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Last Updated: February 22, 2018
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Market Watch

Headline crude prices for the week beginning 19 February 2017 – Brent: US$65/b; WTI: US$62/b

  • Crude prices enjoyed a series of gains last week, boosted by a return of confidence to equity markets and the dollar continuing to remain weak.
  • Signs that crude inventories in the key storage hub in Cushing, Oklahoma were being drawn away to coastal shipping terminals for export have been taken as a sign that increasing American production is being met by increasing demand for American production.
  • This has allowed the Brent-WTI spread to narrow to its smallest level in six months, as Cushing inventories shrank by some 3.64 million barrels and 2.5 million barrels over the last two weeks.
  • Analysis by OPEC and its NOPEC allies have concluded that the supply glut is dissipating faster than expected on strong demand, expecting a rebalancing in 2Q or 3Q18.
  • This lays the ground for OPEC to announce the phase out of the supply freeze deal at its upcoming June meeting in Vienna; more cooperation with the NOPEC block is expected, with UAE Energy Minister Suhail Al Mazrouei stating he hoped the alliance would ‘last forever’.
  • A continued alliance would be necessary, in case surging US shale production thwarts plans and causes a global pivot back to over-supply.  
  • Further output growth is expected; the US is on course to hit 11 mmb/d production levels faster than expected this year, while major firms noted in their financial statements that global oil demand could reach 100 million barrels this year.
  • The latest US budget deal also includes a little noticed tripling of carbon tax credit for carbon dioxide re-injection to increase crude output, which could accelerate shale production. The tax credit has been permanently increased to US$35/ton of carbon dioxide, up from US$10/ton.
  • The US active oil and gas rig count was unchanged last week, as 7 new oil rig additions was offset by the loss of 7 gas rigs.   
  • Crude price outlook: Crude prices are set for a steady week, with Brent staying in the US$64-65/b range, while WTI settles within the US$61-62/b range.

Headlines of the week

Upstream

  • A standoff occurred in the eastern Mediterranean as the Turkish military allegedly blocked a drillship headed for an Eni wildcat in Cypriot waters; Turkey does not maintain diplomatic relationships with Cyprus and claims some of its waters, adding complexity in the rush to explore there.
  • The US is set to launch its largest offshore auction in history on March 21, offering some 77.3 million acres in the Gulf of Mexico, hoping that interest will perk up after a similar sale last year attracted little attention.
  • In the diplomatic quagmire that is the South China Sea, the Philippines and China have agreed to set up a special panel to address cooperation to jointly exploit oil and gas resources in the area.
  • Bolstered by the discovery of the giant Zohr field, Egypt is turning its sights to the Gulf of Suez, partnering with Schlumberger to launch a seismic survey in the area to gauge hydrocarbon potential.
  • Ahead of next month’s crude oil futures contract launch on the Shanghai International Energy Exchange, the bourse has approved the use of six bonded storage warehouses across eight sites in China.

Downstream

  • In a surprise move, President Donald Trump indicated that he would support a US$0.25/gallon increase federal gasoline and diesel taxes to pay for infrastructure upgrades, the first increase in the tax since 1993.
  • A fire broke out at the Isla refinery in Curacao, halting production at the catalytic cracker, complicating the situation as the island chooses between extending its deal with PDVSA or go with new Chinese investors.

Natural Gas/LNG

  • Even as Egypt makes steps to becoming natural gas self-sufficient, Israel has agreed to supply some 64 bcm of gas from the Tamar and Leviathan fields to Egypt’s Dolphinus Holdings to create greater energy security.
  • Woodside has bought ExxonMobil’s 50% stake in Australia’s Scarborough field for US$744 million, and aims to raise some US$1.96 billion to develop the remote location that could fuel expansion at Pluto LNG.
  • Just as Eni speeds ahead with plans for Zohr, BP has begun gas production at Egypt’s Atoll Phase One, producing some 350 mcf of gas and 10,000 barrels of condensate seven months ahead of schedule.
  • BP has also moved closer to developing the Tortue gas field in West Africa with Kosmos Energy, after Mauritania and Senegal agreed to a production split deal to govern output from the cross-border field, expected in 2021.
  • LNG exports from Peru’s Pampa Melchorita facility have resumed after a pipeline rupture suspended supplies from the onshore Camisea fields.
  • Kogas is seeking arbitration to amend its LNG contract with the NW Shelf Australian venture, a bold move that could encourage other Asian buyers.

Corporate

  • Saudi Aramco’s impending IPO has attracted the attention of Russian banks and a joint Russia-China investment fund in a move that could deepen ties between the two giant oil producers.

