the way ahead vol.9 n.2

8/14/2019 the way ahead vol.9 n.2

1/33

An Official Publication of

The Society of Petroleum

Engineers www.spe.org

FIND A CAREER IN PETROPHYSICS| GREENPEACES AYLIFFE VS. FTIS BLACKMON| GUIDE TO ABU DHABI

The Magazine by and for Young Professionals in Oil and Gas VOL. 9 // ISSUE 2 // 2013

OURINDUSTRYPUBLICPERCEPTION


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Printed in USA. Copyright 2013,Society of Petroleum Engineers.

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ContentsVOL. 9 // ISSUE 2 // 2013

2 Whats AheadPerspective from TWAseditor-in-chief, Todd Willi s.

3 TWAInterActResponses to TWAcontent sent via social media.

4 TWAInterviewDueling point s of view from Ben Ayliffe, head of Greenpeace Internationals

Arc tic Oi l Ca mpaign, a nd David Blackmon, ma naging director of strateg ic

communications for FTI Consulting.

8 HR DiscussionHow to use the Myers-Briggs T ype Ind icator to advance ones career.

10 ForumResults of a poll t hat sought to understand peoples oil awareness.

12 Economists CornerExploring the financial roadmap of an independents asset.

15 Pillars of the IndustrySarah Edman, ConocoPhil lips manager of corporate public policy,

discusses public perception of the oil and gas industry.

18 SPE 101How SPE needs you as a volunteer to help it accomplish all it does.

19 Discover a CareerShell Canadas Andrew Chen and Ronald Pagan talk about petrophysics as

a career in the petroleum industr y.

22 Technical Leaders

Cairo Universitys Ahmed El-Banbi and Science Based Solutions GeoffreyThyne give t heir perspectives on common public perceptions of the oil

and gas industry.

25 Soft SkillsThe global gas industr ya cleaner energy source needs a

smart workforce.

27 A YPs Guide to...Find out more about what its like in Abu Dhabi, United Arab Emirates.

30 YP NewsflashInterviews with the win ners of the 2012 SPE International Young Member

Outstanding Service Awards.

32 Your Best ShotThe best on-t he-job photos from reader submissions.

An Official Publication ofThe Society of Petroleum Engineers www.spe.org


3/33

Whats AheadFrom the Editor of TWA

Perception is reality.Todd B. Willis

Editor-in-Chief

The Way A head

There is a lot of truth to this quotation [which is generally

attributed to US Republican Party political consultant

and strategist Lee Atwater (19511991)]. People view

the world and the events in it through their own colored

glasses, tinged with political v iews, beliefs, and their own

personal experiences and history. How else can you explain

such widely divergent and hotly contested viewpoints on

serious issues like drilli ng in the Arctic, or topics as benign as

the American professional football quarterback, Tim Tebow?

No rational person can deny the critical role that fossil fuels

have played in the development of our 21st-century world. Yet,

this hasnt helped the image of the oil a nd gas industry.

Some of this negativity is deserved. While some industry

detractors can never be swayed toward a positive view of our

industry, much of the general public has legitimate complaints,

worries, and fears about our industry: refinery accidents

and explosions, the searing images of crude-covered

coastlines from the Exxon Valdezspill of 1989, and a new

generation witnessing the damage from the Macondo blowout

in the Gul f of Mexico. These are legitimate, and deserved,

black eyes for our industry. We must do better to ensure they

are never repeated.

Other negative perceptions are not so deserved. Pain

at the pump has entered the lexicon to describe the ever-

expanding budget item that gasoline has become for the

typical American family. But prices are driven by supply and

demand, which no industry, not even oil and gas, can hope

to control.

The right question to ask in response to any problem is:

Whats to be done? What can we in the oil and gas industry do

to mitigate, or at least address, negative public perception?

It starts with engagement. We should not be afraid to stand

up for the important role oil and gas plays in our modern

economy and our lives. From the heating and cooling of our

homes, to our cars we drive on the weekend, to the tires we

outfit our bicycles with, oil and gas touches every part of

our lives.

It is also important to push back against misperceptions. A

common myth is that the oil and gas industry is hostile toward

renewable energy. I dont know anyone who doesnt like the

potential that renewable energy holds. What s not to like about

a solar-powered car that doesnt require weekly fill-ups at

the gas station? Or a geothermally heated house that would

save families thousands of dollars every year in electric and

natural-gas bills?

Setting aside the fact that the green movement appeals

only to some people, saving money appeals to everyone. The

problem is that the technology just hasnt fu lly arrived yet. For

the limited applications where renewable energy sources can

serve as the primary source of power, there are many other

applications, mainly transportation like cars and ai rplanes,

for which we are decades away from finding a realistic fossil-

fuel substitute. Even hybrid cars still have to plug into a socket

whose electrons are ultimately generated by a coal-burning or

natural-gas-fired power plant.

Finally, we must acknowledge when weve made mistakes.

Deny and attack may work in politics, but such tactics

only deepen the publics mistrust when used by our industry.

We must admit mistakes, fix them, and commit to doing better

in the future.

As par t of TWAs attempt to engage in the debate, Im

excited that this issues TWAInterview section features

a question-and-answer session with two people who

champion opposing sides of the debate: Ben Ayliffe, head of

Greenpeace Internationals Arctic Oil Campaign, and David

Blackmon, managing d irector of strategic communications

for FTI Consulting. This issues Forum section continues th is

theme by exploring the publics awareness of how pervasive

oil and gas products and byproducts are in our society. I hope

you enjoy reading these ar ticles as much as I did.

You can engage in the conversation as well! One of the

easiest ways is by visiting TWAs Twitter, Facebook, and

LinkedIn pages and joining (or starting!) a conversation.

Were always eager to hear from our readers. What do

you think is the publics overall perception of our industry?

Why does the public have that perception? And what can

we do to change or improve it? Drop us a line. We would love

to hear from you.

Ill close by saying I always strive to have things

both ways. Why not have your cake and eat it, too? In

this case, I believe we as an i ndustry are capable of

continuing to meet the worlds energy needs, but in a

reliable, environmentally responsible, and ethical manner.

These goals are not mutually incompatiblethey do not

represent either/or choices. Importantly, our industry

simply must achieve these goals until the energy torch

can tru ly be passed from fossil fuels to renewable energy

sources. This, more than anything else, wil l ensure we

are doing all we can to dispel negative perceptions of

our industry.TWA


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3Vol. 9 // No. 2 // 2013

TWAInterAct

From TWAs Twitter Page

Heres our deputy EIC enjoying some sights during

downtime at a meeting in Philadelphia! #libertybell #tw itpic

Editors Note: Dont let David hog the camera:

We know waiting around in the field can be

boring... Why not tweet us the sights!

Heres some helpful advice tweeted by a seasoned pro:

@SPETheWayAhead: They dont teach this way of pulling

stuck pipe in school. It is all about acoustics

http://bit.ly/XSClxg .

If clicking on the URL doesnt work, try typing it into

your browserand youll get the abstract of a very

interesting paper!

From TWAsLinkedIn Page

We now have al most 500 joining us on our LinkedIn page!

Come join in on the discussions!

FromTWA

s Facebook Page

Thanks for the Likes!

Abdessamia Jebbouri

Woozy Hoppipolla

Alexander Kolesov

Carlos Rojas Salazar

Did you know?Incoming editor-in-chief David Vaucher got his

start at TWAafter a letter he sent to the editor ledto an invitation to join the team?

Send us your emails with thoughts, comments,and opinions!

Who knows? Maybe youre destined to be ournext EIC!

Emailyour thoughts [email protected].

Converse with us onTwitter: @SPETheWayAhead.

Find us on LinkedInatSPE The Way Ahead.

Like us on FacebookatThe Way Ahead Magazine.

Get the TWAappat theApp StoreandGoogle Play.

Jointhe TWAEditorial Team byemailing [email protected].

There are many ways to participate in

E X P E R I E N C E


5/33

TWAInterview

In order to frame the public perception

conversation,The Way Ahead

interviewed two executives at opposing

ends of the debate. By asking each of

them the same questions, we hope their

answers will provide a comprehensive

yet unbiased representation of

the conversation.

