Letters

July 17, 2000
I would like to respond to OGJ's June 19, 2000, editorial, "The lay-off legacy."

Career opportunities

I would like to respond to OGJ's June 19, 2000, editorial, "The lay-off legacy." I have seen a number of these articles chastising management about the layoffs and position liquidation over the last 15-18 years or so, but I have not seen any let up in regards to layoffs. Nor have I seen any real evidence of hiring other than chasing one professional from one organization to another.

Company B hires Employee A from Company A, Company A hires Employee C from Company C, Company C hires Employee from Company D, etc.

This looks like a lot of hiring but basically it is just one position going from company to company.

There is a little hiring from the universities, but it is not enough to ethically and morally encourage people to specialize in the disciplines feeding the oil industry.

In fact, most chemistry and chemical engineering departments have gone to biochemical, biomedical, and material specialty areas and have left the petroleum industry (at least the upstream side) as a dying industry. The industry could still use the skills and abilities that these individuals have.

The main reason I write is to report what I have seen personally. After I got my BS in chemical engineering, I worked for a major oil company for 8 years in the waterfloods of West Texas. I survived one forced and two or three volunteer layoffs. After the last layoff I decided to go back to school to obtain graduate degrees, since I thought advanced technologies and the ability to develop and apply them would be required in the future. With this in mind, I obtained an MS in petroleum engineering and a PhD in chemical engineering.

How wrong I was. The oil companies have closed down virtually all research facilities or so severely crippled them that they are really incapable of doing any real development of technology. The service companies don't seem to be doing a lot of development work either. Even with all the high technology rhetoric, predecessors of the so-called "new high tech age" have been with the industry since the '80s and before. In attending some SPE distinguished lectures on various subjects I see the same concerns, same questions with little conceptual changes in technology that we were asking in the 1980s.

The petroleum industry is very adept at adapting technology for its purposes (and claiming that it invented it). Even individuals who find unpatented technology, concepts, and ideas within the industry claim these as there own "original" contributions. Seismic came from earthquake research or cold war DOD research to track opponents weapon development, submarine movement, etc. Computer and GIS in many ways was always with the petroleum industry. In the 1980s, I used to plot reservoir and production parameters via computer mapping routines at various depths and reservoirs to obtain "visualization" of problems, etc. This was unpopular with management at the time, because engineers were hired for their analytical abilities not for playing on computers.

After sending nearly 300 or more resumes out to just about any oil company small, medium sized, and large (both independent and major) I have yet to land a job/career. These have been for both solicited and unsolicited positions. There have been three basic replies (when you can get HR or managers to acknowledge that they received them):

  1. "While you were getting your graduate degrees the technology leaped over you and we are so advanced that any experience you had is antiquated." Give me a break. As far as I know, except for the far reaches of time and space and perhaps at the quantum level, Newtonian physics and the three laws of thermodynamics are still valid. As I said before, the petroleum industry adapts most of its technology and knowledge from other industries-including significant amounts of computer technology.
  2. "You will be bored with the engineering positions we have." Excuse me, but isn't this diametrically opposed to the former excuse.
  3. "We were wanting a younger (we should say less experienced) engineer in that position." Now this is probably the most true excuse of them all. In some ways, it is the most understandable also. The oil and gas industry hasn't hired a significant number of younger engineers in a long time. The graying of the petroleum industry is catching up with it. However, laying off people and turning experienced people away isn't going to solve your problems.

A part of the OGJ article talks about people not wanting to return. I believe I have seen this in other professional Journals also. I think I would ask: "How would a person return? Why would a person return?" And what reception would they get? I do not believe I have been welcomed back. I don't believe I ever left the industry but was forced to seek other livelihoods and gain additional skills and abilities that are applicable to the petroleum industry. However, it appears that this is an extremely sinful thing to do in the petroleum industry.

