NrgEdge Editor

Sharing content and articles for users
Last Updated: January 31, 2018
1 view
Business Trends
image

NrgEdge interviews Dr Mazlan Madon who is an independent geologist. He is also involve as a member of Commission on the Limits of the Continental Shelf and Academy of Sciences Malaysia. A passionate geologist with vast experience, Dr Mazlan Madon is considered among the top Geology experts.


uploads1517366164957-Dr+Mazlan+Madon+Nrgtalk+edited.jpg


1) You are someone who has taken up many geologist position with Petronas over the years. Are you able to share with us what kept your passion burning in order for you to be in the industry for more than 30 years?

I consider the many positions that I was appointed to during my service with Petronas were merely following the “natural” course of a career progression, starting as a trainee geologist in 1984 to the penultimate technical position of “Custodian” in 2007. Since then I had held various Custodian positions within different parts of the organisation, doing slightly different things but essentially the same role. Whether one considers a span of 23 years to reach the “top” to be slow, ‘average’, or fast, is a different question altogether. I think, for me to have stayed in the same industry for more than 30 years is not unusual, especially in the oil/gas industry. A more interesting question that people often asked is what kept me going for so long in the same company. The simple answer is my passion for geology. It is fair to say that I care more about geology as a science than its application to oil/gas exploration, because in a way, passion for the science is more everlasting than one’s love for exploration (which tend to emulate the oil price).

2) During your years with Petronas, you wrote a book titled “Petroleum Geology and Resources of Malaysia” which was the main source of reference for the petroleum geologist within the region. What was the factor that inspired or influenced you to write this book? 

To be clear, the book was a team effort, and was a deliberate initiative by the management of Petronas at the time, to share the knowledge gained through decades of oil exploration in the country, with not just the oil industry people but the public at large. So a team was assembled and headed by a project manager/chief editor, and I was lucky to be called in by my boss to work full-time on it, along with two other people. It was 1996, and I had just re-joined the company after finishing my PhD studies and I think the momentum helped, because there was an enormous amount of documents I had to go through in order to provide a balanced view of the geology of each basin or province in Malaysia, based on the knowledge at that time. I was also fully aware that as an author I also represent, in some way, a Petronas ‘view’ of the geological understanding at that time.

3) As we know, you are a member of the Commission on the Limits of the Continental Shelf (CLCS), a body of experts established under the UN Convention on the Law of the Sea (UNCLOS). Are you able to tell us more on this position?

The CLCS consists of 21 members elected every 5 years from among the nationals of countries (coastal State) that ratify the UNCLOS. So, I was nominated by the Malaysian government to serve in that commission, but I serve in my personal capacity. Members of CLCS are experts in either hydrography, geology or geophysics. Under article 76 of UNCLOS, a coastal State may submit to the CLCS particulars relating to the limits of the continental shelf beyond 200 nautical miles. The main role of the CLCS then is to consider the data and information submitted by the coastal State in the justification to extend its continental shelf beyond 200 nautical miles.

4) The world is constantly evolving, and new technologies have been given birth in the recent years. What are the most impactful technologies you feel that had greatly aid geologists or explorers like yourself in terms of new field research and development?

There is no doubt that as far as the oil exploration/development is concerned, seismic technologies have contributed immensely to the success of the business. On the flip side, it could be argued that because seismic has been so successful as a body of technology, some managers became over-reliant on it while inadvertently neglecting the fact that a brilliant technology still requires competent humans to use it. Besides seismic, an overarching factor in the industries’ success is the rapid development of computers. I still remember using floppy disks on DOS-based PCs when I started in 1984 and when the internet was still at a very rudimentary stage. Look where we are now due to the power of computers.

5) With fewer oil companies investing in exploring new oil fields in the current oil price climate, do you think this is a short-sighted move? Also how do you see the market picking-up again in terms of new exploration projects in this region?

I think it is just a normal business practice to cut back on exploration when the oil price is low, but how high exploration is going to bounce back depends on our appetite for new ideas and new plays. Bear in mind, activity was already at a low level in the traditionally mature regions, not because of the oil price but due to the higher risks and unfavourable economics.