What is your companys missionand your role in the organization?

BA:Greenpeace is an independent

campaigning organization that uses

peaceful protes ts to expose global

environmental problems and help

promote solutions that we believe are

essential to a green and peaceful future.

Were based on strong principles of

nonviolence and bearing witness, so

we go to areas where we perceive

environmental harm is likely to happenand we take peaceful direct action

to stop and/or raise awareness of

the issue.

My role is to lead the internat ional

work on the Arctic. The genesis of

my work was the Deepwater Horizon

incident in the Gul f of Mexico (GOM)

because, up until then, our focus was

on unconventionals like oil sands. After

the Deepwater Horizonwe became

increasingly aware of the frontier areas

that the oil industry was considering,ultradeepwater and the Arctic, and

we started a campaign to expose

those operations.

DB: FTI Consulting provides an

array of advisory services that

address the strategic, reputational,

financial, regulatory, and legal needs

of energy cl ients. We have extensive

experience addressing conflicting

regulatory frameworks, power industry

restructuring, pervasive contractual

disputes, and litigation. We also furnish

strategic communications services

across all the disciplines, from capital

markets to investor relations. Were also

the managing contractor for Energy

in Depth [a research, education, and

public outreach campaign focused

on getting the facts out about the

promise and potent ial of responsi bly

developing Americas onshore energy

resource base] communications. Iam the managing director of strategic

communications and have been a

spokesperson for the industry for

many years.

What is your own opinion of the oil

and gas industry?

BA: My opinion has unquestionably

evolved. One aspect that drives my

persona l opinion is the high level ofaccess the industry has to government

and civil servants. Whether that is

perceived to be a bad thing or not by

the general public is arguable, but the

industry certainly has an influence over

public policy.

The other driver is the way the oil

industry has increasingly cultivated

its social license to operate. Today,

we see a slick, well-integrated, and

high-profile public relations push by

the industry. Im struck by the lengthsthe industry goes to cultivate this

cultural persona through sponsorship

of high-brow art galleries, public

art spaces, and museums, in an

attempt to soften its brand. People

who frequent those events are there

to see fine works of art and museum

exhibits of dinosaurs, so being in that

environment softens the perception

of a company that could be involved

in oil spills in the Niger Delta or in

the GOM.

Ben Ayliffe

is the head of

GreenpeaceInternationals

Arctic OilCampaign.

He has beenat the organization for 10

years and has worked on manyGreenpeace issues, from illegal

logging to climate change and

nuclear power. Ayliffe has amaster of science degree in

environmental technology fromImperial College, London.

David Blackmon

is managingdirector of

strategic

communicationsfor FTIConsulting,

based in Houston. Before joining

FTI in 2012, he had a 33-yearcareer in the oil and gas industry,

working on public policy issuesfor companies such as Shell,

Burlington Resources, El PasoCorporation, and Coastal States.

From April 2010 through June2012, Blackmon served as the

Texas state lead for AmericasNatural Gas Alliance. He attended

Texas A&I University and The

University of Texas at Austin,earning a BA in accounting.

Dueling Ideologies:Green vs. the Oil and Gas Scene


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5Vol. 9 // No. 2 // 2013

It was no surprise, then, that during

the worst of the Macondo incident, BP

was pushing this idea that they were

sponsoring wonderful gala events and

running arts projects in the Natural

History Museum [in the UK]. I feel very

strongly that these are thinly veiledattempts to detoxify the brand so as to

soften the perception of a company and

detract attention from the day-to-day

realities of life in the oil industry

mainly that its a polluting industry with

incredible closeness to governments,

that undermines action toward climate

change, and is involved in spills and

social unrest.

DB:I think its one of Americasand

the worldsmost important industries.In fact, I wish everybody in school had

as required reading Daniel Yergins

[book] The Prize, which chronicles the

history of the industry and how critical

the reliability and continued flow of oil

has been in every major conflict since

the late 19th century. For instance, the

main reason why the Allies won the

Battle of the Bulge in WWII was because

Hitlers supply lines of petroleum for

his tanks were interrupted, so they

simply ran out of fuel on the battlefield.Important events like that make one

realize how critical oil has been to the

world for the last 150 years.

Yet its a vital indust ry that

continues to evolve rapidly due to the

advancement of technology and the

need to be conscious about protecting

the environment, the latter of which the

industry does a better job of all the time

but unfortunately does not do a good

job of tell ing its story.

Do you think your opinion is in line

with that of the general public?

BA: I freely admit that I work for

an environmental organization and

that some would see me as a radical

lunatic with a cynical view, but I think it

depends on the context of the question.

Some people may view the industry as

a means to an end and their relationship

ends at the petrol station, only to be

reconsidered during moments of

heightened media attention. During

events like the Macondo oil spill, there

is a lot of public i re as people digest

the risks and relaxed attitudes toward

safety taken by these companies.

The flip side is that we live in a n age

when people are very attached to their

cars. Thats certainly the case in the

United States. Also, considering that we

live in times of high austerity with mass

unemployment, the industry is almost

like a necessary evil.

DB: I think the publics perception

varies by region of the country [in the

US]. For instance, although we hear

about the low public approval rating

nationally, the natural gas industry hasan 80%+ app roval rati ng in Texas.

People in Texas understand that its

a vital par t of their lives and prefer it

as a source of heating over electricity

because its clean-burning and easy to

use. But one is liable to get a different

answer from someone in Californ ia or

New York.

Unfortunately, so much of the

industrys image has been guided by

its portrayal in the news media and in

films like Gasland, which have beenproved to contain fals ities that have

nonetheless been incredibly damaging

toward public perception. That image

of igniti ng water from a faucet was

allowed to be perceived to be caused

by a nearby drilling operation, but in

fact the people in that area had been

lighting their water on fire ever since

they had running water because their

water table/reservoir sits directly

above a coal seam so that methane gas

migrates with the water. Indeed, the

water has always had methane but no

reporters bothered to report that fact

and instead the image was burned in

the publics mind.

Because its always been a part

of the community i n Texas, people

are cognizant of the negative aspects

but ultimately understand its positive

impact on their lives. When they look

at the big picture they realize its an

incredibly productive enterprise for

the region.

Why do you believe that industries

that involve discretionary

spendingrestaurants, retail,

computersconsistently rank

favorably in public perception polls

compared to industries that providenecessities, such as banking, oil

and gas, and pharmaceutical?

BA:Unlike filling up a tank of gas to

drive to work on a Monday morni ng,

only to be greeted by a demanding

boss, when I go to a restaurant with my

girlfriend its a special moment that

I look forward to. What the industry

provides is assumed to be part of the

mundanity of life in the 21st century,

whereas a restaurant is a choice thatI make to enjoy myself and one that

takes me out of the ho-hum life in

London. That said, I think there are

deeper perceptional issues of the

industry as well. This is an industry

with a checkered history of safety and

responsibility, and its evident in the

way some of the public perception polls

have turned out. People tend to not trust

extractive industries.

DB:Oil and gas, along with bankingand pharmaceuticals, provide integral

and necessary parts in peoples lives.

Theyre fixed costs: You must fill your

tank with gas. If the price is high, it

hurts the pocketbook. People resent

the costs in their lives that they have

to bear, whereas going out to di nner is

a pleasure activity that is optional and

associated with having fun.

What are the main topics shaping

the publics perception of the

industry today?

BA:Three things: energy future,

climate change, and risk of accidents.

People are beginni ng to have a

discussion about how we will provide

our energy needs for the rest of the

21st century. On climate change,

our perception, tacit or otherwise, is

beginning to influence the public as

the phenomenon of climate change


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TWAInterview

becomes universally acknowledged.

The sense that climate change is

happening around us is increasing.

The other topic is the risk of

accidents. From Deepwater Horizonto

Exxon Valdezand other tanker disasters/

crashes, they all resonate with people.Although these may be freak events

that are unpredictable, in the back

of peoples minds is this idea that the

industry has been responsible for

disasters they see in the news.

