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Oil, gas industry tries to keep talent in pipeline

By David Conti

Four years ago, Bryan Dickson and Matt Ockree were among the youngest engineers working on gas well pads in Western Pennsylvania’s Marcellus shale fields.

“I was out in the frack van with Bryan a lot of days and a lot of nights, learning from the people with more experience,” said Ockree, 27, a Lower Burrell native, recalling the training he received in trailers where engineers control the hydraulic fracturing of wells.

Ockree interned with Range Resources Corp., which hired him before he graduated from Penn State University’s petroleum engineering program. He now oversees the Fort Worth-based company’s internship program.

Dickson, 29, a Washington County native, was promoted to Northeast division engineering manager after less than five years at well completion company FTS International. He supervises the latest generation of engineers.

They’re part of what the expanding oil and gas industry calls the big shift change. Drilling veterans in their 50s and 60s, who cut their teeth on an oil boom that ended before these two engineers were born, are nearing retirement.

Many industries face the dilemma of replacing large groups of workers who are preparing to retire, especially in Western Pennsylvania where baby boomers outnumber 25- to 45-year-olds by about 130,000, according to the Allegheny Conference on Community Development.

“It’s probably more acute in the energy industry,” said conference CEO Dennis Yablonsky.

Twenty years of bust in the drilling business before the shale revolution gave Generation X little reason to pursue petroleum engineering degrees or jobs, leaving a gap between the dwindling number of boomers and a big batch of twentysomethings with high-tech knowledge, industry leaders say.

“We’ve been working pretty hard over the past … five years, to get past the baby boomer experience level and to fill that gap before it arrives,” said Nigel Hearne, president of Chevron Appalachia.

San Ramon, Calif.-based Chevron, Pennsylvania’s 10th-biggest gas producer, announced last month that it would spend $20 million on programs to teach school children and train college students in Appalachia to eventually fill the industry’s high-demand jobs.

A third of the 115,000 oil and gas extraction workers nationwide are between 25 and 34, pulling the median age to 38.6, according to the Bureau of Labor Statistics. That’s younger than any agricultural, mining, construction or manufacturing sector.

“There’s a pretty big gap in age between the senior management who are, like, 55 to 60, and us. A huge gap,” said Dickson, whose company has nearly 700 employees in Pennsylvania.

Bridging the gap

John Applegath remembers when a generation of World War II veterans ceded control of the industry to baby boomers. He recognized the latest shift a few years ago.

“We’re better prepared to handle it than in the past,” said Applegath, a 38-year veteran of the industry who leads Range Resources’ southern Marcellus division. “We’re embracing it. We’re doing a lot to get these younger folks up to speed.”

At its Cecil office, Range Resources, the state’s most prolific shale driller, holds meetings geared toward addressing generational differences between workers. More than half of the company’s 1,000 employees are younger than 45.

The older generation is more company-minded and expects to put in time before getting a say in big decisions, but “younger people, as soon as they feel comfortable, they’re looking for when (they) get a seat at the table,” Applegath said.

“I’m glad to see that kind of aggressiveness,” he said. “I like to say, ‘I’d rather use the rein than the spurs.’ ”

Companies are wise to embrace the new generation, said Josh Hickman, founder of Young Professionals in Energy Pittsburgh, whose monthly networking events are called Crew Changes.

“When you want to take that retirement, who’s going to watch over your pensions, your stock?” said Hickman, whose Canonsburg-based Hickman Geological Consulting contracts with energy companies and landowners.

Younger workers want to know they have room for advancement, he said. They need exposure, though, to experienced mentors and some old-fashioned networking skills, which his group helps facilitate.

The growth of the drilling industry allows for some instant gratification for new hires, young workers said.

“It was boots-on-the-ground right away. You’re right in the business fast,” said Carrie Schimizzi, 27, of Latrobe, a land agent for Range Resources, who joined the company once she graduated from the University of Pittsburgh with a law degree and discovered the “dismal” job market for lawyers.

Amanda Lyle, 24, of Shaler is five years younger than Dickson, her boss at FTS, but she is training new engineers after less than two years on the job.

“My friends in chemicals and plastic industries aren’t moving that fast; they don’t have that potential,” she said.

Interns and mentors

To feed the pipeline of young workers needed to replace retirees, companies are focusing on internship programs and other partnerships with Pennsylvania schools, including Penn State, where the petroleum engineering program is graduating nearly 200 students per class.

