SPE: Technology transfer, workforce globalization seen meeting looming staff shortfalls

From retirements and attrition, the petroleum industry will loose 50% of the petroleum engineers in today's workforce during the remainder of the decade.

Oct 3rd, 2002

Mike Sumrow
Drilling Editor

SAN ANTONIO, Oct. 3 -- From retirements and attrition, the petroleum industry will loose 50% of the petroleum engineers in today's workforce during the remainder of the decade. Too few engineering graduates will emerge to fill the ranks, according to Raul Ortiz, president of Raul Ortiz & Associates, Houston.

Addressing the Society of Petroleum Engineers annual conference in San Antonio Wednesday on processes for technology transfer, Ortiz said, "This is happing at the same time that companies are engaging in (an increasing number of) growth projects around the world." To alleviate the shortage, he said, the petroleum industry must increasingly incorporate developing-country nationals in strategic-growth project teams.

Ortiz said that, from 2000 to 2005, deepwater capital expenditures alone areprojected to double to $10 billion/year, adding that there will be more project growth than just in deep water. He explained that developing nations would experience many large capital-expenditure projects, citing examples of gas projects in Southeast Asia, Northern Africa field developments, Venezuelan heavy oil, and various projects in the former Soviet Union around the Caspian Sea.

New exploration and production technologies will continue to improve individual and corporate productivity. Ortiz noted that technologies such as faster computers, 3D visualization, smart wells, and increased automation and new training concepts such as web-based learning would mitigate the technical worker shortage. He said, however, "I don't think (these technologies) are going to solve the problem."

In the arena of workforce globalization, Ortiz said he believes that the oil and gas industry has not progressed as it should have. He noted that most of the workforce projections focus on estimates for US workforce and engineering graduation rates.

Ortiz said, "There are a lot of excellent professionals around the world that are not, in my view, fully incorporated into the worldwide workforce with respect to strategic projects."

A transition is necessary, according to Ortiz, from the industry's current state of maintaining a base production staff of nationals that have only a tactical focus and deal with small-to-medium capital expenditures. He noted that many companies base their large-capital project growth teams at company headquarters and staff them almost entirely with US-based members.

Ortiz highlighted people and organizational issues as the keys to overcoming the challenge of getting developing-country nationals involved in strategic, large-capital projects. In his vision, companies could develop processes that would get these individuals more involved, he explained.

Ortiz pointed out that knowledge imbalances require more than a course or seminar when sophisticated, new-development projects are at stake. Speaking in general terms, Ortiz explained that filling the gap of bringing professionals to an 80% knowledge base that strategic project planners would require, up from 40-50%, must encompass building technology transfer into the company's operations.

The cultural part of technology transfer, more than a language difference, is attitude and the way people work differently, according to Ortiz. "We have to understand how people work differently and see what we can do to address that issue," he said.

Defining who is responsible for technology transfer and identifying technology-transfer skills are a major part of the problem, he explained. Engineers with very good technical skills may not be good at technology transfer and would not volunteer for the task.

Ortiz highlighted that logistics and funding are obvious problems. He said, "Without a good business link, there are no clear goals, there are no clear deliverables, and obviously not very good measures."

Nigerian example
Ortiz related an example of a successful experience in Nigeria with technology-transfer processes built into the project planning for an oil field optimization process.

He detailed the case of a mature oil field that was producing 50,000 bo/d with 70% water. The field had approached the economic limit, even though recovery was only about 20-25% of OOIP.

To extend the field's life, a drilling and workover campaign required the application of new technology. Also to ensure success, the technical staff required an in-depth understanding of how the field would respond to the planned operations.

Ortiz explained that the project operator had brought in people from the state oil company, from the country's director of petroleum resources, and consultants who were to help facilitate and even train the national staff if they were lacking in some of the concepts.

Ortiz said, "It was a tremendous success. It was a business success, and it was a technology success, which in my view (the two) should go hand in hand." He explained that the field's production increased by 30,000 bo/d and its reserves increased by 50 million bbl of oil.

He explained that, on the issue of technology transfer, all of the professionals became proficient in the applied technologies that involved geostatistics, modeling, and horizontal drilling. The staff also combined the interaction among reservoir modeling, horizontal drilling, and project management.

Ortiz explained that these were areas that the national staff was not entirely knowledgeable about before the process. They were not familiar with the technologies only because there was no prior use or need locally for the technology before the project.

National staff members conducting future studies within their country was the direct indication of the technology transfer's success, according to Ortiz.

He said, "We had organizational alignment and commitment at an asset management level and technology level. We had very clear goals (for technology transfer). We addressed knowledge and cultural barriers; I cannot overemphasize this issue."

More in General Interest