DB: The main catalyst seems to be

hydraulic fracturing. About 6 years

ago, many of the environmental and

anti-oil and -gas groups decided

to mount a concerted effort to

make hydraulic fracturing into aboogeyman in the publics mind. The

word fracing has essential ly become

a curse word in the American lexicon

thank s to the media. Theres more

disinformation in the public domain

today than there ever has been, so its

easy to see why the public perception

has become negative even though

hydraulic fracturings actually been a

blessing to the country.

That said, there are legitimate

environmental concerns of whichthe industry is cognizant and works

every day to minimize their impact.

For a long time, the process used

mostly freshwater, but the industry

is beginning to trend toward using

brackish water and, in fact, some

hydraulic fracturing companies

have suggested to me that within a

few years we will be able to do these

jobs with brackish water entirely.

Although the overa ll usage by

the industry of water statewide is only

about 1%, when the public hears that

hydraulic fracturing uses 3 million

gallons of water in each fracturing

job, it sounds like a lot of water no

matter that in the overall context its

a very small percentage. The truth is

that the industry doesnt want to be

in a position where it is competing

with people for drink ing water,

particularly in times of drought, so the

use of brackish water will hopefully

diminish public concerns.

What steps should the industry take

to mitigate and/or change how it

is perceived?

BA:I would argue that theres a lot the

industry can shift away from, includingincreasingly unconventional and

marginal sources of oil like pre-salt

in Brazil and Arctic oil in the northern

Barents Sea, and instead undertake

a palpable shift toward spending

real capital in energy efficiency and

clean technology.

Its not Greenpeaces role to make

the industry better or be perceived to

be better, and frankly it would be great

if the industry went away altogether

because there are serious problemsin terms of environmental and social

impacts. In an ideal world, wed like

the industry to not be here. However,

we live in the real world and we realize

thats not going to happen, so our job

is to engage with the industry when

possible to make reasonable points that

reasonable people can agree upon.

DB:I gave a presentation about 10

years ago at a conference in which I

told the audience that our industry wasmore inept at public relations than the

tobacco industry, and I tru ly believe

that. Weve gotten better, particularly

in the last 5 to 6 years, and I think

weve shifted somewhat the publ ic

perception, but it cannot be changed

in a radical way in the near term. Its a

long-term process.

Each advertising effort is very

costly and makes a small dent, but they

do make a di fference because our side

of the story goes out to the public for

their consumption and consideration

in an otherwise biased media. The

industry has had a long and difficult

relationship with the news media,

going back to John D. Rockefeller, and

its only in the last 8 to10 years that

there has been a focused effort by

the leaders in the industry to change

that relationship and change how we

communicate with the public. Over

time it can be changed, but it takes

baby steps.

It seems that environmental

organizations and the industry

are always on opposing sides of

discourse. What would one side

need to see from the other?

BA: Im not nave enough to suggest that

we turn off all the wells and shut down

every coal-fired power station, but the

environmental effects of the current

carbon logic of burning fossil fuels are

becoming increasingly hard to argue

against. We cannot a fford to continue

burning and extracting these large

amounts of fossil fuels because they are

putt ing us on a trajectory for upwards of

6 degrees Celsius of global warming.

Its clear to us, even in the short-to-medium term, that we need to

be making a rapid shift toward a

decarbonized economy. That wont

happen overnight and we accept

that, but I dont believe the indust rys

suggestion that we will need oil and

gas beyond 2030 or 2040 or 2050. In

fact, if I were a shareholder in an oil

and gas company, I would be worried

about my money being in a company

thats out of kilter with a shif t toward

de-carbonization and wasnt flexibleenough to recalibrate their priorities

and capitalize on those opportunities.

Wed need to see a rea l shi ft,

as opposed to hot air, toward a

decarbonized economy and see an

end to the most reckless exploitation of

the marginal sources of oil, such as the

Arctic and oil sands.

There are also a lot of link s between

the industry and governments and

theyre overall very cozy with each

other, so that doesnt do an awfu l lot

to improve public perception and that

would need to change.

DB:In the environmental movement

like any movementthere are people

who have good-faith concern and

there are groups who are basical ly no

different than the Occupy Wall Street

movement, the latter of whom are

essentially anti-development groups in

the game simply to stop development

activities by usingin the case of


8/33

environmental groupsenvironmental

laws as vehicles toward obstructionism.

Unfortunately, the reality is that the

radical part of that movement has

been infiltrated by the same anarchist

elements that infiltrated the Occupy

Wall Street movement, and the fact is

that you will never satisfy those folks

because its impossible to have a

meeting of the minds with people who

are beyond reason.

Its certainly possible to sit down

with environmental groupsand Ive

been involved in those processesthat

are truly interested in finding ways to

improve and modernize regulation of

the industry. Those groups are out there

and they will work with you. They may

not agree with a lot but at least theyrewilling to sit at the table with you and try

to find an approach that everyone can

agree to live with.

Unfortunately, we do spend a lot of

time and energy throwing rocks at each

other through the media. The media

has become an entity that thrives on

conflict. The industry has to figure out

ways to live within that system and

still be able to get its messages out.

Collaborative processeswhenever

we can engage environmental groups,academics, and regulatorscan have

the biggest impact.

What advice do you have for

young professionals in the

industry or considering a career in

the industry?

BA:You have seen first-ha nd the

dangers and problems with the

industry, so make sure to think

about your companys capabilities of

responding to an accident. Question

the basic assumption of rushing

into the most remote, fragile, and

technically challenging areas to

extract hydrocarbons. Chal lenge

the fundamental assumptions and

join the race to the future toward the

technologies that will get us a cleaner

and more peaceful world.

DB:For those considering a career

in the industry, come join us. There

has never been a more exciting time

to be in this i ndustry, and we wil l

probably never have a period more

exciting than what the next 20 years

will be. Oi l and gas companies haveneeds in practically all d isciplines, so

its a wide open deal for young talent

right now.

For those already in the industr y,

learn about the issues your industry

is facing and take t ime to follow the

variou s news sources to u nders tand

whats out in the public domain.

Become an advocate for your

company and your i ndustry. So much

of the public perception is shaped

through conversations that go onin churches, coffee shops, and town hall

meetings. The other side is very well

organized and motivated, so their

messages, true or false, are well-

voca lized and if theres no one there

to answer to the fa lse ones, thats

what gets heard. Its important for

the continuity of our industry that

we develop more advocates who

are will ing to stand up for what

theyre doing. TWA


9/33

HRDiscussion

To assist in understanding your

leadership style and how you can

communicate effectively with others

in the workplace, the Myers-Briggs

Type I ndicator (MBTI) can provide

revealing and useful insights. The MBTI

can help you recognize that people

do not all speak the same language.

Understanding the concepts and

framework of the MBTI can bridge

differing perspectives that affect

teamwork and work relationships.

It can be a tool to aid in working

together more effectively on a project

and in helping learn how to promote

each others best quality work. It also

provides pathways for d iscover ing

each others values and needs and for

findi ng avenues for developing oneself.

Successful workplace leaders

belong to all MBTI types, because the

MBTI is a tool only and does not purport

to explain everything about a persons

thinking or actions. For example, it

cannot predict how people will behave;

however, it can be very powerful i n

recognizing patterns of behavior and

identifying the multiple lenses people

have for perceiving the world and

making decisions.

Katherine Briggs developed

the MBTI philosophy based upon

constructs originated by Carl G. Jung, a

Swiss psychotherapist and psychiatrist

who founded analytical psychology.

Isabel Briggs-Myers, Katherines

daughter, further developed the MBTI

by creating an instrument to help

individuals identify their personality

type. The MBTI consists of four poles

of opposites. Individuals attraction to

one side of each pole is referred to as

a preference.

The four MBTI poles identify ones

preferences in the fol lowing areas:

interpersonal response, taking in

data, making decisions, and problem-

solving approach.

Interpersonal response:Are you

drawn to the outer world of people and

action (extraversion) or the inner world of

thoughts and ideas (introversion)?

Data intake:When you are learning

something new at work, do you prefer

data that engage your five senses

(sensing) or do you prefer to identify

patterns and connections, grasping the

big picture (intuition) before learning

about the details?

