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Last Updated: March 1, 2018
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Market Watch

Headline crude prices for the week beginning 26 February 2017 – Brent: US$67/b; WTI: US$64/b

  • Crude prices chalked up a week of gains last week, gaining on positive signs in US demand and continued statements of support from OPEC to ‘manage global crude oil supply.’
  • Last week, US data showed a surprise drawdown of 1.6 million barrels in US crude inventories, with net imports dropping to a record low and exports surging. Stocks at the important Cushing, OK hub declined even further, defying market predictions that oil inventories were set to rise.
  • With US crude exports hitting 2 mmb/d, American net crude imports fell below 5 mmb/d, the lowest level since the EIA began recording data in 2001. Strong demand from US refineries supported the drawdown.
  • Various OPEC ministers voiced positive statements on the effectiveness of the supply freeze. Saudi Energy Minister Khalid al-Falih said the ‘market is rebalancing’ and ‘inventories should continue to decline’ over the year.
  • Al-Falih said Saudi Arabia’s exports have been averaging less than 7 mmb/d over January-March, with output well below its production cap. He also said OPEC and its allies were hoping to create a permanent framework to stabilise oil markets after the current agreement ends.
  • Algerian Energy Minister Mustapha Guitouni stated OPEC was looking to preserve ‘market stability’ to balance producers and consumers, suggesting that it could intervene again if prices fall dramatically.
  • American crude inventories are expected to reverse last week’s surprise decline, with data pointing to a million barrel gain, that capped gains in crude prices earlier this week.
  • The US active oil and gas rig count gained 3 sites last week. It was a fifth consecutive week of gains for oil rigs, inching up by 1 to 790, just shy of the 800 mark.
  • Crude price outlook: Lingering concerns over the swell of US crude output should trim crude prices back to US$65-66/b range for Brent and US$62-63/b for WTI.

Headlines of the week

Upstream

  • BHP Billiton and ExxonMobil, 50:50 partners in the Gippsland Basin Joint Venture, have dropped plans to sell their 13 fields, licences and associated infrastructure in some of Australia’s largest and oldest onshore oilfields.
  • Abu Dhabi has chosen Spain’s Cepsa to develop its offshore oil shores in a push to diversify partnerships; the Madrid-based player will take a 20% stake in the Umm Lulu and Sateh Al Razboot Persian Gulf fields.
  • India also gained a foothold in Abu Dhabi, with an ONGC-led consortium securing a 10% stake in the Lower Zakum concession for US$600 million.
  • Aker BP announced a moderate discovery in the North Sea’s Alvheim, with the Frosk well yielding ‘encouraging’ flows of 30-60 mmboe.
  • With turmoil in Iraq’s Kurdistan region dying down, Chevron has resumed drilling operations in the area, starting the Sarta 3 field.
  • South Korea’s SK Innovation has made an oil discovery in the PRMB 17/03 Block in China’s section of the South China Sea; SK Innovation has an 80% stake in the block, with CNOOC holding the remainder.
  • India’s ONGC has turn to international service firms for the first time, shortlisting Halliburton, Schlumberger and Baker Highs to assist in boosting production at its onshore Gujarat and Assam oil fields.
  • As Egypt prepares to offer ten new onshore blocks for exploration, Kuwait Energy announced it had struck oil in the South Kheir-1X well, with small flows of some 2,000 b/d of crude oil.

Downstream

  • Turkey’s first new oil refinery in 30 years, SOCAR’s US$6 billion 300 kb/d Star refinery, is scheduled to start up in the third quarter of 2018.
  • Amid US sanctions and Venezuela’s financial woes, PDVSA’s American arm Citgo Petroleum has slowed plans to upgrade its 235 kb/d refinery in Aruba. The Dutch territory has raised the issue with the US government.
  • Total, Borealis and NOVA Chemicals have formed a US Gulf Coast 50:50 petrochemicals joint venture, integrating the Bayport and Port Arthur facilities of Total and Novealis (a Borealis-NOVA joint venture).
  • ExxonMobil has acquired a 2.5% stake in the crucial Baku-Tblisi–Ceyhan (BTC) pipeline in Azerbaijan from Itochu’s subsidiary CIECO.

Natural Gas/LNG

  • ExxonMobil has halted operations at PNG LNG as a 7.5 magnitude earthquake struck the highlands Papua New Guinea; Oil Search also halted its drilling activities in the wake of the quake.
  • Petronas has inked its first LNG contract with India, agreeing to supply an undisclosed amount of LNG to Dubai-based H-Energy Mideast DMCC.
  • Spain’s Repsol will be selling its ‘non-strategic’ 20% stake in Gas Natural to CVC Capital Partners for €3.82 billion euros.
  • Thailand has pushed the new auctions for the Erawan and Bongkot gas fields back by a month to April, with a decision expected by end-2018.

Corporate

  • Extending a partnership that began with the Subsea Integration Alliance in 2015, Schlumberger and Subsea 7 have announced plans to form a 50:50 joint venture, which would boost their FEED capabilities.

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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