6) In the current low oil price climate, a lot of exploration projects have been put on-hold. This has inadvertent lowered the demand for new geology talents. What are the options available for those who are specialised in this discipline? Are their skills transferrable?

It is not entirely true, or wise to assume, that due to less exploration projects, there is lower demand for “new geology talents”. I would say, less exploration projects may see less need for that many operations geologists but the company would need to do more “research” to prepare for the next wave. In any case, new talents would not be put straight onto exploration projects because there is a lag time between a new talent coming in and when he/she is ready to be deployed to the projects.

7) In today’s world, everything is going digital, even learning. Digital learning for geologists in Oil & Gas is now possible with e-courses, live webinars and even virtual field trips! Do you think geologist today are adapting to these new platform effectively? What do you think are the possible barriers preventing these new learning technologies from flourishing further, if they are indeed effective learning methods?

I am not worried about young people adapting to new platform. But I am not sure that they are able to absorb all the knowledge that is made available to them, in a way that will make them more productive in their work, bearing in mind their already busy day-to-day work schedule. My guess is that most people will have some spare time for one or two ‘extra-curricular’ endeavours outside of their ‘normal’ work. If those courses are remotely relevant to their work, it would not be an effective learning tool.

8) As we know, you came out with publications throughout your career. For now, you have retired, hence, will you continue publishing geology related publications to aid/educate other geology enthusiast?

Unlike a manager who loses his power and privileges upon retirement, a scientist never truly retires. When I retired, they took away my company laptop, but I could still write. I consider writing technical articles as one of the two most important tasks for a scientist. The other one is reading. Writing is the best way to articulate one’s thoughts and understanding of a particular subject in the vast field of geoscience. It is erroneous to think that a geologist who happens to work in oil and gas must write only on petroleum geology. A musician does not have to just play the blues. So, yes I will do my best to continue to write and publish articles of interest.

9) As an industry expert, you have had considerable experience as a geologist/geoscientist. For someone who’s just beginning their career in the industry, what advice can you give him or her? Do you feel that youths today have more opportunities to nurture their passion and what life lessons are you able to share with them?

I don’t consider myself an industry expert, but a geology or geosciences expert, maybe. So my only advice would be: to be honest in what you do, seek knowledge as truth, not half-truths, and not because your boss wants to hear it, but because you need to understand it yourself. Yes, young people are given ample opportunities, but they take too much time to decide what part of geoscience they like, before they can move forward in their career. Geoscience is a vast subject, with many inter-related sub-disciplines and topics. The problem in the way our industry has developed is to steer young people to want to do a very small part of geoscience, without wanting to or make it necessary to have a broader knowledge of the science. The result is a so-called ‘specialist’ but ironically with very little depth in understanding and lacking a broader appreciation of the scientific implications.

10) May I know what was the book you wrote that gained recognition? Are you able to elaborate more about this recognition and book? Do you think that the new generation can contribute in future?

It was not a book I wrote. In 2017, the AAPG, as part of its 100th year celebration, wanted to publish a book, “The Heritage of the Petroleum Geologist” which is a sequel to its 2002 publication of the same name, which had honoured 43 “pioneering and notable geologists” for their contribution to the profession.  So, what AAPG did was to invite another 58 “accomplished and distinguished” geologists to make the total number of honourees 101, symbolic of 100 for the centennial celebrations plus 1 additional individual “to symbolize the passing of our deep heritage to the next generation of energy-finders”. Like all the other honorees, I was asked to contribute two pages of my “achievements, disappointments, anecdotes, advice” for the next generation, and was lucky to be chosen as one of the 101 honorees at the AAPG Convention 2017 in Houston last April.