Making decisions:Do you

prefer to decide through objective

analysis (thinking) or through how

decisions might affect yourself and/or

others (feeling)?

Problem-solving approach:Do you

prefer closure (judging) or process

(perceiving)? For example, do you

feel most comfortable having things

decided and moving toward closure

in problem-solving (judging) or do

you prefer to keep things open until

all data are available before making a

decision (perceiving)?

Interpersonal Response:Introversion/ExtraversionHow can the understanding and

application of the interpersonal

response preferences affect ones

leadership, communication, and

professional development?

Leaders who prefer introversion

generally like to think things through

before expressing their ideas. When

working with persons who prefer

introversion, circulating an agenda

before a meeting, asking if they would

share aloud, and giving more thinking

time can encourage more participation

and sharing of their ideas.

How to Advance Ones Career, ManageOnes Team, and Become a MoreSuccessful Leader: Using theMyers-Briggs Type IndicatorWendy C. Horikoshi, Prism Coaching

Wendy C. Horikoshi is a strategic coach and leadership

trainer. She has served as an adjunct professor in the cross-

cultura l psychology and graduate management programs at

JFK University as well as adjunct faculty in the quali fyi ng

program of the Association of Psychologica l Types Myers-

Briggs Type Indicator (MBTI). Horikoshi is a certified

neurolinguist ics program coach and holds a masters degree

of education in multicultural curr iculum from California State

University. Prior to independent consulting, she worked as an academician/

administrator/researcher at the University of Cal ifornia youth development

program in Alameda County. Horikoshi is a founding member of Pr ism Coaching:

Transforming Perspectives, a multicultural leadership coaching practice.

She coauthored Teamwork Tools: A Revolutionary Approach for Trainers

and Managersand has published research on the MBTI, leadership, and cultural-

awareness practices.


10/33

9Vol. 9 // No. 2 // 2013

For leaders and team members who

prefer extraversion, it can be helpf ul

to give enough time to talk new ideas

out and to check in with each other.

Extraverts are drawn to people and

action; so working together in the outer

world gives them energy.

Data Intake: Sensing/IntuitionPersons with the sensing preference

are oriented to the present and tend to

speak in factua l and concrete language.

They generally trust that a person with

expert knowledge will give them the

necessary in formation, and they accept

the incoming data. T hey tend to speak

in a sequential manner and seem to

easily identify tasks and ideas in steps

of first, second, and so forth. Their

perception scans the environment a nd

takes into account what is realistic and

practical . When communicat ing with

those preferring sensing, it s helpful to

provide a roadmap when expressing

the overall goal and to g ive practical

application of concepts.

Team members who prefer intuition

will readily grasp the big picture,

trusting their hunches and data that

come to them qu ickly. Those preferring

intuition are drawn to the why of

things and generally love to ask and

formulate questions. Its important to

give the big picture to persons with

intuitive preferences as they need the

underlying concept on which to hang

the details. Persons who prefer intuition

appreciate novelty and wi ll often get

bored if you want to repeat the same

processes without incorporating some

new or interesting approach.

Making Decisions:Thinking/FeelingPersons with the think ing preference

tend to remove themselves from the

decision-making process and use

facts and ideas to weigh and balance

potentia l outcomes.

Persons with feeling preference

tend to place themselves within the

decision-making process, weighing

and balancing their values.

In working with thi nkers, its

important to outline objective results.

In working with persons with the

feeling preference, its important to

take into consideration values and

how the decision affects people.

Good leaders must employ both

thinking and feeling to get the best

results to which a whole team wil l be

fully committed.

Persons of either preference would

probably say they want to treat people

in a fa ir way, although the definition

of fair may be very di fferent.

People with the thinking preference

generally define fairness as treating

everyone exactly the same. People

with the feeling preference are more

likely to define fairness as doing

whats appropriate for the situation

or person(s).

Problem-Solving Approach:Judging/PerceivingPersons who prefer judging are more

comfortable with employing the

decision-making processesthinking

or feelingin the outer world. Persons

who prefer perceiving are more

comfortable using sensing or intuition

in the outer world.

Qualities that generally

accompany judging include desire

for closure, being scheduled, and

being methodical.

Qualities that can be noticed

in persons preferring perceiving

in the outer world are being in the

moment, spontaneity, and adaptabi lity.

Using Type to AdvanceYour CareerThe MBTI can be a valuable tool

in sort ing out whats needed to

optimize learning and decision

making. The interaction of our

preferences is referred to as the

dynamics of type. The orientations

of extraversion/introversion and of

judging/perceiving are paired with the

mental funct ions of how we prefer to

learn new things (data intake) and to

make decisions. How these four pairs of

preferences work together provide us

with a more specific framework for

understanding what might be driving

our patterns of behavior.

Once a persons MBTI type is

identified, the combination of the four

preferences is represented with four

letters. The first and fourth letters

either E or I as the first letter, then

either J or P as the fourth letterrefer

to whether ones orientation of energy,

extraversion/introversion and judging/

perceivi ng, i s with in the outer world

or the inner world. The second and

third letterseither S or N as the

second letter, then either T or F as the

third letterrefer to a persons mental

functions and how they use their minds.

This combination of letters in a persons

type code points to a hierarchy in the

mental function relied on most, whether

it is sensing/intuition or thinking/

feeling. Each type code contains one

mental function that is extraverted and

one that is introverted.

MBTI theory postu lates that

it is important to focus on our

preferences first s ince they correlate

to our strengths. Generally if certain

processes are more natura l for a

person, the ind ividua l is more l ikely

to have developed some strength with

it. Malcolm Gladwells 10,000-hour

theory states that people who are at

the top of their game have placed an

extraordinary number of hours in that

field. It would appear from this theory

to be difficult for an individual to spend

so much time engaging in an activity

if the indiv idual did not enjoy the

practice and hadnt developed some

capacity in it.

When leaders become conscious of

the interplay of their own preferences,

there can be a kind of security in

understanding what they need to

do to progress toward their goals.

Conversely, comprehension of MBTI

type can lead a person to better

understand the needs of their team

members and/or direct reports.

The development of leaders less-

preferred preferences ca n also help

them become more well-rounded

in their work and assist in taking on

challenging arenas more graceful ly.

Continued on page 21


11/33

Forum

The Oil Life Cycle

Well begin by playi ng a game, based

on a riddle.

The following is a descr iption of a

word. Your task i s to guess the word

that matches the description:

It exists in so-called reservoirs

that have developed over millions of

years, and through a process of organic

deposition, maturation, migration,

and other means has changed into

an abundant and dependable energy

source on which modern economies are

based. Companies explore for it using a

mysterious technology called seismic,

and follow up their exploration efforts by

drilling wells thousands of feet into the

ground and using exotic tools called logs

to characterize the lithology, wellbore,

and fluid.

Eventually, after dri lling, running

pipe, cementing, perforating, and more,

the wells are finally ready to produce this

magical resource.

After a wel l produces th is resource,

it must somehow be upgraded

at production facilities, which can be a

simple or intensive process, depending

on the resources chemical composition,

so it can be transported thousands

of kilometers via pipeline (and rail

in todays market) to places called

refineries. Only at refineries can it

then be turned into marketable products

by means of very intensive processes

such as fractional disti llation and

catalytic cracking.

It likely took you only a second to

guess the word being described is oil.

The purpose of the exercise wasnt

to waste your time, but to provide an

opportunity for appreciating the broad

geological timeframe and general level

of scale and complexity that precedes

the consumption of oil-based products.

Given the oil industrys vast

scale and complexity, it is no wonder

the public has formed many negative

views. Statis tics from a 2012 Gallup

survey show that US citizens view the oil

and gas business the most negatively of

the 25 business sectors identified. In fact,

the survey results show a similar trend

of negativity for the oil and gas sector

over the past 12 years.

What is real ly interesting about the

Gallup survey is that the three most

favorably viewed sectors are computer,

restaurant, and retail, respectively. It

makes sense that consumer sectors

would rank highly: They generally

market to and provide citizens with

products that enrich their l ives. But

there is a disconnect stemming from

the fact that a large portion of material

and energy inputs that form electronic,

food, beverage, and retail products

come from byproducts of oil.

