories

Source: U.S. Energy Information Administration, Weekly Petroleum Status Report

Recent declines in demand for petroleum products have led commercial crude oil inventories in the United States to reach an all-time high of 541 million barrels as of the week ending June 19, which is 5 million barrels more than the previous record set in late March 2017, according to data in the U.S. Energy Information Administration’s (EIA) Weekly Petroleum Status Report.

weekly total U.S. crude oil inventories

Source: U.S. Energy Information Administration, Weekly Petroleum Status Report

Commercial crude oil inventories do not include crude oil held in the U.S. Strategic Petroleum Reserve, which totaled 654 million barrels as of June 19. Total commercial crude oil inventories include volumes held at refineries and tank farms, as well as some amount of pipeline fill (crude oil held in pipelines) and stocks in transit by water and rail. When estimating storage capacity utilization, EIA removes the pipeline fill and stocks in transit so that utilization reflects the stocks held at refineries and tank farms as a percentage of working storage capacity.

weekly U.S. net crude oil inventories

Source: U.S. Energy Information Administration, Weekly Petroleum Status Report

To help stakeholders better assess crude oil storage and capacity, EIA provides weekly estimates of U.S. and regional crude oil storage capacity utilization in the Weekly Petroleum Status Report (WPSR). EIA’s most recent Working and Net Available Shell Storage Capacity Report was released on May 29, 2020, with data as of March 31, 2020. In this update, net available shell storage capacity in the United States increased by nearly 19 million barrels from the previous estimate as of the end of September 2019. An increase in Gulf Coast storage capacity offset relatively small changes in other regions.

As of June 19, U.S. net commercial crude oil inventories were at 62% of total available storage capacity. The majority of capacity and inventories are located in the Gulf Coast, a region which is also home to the majority of U.S. refining capacity and a key area for exporting crude oil. Total commercial Gulf Coast crude oil inventories have increased by 64 million barrels since March 13, when a national emergency was declared in the United States, and are now at an all-time record of 308 million barrels.

Crude oil storage capacity utilization in Cushing, Oklahoma, had increased to 83% of capacity as of the week ending May 1, but it declined to 58% on June 19. Storage considerations were among the reasons that West Texas Intermediate (WTI) crude oil prices—which are based on physical delivery of WTI crude oil at Cushing, Oklahoma—briefly dropped below zero on April 20 and April 21.

June, 30 2020
Changing Investment Winds In The Middle East

The sale of a mere 5% stake in the oil world’s crown jewel, Saudi Aramco had captured the attention of the entire investment community last year. Pushing through after years of debate and delays, the sale on the Tadawul stock exchange valued Aramco at a whopping initial US$1.6 trillion. Investors were mainly connected Saudi individuals and wealthy families, with international buy-in limited as a planned parallel listing on the London or New York Stock Exchange fell through. Still, the deal was enough to unleash several thousand pages of speculation and opinion over potential liberalisation of the oil and gas complex in the Middle East, especially the upcoming post-oil and carbon-neutral environment.

Aramco may have captured all the main headlines, especially with its huge acquisition of fellow Saudi jewel SABIC but the true entity pushing the boundaries of privatisation and deregulation in the Middle East is elsewhere. Specifically, just east of Saudi Arabia, in Abu Dhabi – the largest and most influential of the seven emirates that make up the UAE.

The latest headline involving ADNOC, Abu Dhabi’s state oil firm, hasn’t really made the rounds beyond the industry’s eyes but it is crucial to understanding how the Middle East oil sector could adapt to the changing industry over the next few decades. Partnering with a consortium of six investors, ADNOC has sold a 49% stake in its ADNOC Gas Pipeline Assets subsidiary, retaining a 51% majority stake and control. The sale had been bandied around for over a year, seen as a sign of a gradual opening of a tightly controlled oil and gas region, and follows three other significant sales involving ADNOC. The first was in 2017, when ADNOC raised nearly a billion US dollars through an IPO of its fuels distribution unit on the Abu Dhabi Securities Exchange, offering up 10% of its shares. Then late 2019, ADNOC partnered with Italy’s Eni and Austria’s OMV to nearly double oil refining capacity in Abu Dhabi to 1.5 mmb/d – the largest foreign participation in the Middle East downstream industry since the Shell Pearl GTL project in Qatar and Total’s Jubail refining and petrochemicals push over a decade ago. Around the same time, ADNOC also pocketed US$4 billion from US investment giants BlackRock and KKR through the sale of a 40% stake in its ADNOC Oil Pipelines subsidiary. And now it is the turn of ADNOC’s gas pipelines.

The chronology and regional aspect of ADNOC’s moves is interesting. While Aramco looks local, Abu Dhabi went abroad. The refining expansion involved established oil market players, Eni and OMV – and parallels a gradual unbundling of Abu Dhabi’s upstream concessions, where stakes have been offered to Total, PetroChina, Eni, Cepsa and India’s ONGC over the past five years. But the choice of new investors are now not from the industry. After the deep-pocketed BlackRock and KKR, ADNOC has once against turned to institutional investors for its latest, and largest, sale, with the US$20.7 billion gas pipeline and infrastructure deal going to a consortium consisting of Global Infrastructure Partners (GIP), Brookfield Asset Management, Ontario Teacher’s Pension Plan Board, Singapore’s GIC sovereign wealth fund, NH Investment and Securities and Italy’s infrastructure operator SNAM. ADNOC called the deal a ‘landmark investment (that) signals continued strong interest in ADNOC’s low-risk, income-generating assets’. But it also illustrates two other points: institutional interest in strategic Middle East assets and the challenging environment within the industry because of Covid-19 that has led investment interest expanding to new capital that is currently reluctant to make risky bets in an unstable economic environment. So the choice of ADNOC’s safe assets and a captive domestic market is rather attractive.

ADNOC’s strategy differs from Aramco’s fundamentally. Where Aramco sold a stake of itself, ADNOC has parcelled out different parts of itself while keeping control of the main body intact. This is what Malaysia’s Petronas has done to a great degree of success, listing subsidiaries through IPOs and partnering with foreign investors on upstream/downstream projects, using the proceeds to finance a global expansion that now stretches across all continents. Replicating this strategy, as ADNOC looks to be doing, could pay dividends, particularly since ADNOC has a wider domestic base, as well as stronger export markets, than Petronas. Between Saudi Aramco and ADNOC, the OPEC duo seems to have kickstarted a liberalisation drive within the Middle East energy complex. Kuwait Petroleum and Bahrain’s BAPCO are already reported to be considering similar moves. Which model could this second wave follow: Aramco’s or ADNOC’s? Aramco’s is a shock-and-awe move, a potential wow factor at the size of any possible deal. But ADNOC’s more piecemeal approach could actually be far more stable and sustainable over time.

Market Outlook:

  • Crude price trading range: Brent – US$39-42/b, WTI – US$37-40/b
  • Signs that the oil demand recovery has been better-than-expected as economies re-open have been tempered by fears that a resurgence of Covid-19 infections is on the horizon
  • The US recorded its highest single-day case number this week, while Europe recorded its first increase in a month and cases in Latin America and India are accelerating, prompting fears that a second round of lockdowns was necessary
  • Economies will have more time to prepare for a second round of lockdowns, but the disruption will still snuff out any current nascent improvement in demand
  • This will weigh heavily on OPEC, as it now has to consider another extension beyond the end of July, although compliance has improved among the OPEC+ club as Iraq, Kazakhstan, Nigeria, Angola, Gabon and Brunei all submitted new output schedules

End of Article

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June, 26 2020