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Last Updated: September 6, 2018
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Market Watch

Headline crude prices for the week beginning 3 September 2018 – Brent: US$78/b; WTI: US$71/b

  • Worries over Tropical Storm Gordon landing over the Mississippi Gulf Coast combined with renewed unrest in Libya and perennial concerns over Venezuela and Iran pushed oil prices higher at the start of this week.
  • Failing to become a hurricane, Gordon brought lashings of rain but largely spared offshore and onshore upstream infrastructure, which could allow a quicker ramp up of facilities that had been shut down for precaution.
  • A tanker collision had partially shut down Venezuela’s main oil-shipping port Jose last week, affecting shipments and adding to the country’s struggles.
  • In Iran, oil exports for August fell to a 30-month low of 2.1 mmb/d as key Asian buyers avoided cargoes in the lead-up to new American sanctions; there is room for more declines but perhaps not too much, as PetroChina commented that its refining network would be adversely affected by more cuts.
  • Faced with the renewed sanctions, Iran is once again threatening to blockade the Strait of Hormuz, effectively halting a large portion of Middle Eastern crude exports if it is not allowed to use the Strait
  • Despite the dwindling of Iranian exports, improved Libyan production and better exports from Iraq’s southern fields lifted OPEC oil production up by 220,000 b/d to 32.79 mmb/d in August, the highest level this year.
  • American trade belligerence has now led CNPC – China’s largest natural gas supplier – to halt all purchases of spot LNG cargoes from the USA until the trade dispute is settled; LNG has not yet been corralled into tit-for-tat trade war but will inevitably be drawn in, if President Trump expands import duties to an additional US$200 billion of Chinese imports.
  • The US EIA confirms that American crude oil production rose to a new record of 10.674 mmb/d in June 2018, up 231,000 b/d or 2%, with the largest gains seen in Texas, where onshore output grew to 4.4 mmb/d.
  • With crude prices in ascendance again, the active rig count in the US gained for the first time in three weeks as drillers added 4 new rigs – 2 oil and 2 gas – bringing the total count to 1,048.
  • Crude price outlook: As Tropical Storm Gordon eases, crude prices should settle into their range. Unrest in Libya is a worry, but unless the situation escalates further, Brent should trade in US$76-78/b range and WTI easing back down to US$68/70/b.


Headlines of the week

Upstream

  • South Sudan has restarted production at the key Toma South field, idled since 2013 due to conflict; part of the Unity fields, an initial 20,000 b/d is being produced at Toma South and with the El Mar, El Toor, Manga and Unity fields expected to resume later this month, output could reach some 80,000 b/d.
  • Another hit for Eni in Egypt, as the Italian firm reports a new onshore gas discovery in Faramid South, East Obayed concession with some 25 mmscf/d.
  • In Alaska, Eni has acquired 124 exploration leases in the Eastern North Slope, a prime area with high potential just southeast of the giant Prudhoe Bay field.
  • Lundin Petroleum has raised its estimates for the Rolvsnes field in Norway’s North Sea from 3-16 mmboe to 14-78 mmboe, with FID targeted at 2020/21.
  • ExxonMobil has commenced drilling off Australia’s southeast gas in search of natural gas, which could help ease the growing gas supply gap in the east.
  • In search of the next Permian Basin, oil firms are now looking at Wyoming’s Powder River Basin, with some US$260 million in land deals already exchanging hands in an area where pipeline infrastructure is not congested.

Downstream

  • Chevron’s subsidiary Caltex Australia is looking to sell some of its fuel retail convenience assets for some A$2 billion, covering some 12-25% of existing freehold sites as its 1H18 profits came in at the low end of projections.
  • Even as the private Dangote refinery moves ahead, Nigeria’s NNPC is conducting a feasibility study for two 200,000 b/d condensate refineries in the states of Delta and Imo as part of a wider plan to slash fuel imports.
  • The first fuel stations in the city of Tianjin have replaced gasoline with ethanol, as China fires its first salvo in unfolding an ambitious biofuels plan.
  • Plans to shut down the only oil refinery in Trinidad and Tobago has prompted threats of a general strike by the country’s oilfield workers trade union.
  • Gunvor has halted plans to upgrade its Rotterdam refinery for cleaner marine fuels, citing adverse market conditions affecting financial viability.

Natural Gas/LNG

  • Despite the threats of sanctions from the US, Nord Stream 2 AG claims the natural gas pipeline connecting Russia to Germany is progressing on schedule.
  • Indian Railways is attempting to shift some of its rail fuel demand away from (dirtier) gasoil to natural gas, with GAIL appointed as the sole supplier.
  • Freeport LNG in the USA has signed Japan’s Sumitomo as its first client for its Train 4, shipping 2.2 mtpa over 20 years beginning in 2023 when Train 4 of the complex in Texas is expected to start up.
  • Bangladesh is updating and improving its PSC terms ahead of a planned offshore licensing round next year, hoping that the new contracts will be able to attract international firms to reverse dwindling natural gas output that has already forced the country to turn heavily towards LNG imports.