For example, according to a

recent article by National Geographic,

Americans purchase roughly 29

billion bottles of water a year. For

manufacturers to make all these bottles,

it takes close to 17 million bbl of oil,

which is almost equivalent to a ful l days

oil consumption in the US. More than

2.5 million tons of carbon dioxide are

produced bottl ing that water, and the

plastic produced has a higher ca lorific

value than that of sub-bituminous coal.

Another example recently cited from

a French online encyclopedia claims it

takes 312 L (1.96 bbl) of oil to produce

the materials needed for an average

24-kg computer and 612 L (3.84 bbl) to

transport it to market.

The Oil Dilemma

Oil is undoubtedly a lynchpin of the

worlds economy. Oil is the worlds

most widely used source of energy,

accounting for 40% of global energy

consumption and an astonishing 96%

of the energy used in the transportation

sector. Yet even if we were to remove

all gasoline- and diesel-powered

vehicles from the roads, we would sti ll

be dependent on this hydrocarbon.

One of the first applications of oil,

dating back thousands of years, was

as a medicine. Nowadays the most

surprising uses i nclude chewing gum,

lipstick, and aspirin. Every barrel of

crude oil holds remarkable potential:

It helps keep us warm, helps keep us

on the go, and provides the building

blocks for countless products we

take for granted. Plastics are a great

example of this, with water bottles a

notable illustration. Although there is a

growing interest in the use of biomass

as a feedstock, fossil fuels today form

99% of plastics raw material base.

Oil: What the Public Doesnt

See Every DayJarrett Dragani and Maxim Kotenev

Jarrett Draganiearned a BS degree in mechanical

engineering with a specialization in energy and the

environment from the University of Calgary. He currently

works for Cenovus Energy as a mechanical engineer

supporting design and construction of the Christina Lake Oil

Sands Expansion and has 3 years upstream experience

working across various sectors of the industry in western

Canada. He is a member of the SPE Calgary Section board

as well as an editor for SPEs The Way Ahead.


12/33

1Vol. 9 // No. 2 // 2013

So what would happen if humankind

were to freeze oil production tomorrow?

What would happen to plastics a nd

other materials if oi l production were

to cease? At this time of high oil

prices, due to scrut iny of reserves and

exceptionally high growth in energy,

these questions need to be asked

more often.

Production of light plastic products,

replacing traditional materials to

reduce weight and fuel consumption,

uses far less energy than traditional

materials. Remarkably, even renewable

energy sources are only viable with

the use of plastics. Both solar panels

and wind turbine rotors contain

plastics. Another example would be the

greenest means of transport, cycling.

A total of 18 dif ferent plast ics are used

in the average bicycle. Some, offering

durability superior to metal, are used

in gears and pedals. Others make seats

and handlebars more comfortable.

The comfort and shatter-resistance

of helmets is achieved with the use of

liquid hydrocarbon foam polystyrene.

Where does all this plastic go

when were done with it? According

to the United Nations Environmental

Program, global plastics consumption

rose from 5.5 million tons in the 1950s

to 110 million tons in 2009. A similar

trend can al so be noted for plastics

disposal. In fact, Peter Jones, a British

waste expert, predicted in 2008

that UK landfi lls might be mined for

plastics a nd ocea ns scoured for the

material within a decade due to high

raw material prices. The Earth Institute

at Columbia University claims that

if all the plastic in US landfills were

processed into liquid fuel, it could

power all the cars in Los Angeles for

a year.

Lets be clear on something first

and foremost: Oil will not run out

completely for a very long time. As we

have seen recently, when oil becomes

increasingly scarce (both regionally

and globally), prices rise to the point at

which economies can no longer afford

it for all applications. It becomes an

economic hindrance for industries that

utilize oil as a feedstock, increases

prices at the pump, a nd eventua lly the

everyday consumer starts to see prices

rise for oil-derived products. In his

book The World in 2030, futurologist Ray

Hammond predicts that in the future oil

will not be burnt away and wasted in

energy and transport but reserved for

high-value processes and products

such as plastics manufacturing and

energy trapped within the plastics can

either be recycled or recovered and

used for heat generation.

Oil Awareness

So the question that arises is: Is the

publ ic aware of the end uses of oil?

Whose responsibil ity i s it to make the

publ ic aware of al l the end uses of oil?

To help empirically explore these

questions, we distributed a survey

among respondents from Canada, the

US, and var ious EU member states. To

help support a true public view, 80%

of the respondents selected had no oil

industry work experience.

When asked what color comes to

mind when they think of oil, almost all

respondents indicated that oil is either

black or brown, likely a depiction

stemming from vivid images of oil

spills such as those resulting from the

Macondo blowout and Exxon Valdez

disaster. Almost 90% of respondents

guessed that the nearest oil facility

was less than 300 km from their home

and upwards of 70% of respondents

felt that oil was not in short supply, as

defined in the question as less than 20

years supply.

So in short, it would seem that

the respondents are fairly well

educated about oil, and indeed

they are.

But some results indicated the

existence of a disconnect. Respondents

had difficulty categorizing how much

Fig. 1Some of the oil awareness survey results.

Yes

90%

75%

50%

25%

10%

0% 5% 10% 15% 20% 25%

Answers

Portiono

foil

30% 35% 40%

Not sure

Do you think that a computer screen is

made of oil constituents?

Roughly, what portion of produced oil is

used for gasoline production?

Roughly, how much of the worlds

transport depends on oil?

No

100%

80%

20%40%

50%

60%

Maxim Kotenevis a reservoir geoscientist at Fugro

Robertson in the UK. Previous responsibilities include

geological and reservoir engineering work with Lukoil,

Rosneft, and Technical University of Berlin, Germany.

Kotenev was president of the Ufa SPE Student Chapter and

currently serves as vice-chair of the SPE London Section YP

Committee. He has coauthored 15 technical papers. Kotenev

earned BS degrees in petroleum engineering and petroleum

economics and management f rom Ufa State Petroleum Technological University,

Russia; an MS degree in petroleum geoscience from the University of Manchester,

UK; and a PhD in petroleum engineering from the Academy of Sciences, Moscow.

Continued on page 29


13/33

Economists Corner

Finance theory is based on a very

simple principle: Reward is a function of

risk. In other words, when comparing

two investmentstwo assetsthe

riskier one should serve a higher return

(yield) than the other.

A fair and efficient market is, by

definition, a market that serves an

adequate level of return for a given

level of risk. The reality of finance is

obviously somewhat different, and even

though we understand the definition

of a transparent and efficient market,

we still have not witnessed a pure and

perfect market. This is probably where

finance and geology meet: Neither is a

pure science.

Although we all know our stated

equations, we struggle in our everyday

job to approach the perfect system (be

it a financial or a hydrocarbon system).

Even though risk/reward theory can

be challenged (as evidenced by the

abundant number of academic papers

addressing the inefficiency of the

market), it remains a powerful paradigm

to understanding the basics of finance,

how funding flows into the oil and gas

business, and ultimately how money is

made available to companies exploring,

appraising, and developing oil and

gas assets.

Financing Assets and

Companies at an Early

Stage: The Equity Stage

From an investors point of view, an

assets life cycle can be simplified

into four main stages: exploration,

appraisal, development, and production

(Fig. 1).Every stage carries its own

intrinsic risks and therefore attracts

different investors.

Investing in an asset starts with

the exploration and appraisal phase.

Typically, the asset is still very

immature. A company might own an

exploration license and a few km2of

seismic. Even though it is early in the life

cycle, management is already looking

for further funding. Its time to meet the

equity investors.

During the exploration and appraisal

phases, the developer wi ll be able

to raise financing mostly through the

equity channel. Equity investors are

generally aware of the limited success

rate, but are very keen to play the

game nonetheless. In these phases,

investors will focus on the potential

of the asset. For instance, a recent

study of international independent

exploration and production (E&P)

companies highlighted an average

dril ling success rate of around 35%

for wells bearing commercially

recoverable hydrocarbons.

