Oil prices were on a tear this week, riding a wave of strong supply-demand fundamentals and lingering geopolitical fears. All that the handful of OPEC and non-OPEC ministers gathering in the Saudi coastal city of Jeddah had to do was get out of the way, which they did
Front-month ICE Brent futures scaled a new 40-month peak to settle at $73.78 Thursday, while WTI had notched a high of $68.47 the previous day. Even the sour benchmark, Dubai, which trades at a discount to sweet crude, finished the week above the $70 psychological level, for the first time since 2014.
Shortly after oil bulls took cheer from the absence of any dovish signals from the six-member OPEC/non-OPEC Joint Ministerial Monitoring Committee meeting in Jeddah Friday, US President Donald Trump threw a wet blanket on them. “With record amounts of oil all over the place”, OPEC was keeping prices “artificially high”, he tweeted, adding that it “will not be accepted.”
Brent, which had briefly vaulted over $74/barrel after the JMMC, was back in the red compared with its Thursday’s settle. But it is hard to see what Trump could do to “not accept” the high prices (assuming he doesn’t agree with the free ride the US shale producers are getting due to the OPEC/non-OPEC cuts and hasn’t changed his mind about walking away from the Iran nuclear deal). US imposting tariffs on crude imports won’t serve the purpose and sanctions against 21 countries (Russia, Venezuela and Iran are already in that list) would probably have the opposite of the desired effect.
Irrespective of whether crude settles higher or lower on the day Friday, the Trump dampener is likely to be transitory, with fundamentals soon returning to the driver’s seat in oil. This week was relatively quiet on the geopolitical front, but all it needed was an across-the-board draw in US commercial oil stocks being reported for the previous week, for crude to resume its ascent.
Saudi Energy Minister Khalid al-Falih told the media in Jeddah that he believed OPEC and its allies should persist with their production cuts because OECD oil inventories are significantly above levels before 2014, when the world was hit by a wave of oversupply. Importantly, Russian Energy Minister Alexander Novak, also in Jeddah for the JMMC meeting, concurred with AlFalih’s assessment.
Any revision to the OPEC/non-OPEC producers’ current goal of draining the inventories to their five-year average is to be discussed at the June 22 ministerial meeting. Some ministers have suggested in recent months that the target be tightened to a seven-year average, which would mean continued production restraints to mop up more more barrels from storage.
The long-term Saudi-Russian collaboration, discussed between the respective ministers in Jeddah, is work in progress.
OPEC and its Saudi leadership have turned distinctly hawkish of late and the outcome of the Jeddah meeting should lay any doubts on that count to rest.
We now expect OPEC to move its inventory goalpost at the June meeting and telegraph that to the market in the intervening weeks. That sets the stage for rolling over the cuts beyond December. The only spanner in the works could be the May 12 US decision on Iran sanctions. If it produces a crude spike to $80 or beyond and appears set to crimp Iran supplies, OPEC will have to go back to the drawing board.
Something interesting to share?
Join NrgEdge and create your own NrgBuzz today
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).
‘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:
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.
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.
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.
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.