Petronas CEO Wan Zulkiflee Wan Ariffin has had his contract renewed for a second 3-year term, underscoring his success in leading the firm.

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Latest NrgBuzz

How to Write a Cover Letter for an Oil & Gas Job?

Landing a good oil and gas job requires standing out from the competition of oil and gas industry professionals. The primary aspects that help you win a new role are your CV, a good cover letter, and then your interview skills. A cover letter can help explain your reasons for applying to a role and why you are perfect for the position; however it is often neglected compared to other parts of the application process and given less attention.

A cover letter is generally the first thing to make you stand out when applying for a job, and they are hard to write as there is no specific template that can be used for all situations. We have however put together some helpful guidance which should get you started. The primary reason for a cover letter is to highlight points from your CV, show that you are seriously interested in the job, and prove that you have the competence for the position.

Cover letters should always be unique to the position you are applying for, and it is important to perform some research into the company to prove you are the right person to work there. Showing that you understand not only the job requirements but also that you understand a company and how you will help them in the future will help progress you to the interview stage.

Technical oil and gas jobs require specific experience relating to software, geographical knowledge or previous project experience. This might already be on your CV but re-stating that you have this information in your cover letter will increase the chance that you are viewed as a viable candidate. It is worth finding out what type of project you will be working on and highlighting similar ones from past experience. Listing 17 years’ of experience in gas processing when you want a role on a heavy oil project is pointless, just focus on areas where your skills directly translate to the position you are applying for.

As with all things related to oil and gas job applications, keep it short – employers don’t have time to read pages of information. The purpose is to get a potential employer to take an interest in you, show them why you can do the job, and prove that you fit with the company. All this should be covered in less than 400 words (the length of this article).

August, 20 2018
Gig Job: The Future of Oil & Gas Industry?

‘Nine to five plus a single employer’ is no longer an equation that the current workforce operates on. This traditional marketplace has been disrupted with the advent of new technology that has heralded gig or on-demand economy. Players like Uber, Airbnb, & Deliveroo offer a classic example of how these innovators have leveraged on this concept of gig economy and have shaken up the traditional setup. Millions of people today, prefer flexible work timings, multiple employers, interest-based projects and multiple revenue streams, the working style we commonly refer to as gig economy.

CIPD describes the gig economy as a new way of working that is based on the temporary jobs or projects, which is paid on the project or hourly basis. It is also referred to as the ‘sharing economy’ or ‘collaborative economy’

The gig economy: pros and cons in the context of the Oil & Gas Industry        

The Oil and Gas industry is considered traditional when it comes to adapting to new technology or concepts. However, the notion is changing now with 30% of its workforce comprising of gig workers and the trend is expected to rise in coming years. Instead of depending on the recruitment agencies, companies are now focussing on targeted industry digital platforms to search, shortlist, verify and hire the gig contractors or freelancers. However, like everything else, there are pros and cons of hiring freelancers or gig employees:

Pros:

Reduced Overhead cost

The cost of hiring an in-house employee is immense because apart from salary it also includes costs of insurance, perks, benefits, training, leaves, and cost associated with providing the facilities like internet, sitting arrangements, refreshments, canteen, electricity, and so on. All the extra cost apart from salary gets waived off when it comes to hiring gig employees or also known as “freelancers” in the market. Thus reducing the huge chunk of overhead cost for the employing company.

Low Financial Risk

 In the case of full-time employees, the company needs to pay even during “down-times” when the work is low, or the productivity standards are not met. However, in the case of temporary staff or freelancers, the company only pays for the work accomplished as per the specified standard. Thereby lowering the financial risk.

Bigger and better pool of talent

The energy sector is a highly specialized sector and hence requires employees with a specific skill set. Specially for an on-site project, location is the biggest constraint. What if you do not find the right talent at your location? Then you are left with two options: either to hire a new employee and provide training or offload and distribute the work to the current employees. Both this scenario is risky. That’s when the gig employees are a real life-saver. The boundaries are no barrier, you can gain access to any person sitting in any part of the world. You do not even have to compromise on the skills and invest in training.

Innovation and knowledge-sharing

The company spends a substantial amount on strategizing and talent development. However, when you opt for a freelancer, you gain access to knowledge that the employee brings in by working with other organizations. So, in the oil and gas sector, a new employee can bring an innovation in the process or methodology by his experience and observation with different clients.

Round the clock functioning

Sometimes, the gig employee operates from different time zone which means that you can get your work running even while you have closed down at your part of the world. Additionally, you can reach out to freelancers for revisions, urgent works, even after the fixed working hours and during weekends, which is a great relief during tight-deadline projects.