Similarly, Schlumberger concluded

that two out of three wildcat wells in

frontier environments are unsuccessful.

Nevertheless, investors know a

commercially successful well can

generate massive revenues that will

largely cover their costs, and they

appreciate that independent E&P

companies can offer higher shareholder

returns. For instance, stock market

analyses have shown that the E&P

Financial Roadmap of an

Independents AssetMarc de Saint Gerand,Standard Chartered

Marc de Saint Gerand is a director in StandardChartereds oil and gas project and export finance team. He

focuses on structuring and advising on project finance and

limited recourse financing in the oil and gas sector, with a

dedicated focus on liquefied natural gas. De Saint Gerand

previously worked with the European Bank for

Reconstruction and Development and with Merrill Lynchs

Energy and Power team. He started his career as an

economist at Totals Gas and Power division in the companys Paris headquarters

and in Doha, Qatar. De Saint Gerand holds an MS in public affai rs from Sciences-Po

and graduated from the HEC Paris School of Management. He regularly teaches

petroleum economics and project finance at Institut Franais du Ptrole (IFP School)

and Sciences-Po Paris.

Source: Courtesy of Cove Energy. Time

Debt Risk

Hybrid Risk

Equity Risk

SuccessfulExploration

DevelopmentSuccessfulAppraisal

Production

Capital Required

Fig. 1Project life cycle. Courtesy of Cove Energy.


14/33


15/33

Economists Corner

is usually an interest rate based on

the cost of risk-free assets (much like

government gilts in the UK or T-Bills in

the US) and includes a risk premium

reflecting the strength of the borrower.

Unlike equity holders, most debt issuers

have to have a long-term horizon.

Debt investors could actually grant

a loan to an independent E&P for more

than 5 years, and they will have to work

together, with l imited opportunity to exit

before the end of the facility. Therefore,

debt holders will generally base their

valuation on more conservative and

longer-term assumptions. In other

words, when granting a 5- to 7-year

loan, a bank will check that, under

a conservative long-term oil price

scenario, the asset will have the

capacity to repay the value of the loan

plus interest.

From Theory to Practice:

Impact of the 2008 Crisis

Since 2008, the funding market has

changed. After 10 years of relatively

easy access to funds, the market shrank

considerably within a fai rly short period.

Beyond the macroeconomic impact,

the repercussions felt by independent

E&Ps were very much a function of their

assets development stages and the

trust bui lt between investors and the

management team. During chal lenging

times, markets generally experience a

flight to quality whereby companies

with a reasonably proven basis still

manage to attract funds but companies

overweight in pure exploration suffer

from a scarcity of resources. Investors

are likely to back companies with

the best management team, superior

assets, and best-in-class track record

and in turn reduce their exposure to

riskier companies.

Crises like the one in 2008 separate

independent E&Ps into two major

types. On the one hand, growing

independent E&Ps that were overweight

in assets at an early stage with little-

to-no production became more and

more inversely leveraged to oil. In

other words, they became subject to a

double negative impact: an increasing

cost of dril ling and development, with

direct competition from producing

assets, together with a funding market

becoming more and more risk averse

and selective.

On the other hand, E&Ps benefiting

from asset portfolios with existing

production bases st ill enjoyed

reasonable access to funds. For

example, E&P independents Kosmos

Energy and Tu llow Oil managed to tap

both the equity and the debt market for

significant amounts. Tu llow managed to

complete a USD-72.3-mill ion secondary

listing on the Ghana Stock Exchange

in July 2011 and comfortably sits on

USD 3.95 billion of debt facilities (out

of which USD 730 million were drawn

during the first half of 2011). Kosmos,

in turn, managed to raise around USD

600 mill ion on the NYSE and secured

a USD-2-billion debt facility in early

2011. It would appear that current debt

and equity markets are not closed for

business; nonetheless scarcity of capital

has forced key players to invest more

selectively and to re-focus on their core

businesses/clients.

Beyond MarketsPeople

Beyond the jargon, funding markets

reflect a simple asset analysis: equity in

the early stage followed by debt, with

some hybrid instruments in between

(such as convertible and mezzanine).

As demonstrated by the market over

the last 3 years, E&P independents are

facing new challenges as they are forced

to go beyond understanding what tools

are available at each development stage

and now have to entertain a network of

investors ready to back them during

good as well as more difficult situations.

Therefore, the constant challenge

for independent E&Ps is less to get the

magical sources of funds, but rather to

identify which market to access or which

investor or bank is likely to understand

its business and be available to be

mobilized at each stage of development.

In other words, to maximize value for

its shareholders, the management of an

independent E&P will have to regularly

beat the street to source the most

profitable source of liquidity for each

stage of its development. TWA


16/33


17/33

Pillarsof the Industry

the Standard Oil Trust. A lthough

the Standard Oil monopoly was

broken up more than 100 years

ago, the scale of todays industry

and its large firms continually

lead some to question whether

competition actually exists now.

Billion-dollar investments and

profits a re hard to comprehend.

A few famil ies beca me incredi bly

wealthy and we still see their

names associated with wealth,

phi lanthropy, and power.

2. The industry has boom-and-

bust cycles, often amplified by

regulatory responses. It has

witnessed job losses during the

busts and unequal d istribution of

benefits during the boom times.

Al l are incomprehensible to the

publ ic and they a ffec t certain

communities disproportionately.

3. The industry has had memorable

performance problemsthe

Santa Barbara oil spill in 1969, the

Piper Alphaplatform explosion in

1988, the Exxon Valdezoil spill in

1989, and the Macondo blowout

in 2010, to name a few. The

industrys ability to prevent and

respond to these environmental

and human disasters has not met

publ ic expectat ions.

4. Oil and gas are perceived as

old-world industriessmelly,

slow to adopt new environmental

technologies, often in denial

about climate change, and

stalling a rapid transition to a

green economy.

5. Gasoline prices are in your

faceprominently displayed on

the street and adding up quickly

as we fill our tanks. The general

publ ic does not trust markets to

respond appropriately nor does

it understand the lin k between

prices and global a nd loca l

markets. Especially in the US,

gasoline makes up a significant

port ion of household disposable

income for many familiesa

major concern because, for many,

there is no readily available

transport alternative.

6. The industry seems filled

with technically oriented

introverts most comfortable

with quantifiable measures

who believe that facts and

calculated risk weightings

should carry the day. It appears

to have less appreciation for the

importance of feelings, fears, and

relationship development.

The Industrys Response

and Challenge

The oil and gas industry has responded

by upping communication; regular

poll ing shows that the effor t to share

informat ion about what it does to

protect the environment, pay ta xes, and

create jobs is beginning to resonate

with the public and our reputation is

improving. Public trust in the oil and

natural gas industry has continuously

increased from a low of 38.6% in 2006

to 48.5% in 2012. Did you know that

shale energy development has created

1.7 million jobs in the US over the past

few years and is expected to account

for 3 mill ion jobs in the US by 2020? Or

that, according to the US Environmental

Protection Agency, there have been

more than 2.5 million hydraulic

fracturing treatments completed

globally without a single confirmed

case of water contaminat ion related to

hydraulic fracturing? Also, our industry

pays one of the h ighest effec tive tax

rates among US businesses, averaging

44.3% from 2006 to 2011 according to

Standard & Poors. Alleged subsidies

in the US in fact are identical or closely

analogous to tax deductions provided

to a wide range of industries.

The industry can and must do

better. SPE members can help improve

the industrys reputation. We must learn

to listen first, understand issues and

concerns, then respond by sharing

facts, doing additional research,

reporting progress, and continuously

improving. Our performance must be

unassailable and visiblewe must set

the standard for safety and protection

of health and the environment, all

while delivering competitive returns to

our shareholders.

This is not easy a nd requires

competencies that we have not

historically demonstrated at a sufficient

and consistent level. The public expects

a two-way conversation; we must be

visibly lis teni ng and car ingnot just

issuing 60-page white papers. We must

equip employees, contractors, and

suppliers alike with information and

training so we can engage in a fruitful

dialog with family members, friends,

and associates. We work in a business

whose basic purpose is noble, and

we should be neither apologetic nor

arrogant. When we make mistakes, we

must report quickly and transparently

with clear plans and commitments to

reduce the chances of a recurrence.