Of course, the new (meaning younger) generation can contribute, but they must do it with sincerity, honesty and passion. I was once young too, and came into geology by chance, like many geologists I know. In order to make meaningful contribution, people often say, we must be “passionate” about our work. The word “passionate” has been used a lot by managers during my time when they were trying to motivate the youngsters. But passion takes time to develop, and you cannot fake it. You have to first “like” what you’re doing, before you can be “passionate” about it. When you are young, you wouldn’t know where the career would take you, until you are really deep into the subject and develop a kind of “passion”. You cannot be passionate if you don’t know enough about the subject or the work that you’re doing.
By “contribution”, I take that you mean contribution to geology, as a science and as a profession. The new generation can contribute to the science of geology by learning as much as they could, mainly by themselves, through reading and writing. After all, scientific knowledge grows from the ideas generated and written by scientists for people to read. Knowledge not shared is not knowledge. Attending conferences, making presentations, and writing technical papers are all part of the contribution to scientific knowledge but not all of it. For the geological profession, the new generation should join a scientific organization or geological society where they can interact with their peers as well as with other scientists and even students to share experiences and learn from them. These can be done in many ways, from organizing seminars, workshops, field trips to formal training sessions. Nowadays, there seem to be a lack of interest in joining scientific societies, like the Geological Society, for geologists, when especially in the petroleum industry wherein the perception is that all the knowledge and training are available within the industry or company and so joining a scientific society does not bring any benefit. I think this perception and attitude need to change. Contribution to geology and to the geological profession is not, and should not be, limited to making money for the oil companies, but also for the benefit of society at large.


11) With your intention to do a forum discussion, how will you work with us in terms of moderating those discussion at our NrgGuru section?

As I understand it, NrgGuru is a platform for users to ask questions relating to the oil and gas industry. In that regard, I will try to answer mainly questions that relate to my own knowledge and experiences, and leave other questions for other experts.


Sign up on NrgEdge to read more articles like these and get connected with oil, gas and energy industry influencers! 

Visit: https://goo.gl/a36LfT

nrgedge oil and gas interview influencer nrgtalk business
3
7 0

Something interesting to share?
Join NrgEdge and create your own NrgBuzz today

Latest NrgBuzz

Natural gas inventories surpass five-year average for the first time in two years

Working natural gas inventories in the Lower 48 states totaled 3,519 billion cubic feet (Bcf) for the week ending October 11, 2019, according to the U.S. Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report (WNGSR). This is the first week that Lower 48 states’ working gas inventories have exceeded the previous five-year average since September 22, 2017. Weekly injections in three of the past four weeks each surpassed 100 Bcf, or about 27% more than typical injections for that time of year.

Working natural gas capacity at underground storage facilities helps market participants balance the supply and consumption of natural gas. Inventories in each of the five regions are based on varying commercial, risk management, and reliability goals.

When determining whether natural gas inventories are relatively high or low, EIA uses the average inventories for that same week in each of the previous five years. Relatively low inventories heading into winter months can put upward pressure on natural gas prices. Conversely, relatively high inventories can put downward pressure on natural gas prices.

This week’s inventory level ends a 106-week streak of lower-than-normal natural gas inventories. Natural gas inventories in the Lower 48 states entered the winter of 2017–18 lower than the previous average. Episodes of relatively cold temperatures in the winter of 2017–18—including a bomb cyclone—resulted in record withdrawals from storage, increasing the deficit to the five-year average.

In the subsequent refill season (typically April through October), sustained warmer-than-normal temperatures increased electricity demand for natural gas. Increased demand slowed natural gas storage injection activity through the summer and fall of 2018. By November 30, 2018, the deficit to the five-year average had grown to 725 Bcf. Inventories in that week were 20% lower than the previous five-year average for that time of year. Throughout the 2019 refill season, record levels of U.S. natural gas production led to relatively high injections of natural gas into storage and reduced the deficit to the previous five-year average.

The deficit was also decreased as last year’s low inventory levels are rolled into the previous five-year average. For this week in 2019, the preceding five-year average is about 124 Bcf lower than it was for the same week last year. Consequently, the gap has closed in part based on a lower five-year average.

Lower 48 natural gas inventories, difference to five-year average

Source: U.S. Energy Information Administration, Weekly Natural Gas Storage Report

The level of working natural gas inventories relative to the previous five-year average tends to be inversely correlated with natural gas prices. Front-month futures prices at the Henry Hub, the main price benchmark for natural gas in the United States, were as low as $1.67 per million British thermal units (MMBtu) in early 2016. At about that same time, natural gas inventories were 874 Bcf more than the previous five-year average.