Cons

Lack of supervision and discipline

Most gig workers operate remotely, and you cannot monitor their work physically which means that you can never be sure whether the hourly rates that the employee billed you for, is actually spent on work or for leisure. However, now there are numerous monitoring sites like Hubstaff that tracks the productivity level of the employee. Also, working in oil and gas sector involves potential hazards that can lead to serious injuries and even death. In case of remote workers, managing and monitoring all safety measures pertaining to explosions and fires, equipment safety, machine hazards and so on is a daunting task.

Unpredictable work 

Until you gain mutual trust, there is a lot at the stake. For example: if you hire a temporary staff or freelancer to work on a project, you cannot be certain if the person will be able to deliver his/her duties. The risk of losing time, money, and energy is high. If all turns well, you can enjoy the perks however if it didn’t go your way then you suffer a loss on multiple levels. To avoid this scenario, it is advisable to ask for previous work references and keep reviewing the work periodically so that you are aware of the direction things are shaping in.

Loyalty and company ethics 

Because, each company has its own set of principles and working guidelines which forms the culture of the company, it is challenging for the freelancer to operate as per the company’s code of conduct or policies. Furthermore, they work for multiple clients at a time, their loyalty may be questionable.

Training and development issue

Every company works and operates differently though key process remains the same. The complete onboarding of the remote worker is not possible as in the case of a full-time employee where the company’s working style becomes their second nature. Additionally, the effort to organize a training program for the gig worker is tricky because of the location and time bound issues.

Thus, for a dynamic industry like oil and gas, gig employees can be an asset if they can bring in the required expertise, skill set and attitude to outperform your expectation. You can find the right talent by using dedicated oil & gas professional networking platforms that bring talents and employers together. Use it to your advantage and you are good to go.

August, 18 2018
Oil and Gas Salary In Malaysia: What to Expect?

Malaysia has the fourth largest oil and gas reserve in Southeast Asia and produces a whopping 30,000 megawatts of energy per year. The country continues to be hopeful about the prospects of its oil & gas industry and expects it to contribute meaningfully towards the growth of its economy. But then again, what does it mean for the employees who are working in the industry or plan to enter it? Is it a profitable industry in terms of salary growth and expectations? Let’s figure out what the industry holds for its employees and job seekers of oil and gas jobs in Malaysia.

What does the number say?

The best way to analyze the oil and gas job sector is to look at the recent studies and research conducted, which can give a substantial view into the future of the industry. As per the statistics department, Malaysia saw 8.1% growth in the salary in 2017 amounting to RM 2880 as compared to 2016, in which the average salary recorded was RM 2657. Additionally, the chief statistician of the department, Datuk Seri Dr Mohd Uzir Mahidin, said that an increase in the mean monthly salary and also the wages are in sync with the country’s economic performance. Even the exports indicated to grow by 20.3% which amounts to RM935.5bil. He made these observations based on the results of Salaries and Wages Survey 2017 of oil and gas professionals and entry-level oil and gas job seekers.

What the number means for prospects of oil and gas salary in Malaysia

If the above data is viewed on a sectoral basis, then the mining and quarrying sector indicated the highest monthly salaries as well as wages, which amounted to a mean of RM5,709 and a median of RM3,700.

Datuk Seri Dr Mohd Uzir Mahidin, further added that capital-intensive industries like the oil and gas, which is a major part of mining and quarrying sector, employs professionals, who are highly skilled and hence a bigger paycheck and higher mean and median salary.

The observation made by the chief statistician gets further backing by an online job site’s employment index. Although, it shows a decrease of 11% in May 2018 for the hiring activities in comparison to the previous year. However, it pointed towards a steep growth in the Oil & Gas sector. The hiring activity went up by 14% year-on-year in May 2018.

What can be the salary expectations for energy professionals?

The above studies and research indicate a positive outlook for both upstream and downstream players of this sector. However, it is important to note that a lot of factors help to determine your salary potential, which includes: education, years of experience, expertise, work ethics, job location, skill set and so on.

As per payscale.com, a Petroleum Engineer can earn on an average RM 104,343 per year. Which means an average salary of RM 99,803 with an estimated average bonus of RM 22,500 and profit sharing of RM 5120. Your experience and education play a major role in determining your salary. Similarly, in oil and gas industry, the average salary of a mechanical engineer amounts to RM 72,000 whereas the average salary of Account is RM 82,248 and for Project Engineer is RM 57,000 while a sales manager has the potential of RM 120,000.

Since the industry prefers professionals with high-level skills in the respective areas, it is advisable to enhance your overall employability factors to enjoy higher compensation and perks. And also use oil and gas professional networks to your advantage in getting the desired contacts and opportunities.

August, 17 2018