And we must learn from each other to

raise the bar for the whole indust ry.

We must move beyond rhetoric

and become valued members of the

communit ies in which we operate. Yes,

our business is complex and it is global .

Yet it is al so loca l. ConocoPhi ll ips holds

tours of our Eagle Ford operations in

Texas for stakeholders from around the

globe, engages with regulators, and

works with other companies to address

water issues.

We live in an ANDworld: We can

improve quality of life by delivering

reliable and affordable energy supplies

while alsoprotecting the environment

ANDcreating jobsANDimproving

community life. Our industry is high-

tech and excitingwe have a bright

future. We need to share and applaud

progress when we reduce our air,

water, and land footprint while working

with universities, regulators, and civic

leaders to address growing challenges

and expectations.

We can be engaged w ithout

seeming arrogant, dismissive, or

defensive. The oil and gas industry

faces opponents who are well-funded

and well-organized but sometimes not

well-informed about the petroleum

industry. Despite the apparent

unfairness of their approaches, we

cannot abandon our principles. The

scientific methodestablishing

testable, repeatable results that

demonstrate cause and effectis


18/33

important. Yet we can also seek diverse

views and respond to quest ions in

more easily accessible ways. Emotions

matterwe must be prepared to

address fears, mistrust, and negativity

in constructive ways and encourage

fact-based dialog.

Relationships are built on trust and

take more time to build than lose. SPE

helps with its Energy4me educational

outreach program to engage kids in

schools and help educators learn more

about the oil and gas industry and how

it responsibly finds and delivers oil

and gas to consumers. We can each

start by educating ourselves. Take

advantage of the myriad websites

devoted to providing information on the

issues and get smart about both sides

of contentious issues. Sites that our

industry views as factual are provided

by the US Department of Energy, the

Amer ican Petroleum Institute, the

International Energy Agency, and most

international producers. Take time to

ask questions and find out what your

company is doing to be responsible

in its planning, operations, and

community interactions.

Watch Switch: The Documentary

and visit Switch: The Energy Project

educational website. See the more

visceral views expressed in fi lms like

Gasland, Promised Land, Truthland,

and Fracknation. Explore the Energy

in Depth site to learn more. Evaluate

the claims of each based on your

training and the bounds of science.

When a socia l acquaintance expresses

fear about the oil and gas industrys

activities, take a deep breath, ask

questions, listen, and be ready to share

what you and your company are doing

to address concerns. We are part of

a continually learning and evolving

industry that is committed to operate

to high standards, regularly verifyi ng

compliance and engaging effectively.

Our industrys ability to operate

relies upon our performance ANDthe

publ ics percept ion.

At a recent family reun ion in Iowa,

my cousin from California asked

what I thought of the stor ies about

fracturing and environmental mayhem

possi bly coming to Cal ifornia. I had

to stop myself from launching into a

diatribe citing my recent visit to a well-

organized drill ing and completion

site, my companys commitment to

responsible development, and the

economic benefits for consumers in a

state badly in need of revenue. Instead

I asked, What are you hearing?

This opened a conversation about

the industry, sources and validity of

information, and ways to consider

messages and the motivation of the

messengers.

We have moved from a 20th-century

view of constrained resources and

limited opportunities to abundant

resources but constrained public

support. Genuine and respectful

curiosity, patience, performance, and

proact ive behav ior can humanize

our industry and improve public

percept ion. We do l ive in a new world

where there is litt le tolerance for error.

Wouldnt it be great to have a video

go viral about our industry creating

a million jobs in 5 years without an

environmenta l incident? Id like to

Tweet that. TWA


19/33

SPE101

Have you ever thought about how SPE

accomplishes all it does? Meetings,

conferenceseven the magazine

youre holdingal l are created largely

through volunteer efforts. The pass ion

and dedication of these volunteers are

essential to making SPE function and

helping it grow.

On top of their regular jobs and

personal l ives, why do thousand s of

volunteers around the world share their

time and expertise helping organize

events and promote SPE activities?

These professionals understand that, in

addition to being an opportunity to give

back to their communities and to their

industry, SPE service yields a number

of professional and personal benefits.

How so? Read on.

Every SPE member knows the

power of networki ng. A s the pu blic

face of SPE, volunteers have an

enhanced opportu nity to meet new

people, make friends, and develop

contacts that are beneficial both

personally and professional ly.

Yufa Safitri, Bal ik papan Section v ice

chair, says, Balikpapan is a tight-knit

oil and gas commun ity. By volunteering

with SPE I get to know ma ny

professiona ls o f va rious backgrounds

from different compan ies.

As volunteers move out of their

comfort zone, they often discover

meaningful, long-lasting friendships in

addition to the anticipated professional

exposure to new techniques and

technologies. Since SPE is an

international organization, many

events involve coordination among

people with significant d if ferences in

education and cultural background.

Often volunteers work together across

oceans and ti me zones. It can be quite

a learning exper ience to discover how

to negotiate all these elements to pull

off a successfu l event!

Volunteers lea rn to appreciate

other team members views and

strong points, working together to

deliver resultsall of which make

these volunteers more valuable to their

employer in their day-to-day job.

SPE volunteers also learn to refine

their communicat ion and presentation

skills, showcasing their ideas and

gaining their colleagues support.

They gain confidence from presenting

in publicpracticing reading an

audience and leading discussions to

keep listeners engaged.

Natasha Legge-Wilkinson, YP

Commit tee member in the New South

Wales SPE Section, says, I t ca n be

quite un nerving to hold a presentation

for high school and college students.

Over time Ive gotten a better hold of

it. Ive also learned to find means to

pique their interest and to encourage

their participation.

SPE is an excellent foru m for

YPs to practice and improve ti me-

management skills. For instance,

since it can be di fficult to schedule

meetings with several volunteers,

YPs lea rn to treat time with team

members as precious. YPs also lear n

the importance of accomplishing

tasks without holding up others. Most

important ly, since volunteer YPs are

balancing professional, family, and SPE

obligations, they learn how to prioritize,

stay focused, and get things done

efficientlyvaluable skills that come in

handy in the professional environment.

SPE always needs volunteers to

coordinate details of conferences and

other events. Most companies support

attendance for those serving on event

committees, so you can increase

your chance of attending technical

conferences and forums through

volunteering. Some sec tions even

have programs to send exceptional

volunteers to these events as a

recognition award.

Typical ly, YPs do not get

professiona l leadership opportunities

until several years i nto their career.

Within SPE, Y Ps can beg in serving as

leaders after little time in the industry.

It isnt unusual to see members of YP

committees or section boards with

only 1 to 2 years industry experience.

And volu nteers can quick ly progress

to significa nt leadership roles in the

section or on other SPE commit tees.

When it comes to rsum-bui ldi ng

and performance reviews, SPE service

is usually considered a positive point.

Volunteers burnish a companys public

image, build their own skills and

experience, and raise their profile as

self-starting individuals willing to go

the extra mile. That said, its critica l

to remember that professional duties

come first. Its critical to ensure you

have your supervi sors support before

taking on SPE volunteer roles.

As SPE grows, so does the need

for new and continuing volunteers. Is

there something you think your section

should try or something that could

be done better? Take action! Act ive

volunteers forge SPEs path for ward in

concert with other members.

The best way for YPs to start

volunteering is by get ting in touch with

their local SPE section, which almos t

always has an ongoing need for help

with regular section functions, local

conferences, fundraisers, and so forth.

At SPE events, ask a bout

opportunities, or visit www.spe.

org/sectionsfor officer contact in fo.

YPs who want to further expand their

par tic ipat ion can check www.spe.

org/volunteerto review additional

opportunities.