By the winter of 2018–19, natural gas front-month futures prices reached their highest level in several years. Natural gas inventories fell to 725 Bcf less than the previous five-year average on November 30, 2018. In recent weeks, increasing the Lower 48 states’ natural gas storage levels have contributed to lower natural gas futures prices.

Lower 48 natural gas inventories and Henry Hub futures prices

Source: U.S. Energy Information Administration, Weekly Natural Gas Storage Report and front-month futures prices from New York Mercantile Exchange (NYMEX)

October, 21 2019
Your Weekly Update: 14 - 18 October 2019

Market Watch  

Headline crude prices for the week beginning 14 October 2019 – Brent: US$59/b; WTI: US$53/b

  • Crude oil prices remain stubbornly stuck in their range, despite several key issues that could potentially move the market occurring over the week
  • The sudden thawing of the icy trade relations between the US and China last week – announcing a partial trade deal where new tariffs would be halted – was a positive for the waning health of the global economy; this, however, failed to send prices any higher as previous optimism has always been dashed
  • The trade spat has already caused fears of an economic recession and tumbling global oil demand, with the IEA projecting yet another drop in the demand that has neutralised another possible ‘geopolitical premium’ on prices
  • That geopolitical premium focuses on the fragile situation in the Middle East, with risk spiking up as Iran announced that one of its tankers in the Red Sea – far away from the Persian Gulf - had been struck by missiles; an initial accusation that Saudi Arabia was behind the attack was later withdrawn
  • Meanwhile, news emerged that Nigeria had been quietly handed an increased quota under the OPEC+ supply deal, from 1.685 mmb/d to 1.774 mmb/d, in July, which would help it meet compliance under the deal
  • After more than two months of continuous declines, the US active rig count increased for the first time, but not by much; two oil rigs were added, offset by the loss of a gas rig, but a net gain of 1 to a total of 856
  • We expect prices to remain entrenched as it displays resilience against political and economic factors, with Brent hovering in the US$58-60/b area and WTI at the US$52-54/b range


Headlines of the week

Upstream

  • The US Department of the Interior will be opening up 722,000 acres of federal land along California’s central coast near Fresno, San Benito and Monterey for oil and gas leasing – the first sale in the state since 2013
  • Alongside the lease sale in California, the US will also be opening up some 78 million acres in Gulf of Mexico federal waters for sale in 2020, covering all available unleased areas not subject to Congressional moratorium
  • Santos has confirmed oil flows at the Dorado-3 well in the Bedout Basin offshore Western Australia, with some 11,1000 b/d in place
  • After having exited Norway, ExxonMobil is now reportedly looking into selling its Malaysian offshore upstream assets as part of its divestiture programme, fetching up to US$3 billion for assets including the Tapis Blend operations
  • Equinor has won a new exploration permit – WA-542-P – in the offshore Western Australia Northern Carnarvon Basin, located new the Dorado well
  • Nigeria is looking to settle a US$62 billion income-sharing dispute with international oil firms such as ExxonMobil, Shell, Chevron, Total and Eni operating in the country, with hopes of reaching a settlement
  • Barbados is looking to emulate its nearby neighbour Guyana as it gears up for its third offshore bid round that will launch in early 2020
  • Petroecuador has been forced to declare force majeure on its crude exports, as widespread protests over the removal of fuel subsidies have led to the shutdown of some oilfields
  • Abu Dhabi is looking to create a new benchmark price for Middle Eastern crude based on its Murban grade that could compete with Brent and WTI

Midstream/Downstream

  • Aruba has ended its contract with Citgo – PDVSA’s US refining arm – to operate its 209,000 b/d refinery that is currently idled; a new operator is being sought, paralleling the situation over Curacao’s Isla refinery and PDVSA
  • Poland’s crude pipeline operator expects to only be able to clear its system of contaminated Russian oil from the Druzhba incident by July 2020
  • Gunvor’s Rotterdam refinery will only be able to produce low sulfur fuel oil by March 2020, part of a larger planned overhaul of the 88,000 b/d site