“I was always told that I would have to leave Pittsburgh to find a really good job, but now I am here at Range and I could not ask for a more amazing job coming right out of college,” said operations engineer Wade Lipscomb, 22, a Stanton Heights native who interned with Range Resources while attending Penn State.

Range Resources brings in 12 interns a year and has hired nearly three-quarters of them, said spokesman Mark Windle.

Houston-based Cabot Oil & Gas Corp., Pennsylvania’s second-largest shale gas producer, this year gave $2.5 million to Lackawanna College to endow the petroleum and natural gas program that the Susquehanna County school established five years ago. Cabot has not started to experience the generational shift, but it expects to.

The endowment “ensures there’s a quality college nearby to supply those workers we will need,” said Cabot spokesman George Stark.

Once hired, young workers get intense field work — new Range Resources engineers live on drilling rigs for 12 days at a time — and lots of time with experienced supervisors. At FTS, all engineers spend three to four months with mentors.

“We want them to know they have the backing of the full resources of the company,” FTS spokeswoman Pam Percival said.

That kind of attention could mean the difference for companies trying to attract or keep a generation of workers noted for wanting to know what’s in it for them, Hickman said.

“Some companies have the capacity to make changes and make those adjustments,” he said. “Others might realize it, but they’re unwilling or unable to make the cultural shift.”

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Article Source: Conti, D. (2014). Oil, gas industry tries to keep talent in pipeline. Retrieved from

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Oil refinery

Oil and Gas Production: Digitizing Oil Fields

By Brian Sallery

Previously I delved into digital communication standards now commonly used within the oil industry and the importance of sharing real-time operational data between data centres and contractors.

There is also a strong move towards a completely digital virtual oil well operated and controlled by a minimum of workers, but why are companies spending millions to develop and integrate these virtual systems?

Oil prices consistently rise year on year, even when the stock markets crash, oil is always one of the first commodities to recover its costs. However the industry has always faced a shortage of skilled workers for the many areas of hydrocarbon production. It has been estimated that over 100 million barrels oil will be needed everyday by 2015 and with this amount of supply required many more engineers, geologists and rig workers will be needed. In many African countries experts are used due a lack of skilled local workers, therefore the idea of a digital oil field turns from the realms of fantasy, to now becoming reality. So what is meant by the term digital oil field (DOF)?

Software is now available to capture the daily operations and behaviours of an oil rig and can be used to manage the whole production lifecycle.  Such software should allow for a full visualisation of the reservoir and the wellbore. This enables managers and engineers to see real-time monitoring and control data offsite, real-time drilling data which should include down-hole pressures, drill directions and rotational speeds.

Furthermore Real-time surveillance will trigger alarms when production integrity has been breached. This allows companies to fully audit operations and procedures. Booz&Co reported that one company had introduced selected oil field technologies and has saved a massive US$20 million annually by automating data storage facilities, data integration across multiple systems and wellbore visualisation by using fewer but more skilled staff, located at a central control centre.

If such savings can be made why are the technologies not being taken up by every petroleum operator? Many smaller organisations are simply unable to absorb the initial implementation costs or have the forethought to properly use the available software.

Often when a new system is required it causes a ripple effect over the current system while it is being integrated into working practices. From my experience managers often struggle with new technologies, both with their effectiveness and implementation.

Furthermore workers at the ‘coalface’ can be resistant to change asking questions like ‘I have done it this way for years why should I change now?’ and this can be a major drawback to the implementation of a virtual digital system.

The whole point for a digital oil field is to help tackle some of the following areas: Supporting staff development allowing for functional specialisation of assets and operations. Supplementing an ageing workforce where oil workers with years of experience are able to move into a less physical role as they age but still utilises their immense knowledge.

Modern oil fields have a large amount of data to process with sensors being placed on almost every piece of equipment and a digital oil field brings with it the advantages of visualisation software. Also the risks and uncertainties are reduced if not eradicated due to the use of workflows and risk prediction algorithms. The problems of a lack of skilled workers are also eased as computer integration usually allows one person to do the work of many.

Finally information and knowledge is easily exchanged with organisation that have different specialism, tasks and agendas which may be very different from the main oil production skill set of the operator.

However there are issues to consider as with any new technology one must first decide on what aspect to digitise. With so much data and information to be processed a company can be quite literally overloaded and as a result paralyse a company’s decision making processes instead of helping them be more proactive with decisions.

Therefore it becomes necessary to carefully select or ‘cheery-pick’ the data required for specific information goals. The problem is if you record all available data then storage costs become prohibitive and the times required to process and sift through to find something relevant increases with every upload.