Have you volunteered with SPE? If

not, what are you waiting for? TWA

SPE Needs You, and You Need SPE:

Why and How to VolunteerThresia Nurhayati


20/33

1Vol. 9 // No. 2 // 2013

Discover a Career

Petrophysics is the study of the

properties ( physica l, electrical ,

and mechanical) and the rock/fluid

interactions of petroleum systems. In

the oil and gas industry, the geologist

and the geophysicist set out to define

a reservoir prospect target from a

structural perspective, while the

petrophysicist fills in the deta ils

regarding the reservoir rocks fabrics

and fluid content. They achieve this

by collecting data at the drill ingstage using dril ling, logging, coring,

and testing tools for measuringat

bottomhole or surfacerock and

fluid properties.

What Does a Petrophysicist Do?

The search for hydrocarbons begins

with a regional understanding of the

prevai ling geology in a geologic basi n,

where the geologist gives an account of

sedimentary sand deposition. After the

geophysicist conducts seismic surveysand data processing, risky wildcat

exploration wells may be drilled to

test the best geological and seismic

structural model. If a hydrocarbon

discovery is made, data must be

collected to evaluate the scale, quality,

and quantity of the discovery.

The petrophysicist then steps

in, performing tasks that have

direct bottom-line significance. The

petrophysicist needs to use al l of the

wells directly measured data, which

can be very limited, to construct

as robust a reservoir model as

possi ble. Table 1gives a peek at the

petrophysicist s usual toolk it and job

description, where every act ion item is

about a direct touch with the reservoir

rocks and fluids.

The petrophysicist participates

at the drill ing stage by examining

rock chips and cuttings brought to

the surface by the drilling mud and

recording oil and gas shows at the

borehole for all respective lithological

and stratigraphic intervals. Then,logging-while-drilling (LWD) or a

wireline-logging program, designed

by the petrophysicist, is used. This

should enable him or her to identify

pay columns, di fferentiate oi l-/gas- and

water-bearing formations, and estimate

porosity and hydrocarbon amount.

Because wireline logging means

sending measurement equipment

downholetypically into a deep,

dark, and dirty environment, where

drilling mud causes near-wellboreinvasion and logging tools suffer

from problems of resolution, shallow

reading, or ambiguous responsea

handson approach with the rock fabric

is required. The petrophysicist orders

coring jobs and brings f ull-diameter

core barrels or side-wall core plugs to

surface. Core analysis is performed

in a laboratory. Conventional core

analysis not only validates lithological

sequences and depositional

environments but also gives details

regarding rock mineralogy content

captured in the prior log interpretation

panel. Laboratory analysis of core

samples also gives an independent

assessment of porosity and

permeabi lity, which is used to ca librate

log-based interpretation models. A

typical product exhibits tracks of

gamma-ray, caliper, and neutrondensity

porosit ies; resistiv ities of di fferent

invasion depths; core porosity

and permeability; and perforation

recommendations. This leads to further

evaluations of key pay intervals andestimations of their flow potentials.

If the discovery wells preliminary

assessment is encouraging, appraisal

wells may be drilled to quantify

the reservoirs lateral and vertical

extent. The petrophysicist will build

crosssection models; delineate spatial

distribution of each stratigraphic

interval; and characterize the

reservoirs quality, extent, and integrity.

Only two technical numbers usually

matter for oil companiesresource/reserve volume and production output.

The petrophysicist is expected to

eventually help come up with the

best estimate and sensitivity analysis

of hydrocarbons-in-place, known as

stock-tank oil i nitially in place/initial

gas in place (STOIIP/IGIP). These

estimates paint a picture of the reward

size so business decisions can be

made to either carry on exploration

and appraisal activities or de-risk

them by farming out. The STOIIP/

IGIP estimation exercise demands the

petrophysicist s best judgment on a

handful of key parameters that speak

for the reservoiraverage porosity,

pay column height (gross and net),

initial hydrocarbon saturation, and fluid

contact level.

Petrophysics vs.

Formation Evaluation

For any discovered hydrocarbon

volume, on ly the producible port ion

Discover a Career: PetrophysicsAndrew Chen andRonald Pagan, Shell Canada

Andrew Chen works with Shell Canada on various light t ight

oil and liquids-rich tight reservoir projects, including

business development, exploration drilling, and asset

maturation activities. He has more than 20 years professional

industry experience at BP, AJM Deloitte, and Schlumberger,

and as an international consultant. Chen earned BS and MS

degrees in petroleum engineering from East China

Petroleum Institute and a PhD in mechanical engineering

from the University of Manitoba, Canada.


21/33

Discover a Career

counts. This is where the petrophysics

discipline meets the formation

evaluation discipline. Addressing

the producibility of part of or the

whole reservoir and evaluating

recovery efficiency ultimately provide

values for the recovery factor a nd

product ion output.

The petrophysicist provides

qualitative descriptions of pay potential

from log and core analysis. Rout ine coreanalysis identifies goodquality porosity,

porosity types, permeabi lity stat ist ics,

and possible natural fractures. Special

core analysis (SCAL) offers details of

capillary pressure behavior, wettability

patterns, favorable/unfavorable

product ion drive mecha nisms, and

laboratory-based recovery efficiency

assessment under conceivable

development options.

Even with the static nature of log

interpretations and the lack of in-situ

reservoir conditions in laboratory work,

all the petrophysicists work is acceptedby reservoir and production engineers,

who turn to focus on the dynamic or

flow nature of formations. A flow test is

designed and carried out to observe

the wells flow capability and formation

product ivity index. Flow and pressure

buildup data are analyzed. Good

interpretations mean that the data from

the flow test are explainable by the

petrophysica l view on pay thickness,

average porosity, hydrocarbon

saturation, reservoir container setup,

and other descriptions.

Well test ing is sometimes performedto detect the minimum connected

drainable hydrocarbon volumes, if

STOIIP/IGIP cannot be determined, in

order to pass certain business hurdles.

Such exercises require a tremendous

integrated effort both from geoscientists

and from engineers to reconcile

and explain the volume differences

between a seismic container and a

hydraulically drainable compartment.

In order to optimize the

development options of an established

asset, the reservoir engineer builds

Ronald Pagan is petrophysics discipline leader at Shell

Americas and ma nager of Shel l Canadas Early Maturation

team. Over a more than 30-year career at Shell, he assumed

various petroleum engineering roles in New Orleans, Oman,

Canada, and the UK. Before his current roles, he was Shell

Canada petrophysical technical chief (1997 to 2007). Pagan

earned a BS in geology from Edin burgh University and an

MS in petroleum engineering from Heriot-Watt University.

Table 1Petrophysics Data Domains and Subsurface Collaborations

Category Data Type and Source Ownership

Mud Logging/DrillingPore pressure predictions; gas or oil shows during

drilling; drilling-mud and cuttings analysis

Wellsite geologists/

reservoir engineers

Well Logging and LogInterpretation(mostly openhole wirelinelogs, but increasingly LWD)

Mechnical logs (calipers); electric logs (laterlog,induction, spontaneous potential, resistivity);natural-radiation logs (simple and spectralgamma rays); artificial-radiation logs (densityand neutron); acoustic logs (sonic); imagelogs (dipmeter, micro-image resistivity);special logs (NMR); temperature log

Primarilypetrophysicists

Coring and Core Analysis

Mineralogy, lithology; hydrocarbon

shows, porosity, permeability; SCAL(wettability, capillary, core flooding)

Primarilypetrophysicists,with geologists andreservoir engineers

Formation Testingand Sampling

Formation testing for pressure stratigraphicalprofile; fluid type validation and sampling;drillstem or production test

Reservoir engineers

Cased-Hole Logging

Production logging (pressure, spinner, densimeter);formation evaluation logs (neutron, acoustic,cased-hole resistivity); casing/wellbore integrity

logs (bond logs, temperature, ultrasonic)

Production/reservoirengineers


22/33

2Vol. 9 // No. 2 // 2013

HRDiscussionContinued from page 9

a reservoir simulator with the

petrophysicists entire data package,

to forecast the number of wells

to be drilled within the reservoir

and their estimated production

performance. The production output

forecast, checked against the project

economics and investment matrix,

goes into development planning and

reserve booking.

A Petrophysics Career i

the way ahead vol.9 n.2

Documents