Corporate

  • Nicke Widyawati has been confirmed as the new CEO of Pertamina by the Indonesia government and Dharmawan Samsu as Pertamina’s new Upstream Director, with the aim of growing crude/gas output, boosting refining capacity and shedding fuel imports in favour of biodiesel usage.
  • Amid disappointing results in the oil sector, Russian state firms are proving to be a bright spark, with Gazprom beat expectations by reporting a 539% jump in 2Q18 net profits to RUB259 billion (~US$3.8 billion).

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5 Tips to Create an Evergreen Resume (Dont Miss no 4!)

The Oil and Gas sector is still recovering from some difficult times in the recent past and has adapted a high-performing culture to generate more from less. That has also translated to replacing the older, expensive resources to younger, cheaper talents and leveraging the gig workforce.

Thus having a few decades of experience in your kitty might sound like a huge advantage but in reality, this might become a burden if you are in the job market and competing with your younger counterparts, especially in this dynamic energy industry. The reputation of being redundant and lack of acceptance of newer skills can precede you and shroud the recruiter’s decision.

However, there is always a demand for experience in the job market and the top oil and gas companies are in a lookout for personnel, who have relevant prior experiences and are ready to adjust to the evolving changes in this industry.

Upskilling to remain relevant in this industry is crucial for the ageing workforce but when you are seeking a new job, everything zeros down to getting an opportunity to demonstrate your ability to the recruiter.

The first hurdle is to have a cracking resume or curriculum vitae that get shortlisted for the next round.

Here we share some tricks to age-proof your resume and check all the right boxes in a recruiter’s mind within the first 6 seconds of their short attention span.*

1. Be creative to attract attention

The best weapons you have are the skills that were acquired during the long tenure spent in this industry. It can easily become a drawback for your resume if you tend you write extensively about all these skill-sets and fail to understand what the specific job opening demands from its candidates.

It is advisable to select your skills carefully and highlight them with more visuals and fewer words. Use graphs and percentages instead of long sentences to make your resume stand out. Try to feature them on the front page and showcase only the relevant skills for the job you are applying.

2. Downplay on dates

Now, this can be a little tricky but not difficult. Do not unnecessarily highlight personal information like age and if needed move it to an obscure corner of your resume where there are lesser chances of it to be noticed.

While, for some jobs, the academic credentials are necessary to be mentioned, we recommend to feature these on the front page with the degree and university name but try and avoid the graduation dates. The recruiter might indulge in quick math to estimate your age. Also, when you mention the job history, maintain the chronology but avoid mentioning the start and end dates.

Please note that none of the above implies for you to submit misleading information to your prospective employer at any given stage of the recruitment process.

3. Highlight the recent and relevant experiences

There has been a massive shift in oil and gas processes, equipment and technology in the last few decades. Improvements in drilling mechanism, data-collecting sensors, technology to improve worker’s safety, etc. have changed most upstream and downstream jobs.

You might have also gone through this age of transformation but your resume might look dated if you end up mentioning the entire history.

Keep it crisp and recent; bypass mentioning any experience that may not be relevant today and does minimal value-add showcasing your talent for the new job. If you have moved out of oil and gas industry sometime during your career, keep it off the resume unless that experience adds value to the current job opening.

You ideally should be showcasing all the accolades that came your way throughout your professional life. Craft your messaging around mentions about the impact of your performance on the employer’s top-line and bottom-line results.

Having said this, under no circumstance should you use incorrect career or skill information in your resume.

4. Speak the language of the recruiter

Pick terminologies mentioned in the job description and highlight them in your resume. Try to tailor-make the resume to befit the job description and hence easier for the recruiter to understand your relevancy.

Keep working on your resume on a constant basis and it will become an easy task to quickly modify the variable content based on each new application.

5. Provide Social Media Coordinates

Provide the LinkedIn, Twitter and other relevant Social Media coordinates in your resume. There is a high possibility that you will be scrutinized on your social media activity and hence it is good to keep your professional social platforms details updated on your resume.

This also signals about your ability to stay relevant with the time by adopting digital communications.

Update your profile picture and preferably get it done by a professional photographer who focuses to capture your positive attitude and energy.

Maturity and leadership skills come organically to older workforce due to their extensive experience; And half the job-search battle is won if that can be captured in your resume and featured to the potential employers.

While it is discriminating and unethical to deny a job due to your age, there are several instances of biased recruitment in every industry, including oil and gas.

Bonus Tip: It is said your network is your net-worth these days. Connect with other energy sector professionals and share your experience with the community to increase your professional network.

We wish you all the best in your next job search!

September, 18 2018
Where to find New Giant Oil & Gas Fields

The title of this article is the title of a recent three day workshop that was organized by SkkMigas that had apparently been arranged due to the concern that Indonesia has with the ever-growing gap between the demand for oil and what is being produced in the country, as well as the ever-increasing concern about the economics of the country with the spending on infrastructure projects being a concern and development in the natural resource industry not being as expected.

There are other concerns, such as the ever-growing reliance on Pertamina to take over blocks from International companies, to develop existing and hopefully new blocks, or a recent headline: Pertamina sells off shares to stay afloat, or the concern of Pertamina to meet the government’s policy of ensuring the availability of Premium grade fuel at one price throughout the whole country. One senior person from Pertamina said to me recently, we will survive until the election, but what happens after that, who knows.