Natural Gas/LNG

  • After Total’s departure, it is now the turn of CNPC to quit the South Pars Phase 11 project in Iran, leaving Iran to go ahead alone its largest natural gas project ever as the threat of US sanctions bites down
  • CNPC has taken over operation of the Chuandongbei sour gas field in China’s Sichuan basin from Chevron, and will kick of Phase 2 development soon
  • Qatar has invited ExxonMobil, Shell, Total, ConocoPhillips and some other ‘big players’ to assist in the North Field expansion that will underpin its ambitions to boost gas output to 110 million tpa from a current 77 million tpa
  • The FID on the Rovuma LNG project in Mozambique has been pushed back by a year, with first production now expected by 2025 at the earliest
  • Pakistan has cancelled a ‘huge’ 10-year tender covering 240 LNG cargoes to its second LNG terminal, turning instead to spot cargoes due to inadequate demand
  • Inpex has formally received a 35-year extension for the PSC covering the Abadi LNG project in Indonesia, extending its operation of the Masela block to 2055
October, 18 2019
Ecuador Exits OPEC

Amid ongoing political unrest, Ecuador has chosen to withdraw from OPEC in January 2020. Citing a need to boost oil revenues by being ‘honest about its ability to endure further cuts’, Ecuador is prioritising crude production and welcoming new oil investment (free from production constraints) as President Lenin Moreno pursues more market-friendly economic policies. But his decisions have caused unrest; the removal of fuel subsidies – which effectively double domestic fuel prices – have triggered an ongoing widespread protests after 40 years of low prices. To balance its fiscal books, Ecuador’s priorities have changed.

The departure is symbolic. Ecuador’s production amounts to some 540,000 b/d of crude oil. It has historically exceeded its allocated quota within the wider OPEC supply deal, but given its smaller volumes, does not have a major impact on OPEC’s total output. The divorce is also not acrimonious, with Ecuador promising to continue supporting OPEC’s efforts to stabilise the oil market where it can. 

This isn’t the first time, or the last time, that a country will quit OPEC. Ecuador itself has already done so once, withdrawing in December 1992. Back then, Quito cited fiscal problems, balking at the high membership fee – US$2 million per year – and that it needed to prioritise increasing production over output discipline. Ecuador rejoined in October 2007. Similar circumstances over supply constraints also prompted Gabon to withdraw in January 1995, returning only in July 2016. The likelihood of Ecuador returning is high, given this history, but there are also two OPEC members that have departed seemingly permanently.

The first is Indonesia, which exited OPEC in 2008 after 46 years of membership. Chronic mismanagement of its upstream resources had led Indonesia to become a net importer of crude oil since the early 2000s and therefore unable to meet its production quota. Indonesia did rejoin OPEC briefly in January 2016 after managing to (slightly) improve its crude balance, but was forced to withdraw once again in December 2016 when OPEC began requesting more comprehensive production cuts to stabilise prices. But while Indonesia may return, Qatar is likely gone permanently. Officially, Qatar exited OPEC in January 2019 after 48 years of continuous membership to focus on natural gas production, which dwarfs its crude output. Unofficially, geopolitical tensions between Qatar and Saudi Arabia – which has resulted in an ongoing blockade and boycott – contributed to the split.

The exit of Ecuador will not make much material difference to OPEC’s current goal of controlling supply to stabilise prices. With Saudi production back at full capacity – and showing the willingness to turn its taps on or off to control the market – gains in Ecuador’s crude production can be offset elsewhere. What matters is optics. The exit leaves the impression that OPEC’s power is weakening, limiting its ability to influence the market by controlling supply. There are also ongoing tensions brewing within OPEC, specifically between Iran and Saudi Arabia. The continued implosion of the Venezuelan economy is also an issue. OPEC will survive the exit of Ecuador; but if Iran or Venezuela choose to go, then it will face a full-blown existential crisis. 

Current OPEC membership:

  • Middle East: Iran, Iraq, Kuwait, Saudi Arabia, UAE
  • Africa: Algeria, Angola, Equatorial Guinea, Gabon, Libya, Nigeria, Republic of Congo
  • Latin America: Venezuela
  • Total: 13
  • Withdrawing: Ecuador (January 2020)
  • Membership under consideration: Sudan (October 2015)
October, 18 2019