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Last Updated: March 8, 2018
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Market Watch

Headline crude prices for the week beginning 5 March 2017 – Brent: US$65/b; WTI: US$62/b

  • Crude oil prices began the week on a stronger note, bouncing back from market jitters of American plans to impose steep tariffs on steel and aluminium imports to trade on indications that US crude inventories continue to fall.
  • Tanks at the important storage hub in Cushing, Oklahoma are at their lowest levels since 2014, as a booming American economy and backwardisation structure in futures trading encouraging drawdowns.
  • However, despite the fall in Cushing, overall US crude stockpiles rose more than expected – up by a preliminary estimate of 5.66 million barrels - providing some drag to the market.
  • The US is expected to become the world’s largest oil producer in 2019, overtaking Russia, with Saudi Arabia remaining the world’s largest exporter for the foreseeable future.
  • The upward march of American output remains the single largest drag on crude prices, and a key variable in determining direction, as the EIA confirmed that American production shattered a 47-year old output record last November, hitting 10.044 mmb/d.
  • OPEC commented that while it was committed to ensuring the market was rebalance by mid-2018, it warned that there was a risk of an ‘upcoming energy crisis’, sown by the current seeds of under-investment.
  • The US active oil rig count hit 800 for the first time in almost three years, gaining a single site. Along with 2 new gas rigs, the US rig count stands at 981 as of last Friday.
  • Crude price outlook: Crude prices should stay steady this week, with prices in the US$65-66/b range for Brent and US$62-63/b for WTI.

Headlines of the week

Upstream

  • The hits keep coming for ExxonMobil in Guyana, as it and partner Hess made a seventh major offshore discovery in two years in the Pacora-1 well. Development will be folded into the plans for the Payara field, which should bring Guyanese output up to a potential 500,000 bpd.
  • While Turkey squabbles with Cyprus over gas fields, Greece is hoping to make its own discoveries, sanctioning development of four blocks in the west of the country by Total, Italy’s Edison and Hellenic Petroleum.
  • Mexico will be hoping that the shale revolution can begin within its borders, as it offers up nine onshore areas in Tamaulipas state that will be awarded to private firms for the first time in September.
  • Thawing relations with China, The Philippines has identified two offshore sites – SC-57 and SC-72 at Reed Bank – which could be prototypes for proposed joint upstream activities with China.
  • Bolivia’s YPFB has reportedly signed an MoU with Dubai’s Kampac Oil and London’s Milner Capital to jointly invest US$2.5 billion to developing the Madre de Dios oil and gas basin in northern Bolivia.
  • Japan’s Inpex has been awarded a 10% interest in Abu Dhabi’s Lower Zakum concession for 40 years; separately, Inpex’s stake in the Satah and Umm al Dalkh concession has also been extended for 25 years.

Downstream

  • After years of delays, Vietnam’s second oil refinery in Nghi Son is ready for commercial startup in April, processing Kuwaiti crude. The country’s third refinery, in Long Son, also broke ground last week.
  • Total is aiming to build and operate a 150 kb/d greenfield refinery in Iraq, which would be linked to the Nassirya oilfield. Originally planned for 300 kb/d, PetroChina and Lukoil are also reportedly interested.
  • Poland’s plan to push for a merger of its two state oil refiners – PKN Orlen and Lotos – has met with intense political opposition once again.
  • Tullow Oil and its partners expects to finalise the construction of an export pipeline – linking the inland Amosing and Ngamia fields to the port of Lamu – by mid-2018, clearing the way for output to begin in 2022.

Natural Gas/LNG

  • While there has been no damage to ExxonMobil’s gas pipeline in Papua New Guinea after a 7.5 magnitude quake, it will take 8 weeks to repair and restore production at the PNG LNG plant, with ExxonMobil declaring force majeure on all exports as it continues to assess damage to gas fields.
  • Dominion Energy’s Cove Point export terminal in Maryland, USA has been cleared for commercial startup, shipping its first LNG cargo to Europe, becoming the second American LNG export facility to operate.
  • Timor Leste and Australia are on the verge of agreeing on a permanent maritime border at the Permanent Court of Arbitration, paving the way to develop the Greater Sunrise offshore gas field that had been shelved previously due to disputed oceanic borders. 
  • There may finally be some movement in the Philippines’ planned LNG import facility, as four potential investors – including Tokyo Gas and domestic power player First Gen – have reportedly expressed interest.
  • Japan’s Jera and Marubeni are reportedly teaming up with Australia’s Fortescue Metals to build a 2 mtpa LNG import terminal in New South Wales, which would help ease the east coast natural gas crunch.
  • India has begun to receive its first US LNG as Cheniere begins its 20-year contract with GAIL, supplying 3.5 mtpa of LNG per year.

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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