One thing that puzzles me is why management and companies want specialist formation and location petroleum engineers. By this, I mean they want people who have worked in a specific formation, a specific location, doing very specific work. Engineers and geologists used to be thought of as innovative, with the ability to go from place to place sharing their knowledge and expertise. Now, if you have worked overseas or in South Texas, West Texas, New Mexico, or Oklahoma, that's where you have to stay. It would be about like having to work only within a few hundred square mile area all your life. I think the concept of engineering has been eroded here with closed mindedness.

Please forgive my rambling, but I thought I might give you something to think about in regards to the subject of layoffs. Thanks for listening.

John David Rogers

Third Oil Shock

Kudos to the Connell, Ormiston, Amott, and Cullum scientists for a lucid presentation of the Tengiz development project.

With regard to the 'Third Oil Shock' article (OGJ June 12, 2000, p. 64) and related articles by Mr. Verleger, Ms. Emerson, and CGES staff, let me say this about that.

No surplus avails exist in Saudi Arabia, Iran, or Kuwait. Some of us who developed those giant and supergiant reservoirs are still among the living. We remember what we did. We drilled those wells, looked at the electric logs, and studied the structure and isopachous maps. We put the wells on production and worked them over when they went to water or gas. All of those fields are now in irreversible decline. The story is short and simple. Rising water in Saudi Arabia. Expanding gas caps in Persia. Permanent war damage to the Burgan in Kuwait.

In the Middle East, extra capacity exists in Iraq alone.

Once these truths are realized and accepted by the soothsayers, the quicker we can address the acute need to develop petroleum products at reasonable prices.

Those kings, imams, and satraps are without clothing, standing naked in the blowing sands.

Linton Morrell
Biarritz, France

Experience drain

There is a lot of truth in your (OGJ, June 19, 2000, editorial) "Lay-off legacy." However, there were consequences for those layed-off during the different "purges" you have not mentioned.

In the early '90s, I had to close several overseas offices and sell the related exploration and production operations. What happened? Good exploration, operations, production, and support personnel were terminated with little hope and opportunity of a new job or of putting to good use their considerable expertise.

Technical files were put into storage where they accumulate dust or were even shredded. The people who knew these files, had worked with these data, and knew a lot of the ifs, whys, and buts, are now not around to put these data to good use. And certainly, too often the wheel must now be reinvented by training new staffs who lack the insights. Even worse, those workers with large experiences worldwide are not even wanted to fill the knowledge gaps.

This is my own experience. Shortly and for a very short period after I was out of my liquidation job, after over 30 years of exploration experience internationally with large US and Canadian companies, I was asked on a consulting basis to godfather young staff members on fact-finding missions, or was on World Bank missions, etc. But now these sources for meaningful contributions to oil and gas exploration have inexplicably dried up. The impression is that experience for having seen and touched rocks and worked on the integration of geology, geophysics, and test/production data is no longer wanted.

I am not alienated and would gladly stay in the business-and with four languages spoken and written fluently I certainly could continue to make valid and good contributions, without causing training costs. Surely, I am not the only such case.

Roland F. Schwab
Roggwil, Switzerland

Special report on oil price

Philip Verleger's report on a third oil price shock in (OGJ, June 12, 2000, p. 76) is interesting and informative. It should be appreciated, however, that oil price shocks have been closely connected to more than two recessions.

The ten poorest growth years in the post-1946 period have all followed a year-year increase in the price of domestic crude oil of 5% or more and an anemic increase in June-December industrial production amounting to 0.1% or less.

For a look at the data, click on to Table 6.1 in my essays on the business cycle which can be accessed at http://www.albany.edu/cer/bc/.

Edward Renshaw
University at Albany
New York

Energy's moral imperative

I concur with the article "Energy's moral imperative" (OGJ, June 19, 2000, p. 17) but, I suggest that you did not address the core issueellipseperhaps too politically incorrect.

The core issue is that there are too many people on the earth today. The energy industry does, indeed, have a moral imperative to arrange for commercial energy sources to be available to the 80% of the impoverished population. However, the end product of this and, the only reason for doing so, will be the declining birth rate which results from the living standard upgrade. Once that problem is addressed, we can bring our resources to bear on the sustainability of the energy supply.

John P. Platt Jr.
Cat Spring, Tex.