This makes one wonder, how will Pertamina develop new or existing blocks? How will they carry out the exploration that is needed to meet the subject of this opinion piece which is an interesting title in itself for many reasons. When I was asked about finding Giant Oil & Gas Fields by Badan Geology, I said, Pak, the chances of finding Giant Fields is fairly low, because if they were available they would have been found by now with existing methods of exploration. I was to learn that what they meant by Giant Fields is anything that contains a probable reserve of 500 million barrels of oil, (Giant oil and gas fields = those with 500 million barrels (79,000,000 m3) of ultimately recoverable oil or gas equivalent. Supergiant oil field = holds equivalent of 5.5bn barrels of oil reserves).

This is a different story then, as it is known that there are fields that contain this amount and above, just waiting to be confirmed and exploited, one such field has been known about for several years which contains something in the region of 1 billion barrels of oil, as well as gas and condensate, but due to political and other reasons this has not been developed until now.

The author of this article has written several times that Indonesia does have the potential to be self-supportive in resources, if only the knowledge of the country’s resources was known, sadly to say until now, the potential of the country’s resources is just that, potential. What has become apparent from the workshop organized by SkkMigas is that many people are concerned with the situation, but very few (if any) are prepared to take the risk for exploration, which does include the country’s own banks and entrepreneurs. What does risk mean? Put simply, it means loss of money. In my view, Indonesia is no different to any other country, the people in the country do not like to lose money, so why does Indonesia expect investors from other countries to lose money when they are not prepared to accept the risk themselves?

How to minimize the risk?, how to increase the success rate from 15%?, which is what Pertamina achieved last year for drilling of new wells, although this is not too far below the accepted success rate within the industry which is in the region of 20 – 25% (the normal). These figures can of course be argued about from company to company, but the overall success rate is low, if you were a gambling person, you would unlikely accept these odds. The answer is simple, technology, a technology that has been developed by people of the trade, not by some mad scientist, technology that has been used in different countries with a high success rate. Contrary to believe, Indonesia is no different to any other country when it comes to geology, yes Indonesia has complex geology such as volcanics in Java, deep water in East Indonesia, difficult terrain in Papua where some of the technology that is used today does not allow a detailed exploration survey to be carried out. I can name a number of other countries that have extremely complicated geology that has been successfully explored with technology. The old excuse that the technology has not been used in Indonesia does not wash, how can it be used if people do not want to accept technology readily? It does appear that SkkMigas is waking up, they realize that if they do not adapt to new technology faster, then the situation will not improve.

Technology that we take for granted has come a long way in the past twenty or more years, where did the technology come from? Normally technology comes from someone seeing a problem and asking a simple question, how can we do this better. I was giving a presentation the other day, when someone said, we have not been taught this in University, so how can we believe that this works, where I replied, it has been proven in many other countries with a high success rate, can you as a geologist work in another country, where the answer was “of course we can” where my reply was, if you can do this, why can technology that works in these countries not work in Indonesia? Technology that has been developed by people such as yourself which is based on geology, of course, there was no reply.

The point of this article is that Indonesia appears to be ready to accept technology, although there are still divisions within the government (ESDM) where you have so many different interests, what is required is that one central policy is required for technology and not so many different empires, it should be united.

Most people will accept technology from the medical industry that can save life’s, the same people in the exploration industry are reluctant to accept technology that not only improves the success rate of exploration but will create jobs for people as companies are exploring at reduced costs which in turn relates to reduced risk.

Indonesia does have the potential to meet its energy needs, to meet its goals that are agreed with increased success and reduced costs, as long as people are willing to accept technology and make decisions.

“Baby Giant Fields” are waiting to be discovered.

September, 18 2018
Infographics: Technology Watch - The Future of Oil and Gas Industry

Oil and Gas industry is considered traditional when it comes to adopting of new technologies or concepts. However, the notion is changing fast. This Infographic covers insights into which technological advancements will shape the future of oil and gas:

  • BlockChain allows the digital information to be distributed but not copied. The oil and gas industry, being data heavy, can leverage this technology both across upstream and downstream. Critical to uncovering the efficiency potential of distributed energy generation, blockchain opens up fundraising through initial coin offerings (ICO’s) and the industry has witnessed more than 1,500 ICOs over the last three years.
  • Gig Economy is the future of the oil and gas industry with 30% of its workforce comprising gig workers also known as gig contractors or freelancers. The trend is expected to rise in the coming years.
  • Rig decommissioning has become a major financial and logistical concern for virtually every oil company. The cost of decommissioning is rising sharply, and experts are predicting it to reach approximately $30 billion a year globally by 2040.
  • Smart Oilfield technology has enabled the industry to combine infield measurement devices, real-time data, simulation models and advanced algorithms to automate best practices and maximize productivity. This technology is enabling value addition in the current system and enhancing the upstream process.
  • Digital Transformation Offshore has enabled organizations, looking for common technologies, to balance requirements for uptime security safety with the need to take advantage of digital innovation.

September, 08 2018