Alternatively by only selecting certain types of data, you risk deleting information that might have intrinsic value to the company. So good visualisations are vital, which allows complex data to be shown in a graphical format to simplify the decision making process.

Oil rigs produce huge amounts of data on a daily basis, so it is not about implementing digital technologies but how oil companies use it to communicate the right information to the right people in the field. The Chevron Machinery Support Centre (MSC) looks at real-time data distributed over 6 continents from Kazakhstan to Colombia they monitor 65% of the U.S gas supplies. At their hub computer operators, overview a number of computer monitors looking for distribution paths to meet current gas supplies and to check for system alerts. Recently one of their African drilling operations started to overload.

An alarm immediately alerted the controllers of a compressor problem at MSC some 6000 miles away from the original incident; this allowed the fault to be found and resolved quickly without any injuries to the workforce and saved millions of dollars in possible production downtime.

Chevron has now implemented a number of digital systems to its upstream operations one of which is called Upstream Workflow Transformation (UWT) which has taken decades of investment and development to produce, but is now at the forefront of its digital campaign.

As a way of combining IT, automation and instrumentation technologies DOF software offers many benefits from faster reservoir production and analysis, increased workforce safety and operational management through the use of workflows, as long as data is properly analysed and filtered to give expected results for manager and engineers to make timely and accurate decision.

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Article Source: Sallery, B. (2014). Oil and Gas Production: Digitizing Oil Fields. East African Business Week. Retrieved from

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Shale boom weans U.S. from foreign oil, creates new opportunities

by Rhiannon Meyers

The U.S. may be producing more of its own oil than it has in decades, but it’s unlikely the nation will fully wean its dependence on foreign crude anytime soon.

“We will deeply remain an importer of crude oil for the absolute foreseeable future,” Greg Haas, director of integrated oil and gas research at Stratas Advisors told a group gathered at the Dallas Federal Reserve Bank on Thursday.

Although the U.S. is far from achieving anything close to full energy independence, the rapid resurgence in domestic oil and gas production has slashed the nation’s reliance on foreign oil in a short period of time, Haas said.

In 2006, about 70 percent of U.S. consumption came from other countries, notably Mexico, Venezuela and Canada, Haas said. But the uptick in domestic drilling has caused that pendulum to swing to less than 30 percent last week, according to the U.S. Energy Information Administration, which predicts that number to fall even further in the next year, Haas said.

With the U.S. relying less heavily on energy imports, other countries are taking notice, watching to see how the nation will take advantage of the vast new supplies of oil and gas, Haas said.

A long-standing government ban on crude oil exports created a bottleneck within U.S. borders, but that glut of oil and gas has generated new opportunities for midstream and downstream companies. For example, Haas said the proposed new infrastructure to bring natural gas liquids to market is the “highest growth market I know of, even exceeding that for crude oil.”

Haas said his company has identified more than 600 proposals to build new processing plants, fractionators, pipeline expansions and export facilities.

“Every day, you see a new announcement,” he said.

But he was particularly interested in condensate splitters, which are new innovation to the U.S. and can process a very light oil for a fraction of the cost  to build a new refinery. These projects pose an interesting opportunity for U.S. companies because the federal government recently ruled that condensate can be shipped overseas with minimal processing, Haas said. Two companies, Pioneer Natural Resources and Enterprise Products Partners, have received permission to export condensate.

The refining sector is another key area to watch, Haas said, noting that there’s been a surge of announcements of refineries for sale. Venezuela has said it may be considering selling its Citgo refineries along the Gulf Coast and a Korean-based company has expressed interest in offloading a high-cost refinery in Nova Scotia that has been running a deficit for years, forced to process Brent oil, the more expensive international benchmark crude because it lacks the pipeline infrastructure to bring in cheaper U.S. tight oil, Haas said.

The biggest game-changer, however, may be a refinery in St. Croix in the U.S. Virgin Islands, which has been mothballed since 2012, Haas said. The 500,000-barrel per day refinery, which has the capacity to process both light and heavy crude, isn’t subject to the Jones Act, meaning it costs less to ship products to and from the plant than it would inside the United States, Haas said.

The plant recently announced that it’s found a buyer, although declined to provide further details, and if it gets restarted soon, it could become a big new outlet for U.S. oil, Haas said.

Article Source: Meyers, R. (2014). Shale boom weans U.S. from foreign oil, creates new opportunities. Retrieved from

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