Recruitment & Retention Horizon: Navigating Generation Y

Recruiters are facing many challenges in today's world of employment needs, placing them in a time of great change. The aging workforce is slowly retiring while members of Generation Y, or the millennial generation, are rapidly becoming the go-to candidate to fill the vacant spots in the oil and gas industry.

It is essential for business leaders to do more than just observe the changing times and demographics--they must understand them and be at the forefront of recruiting efforts in order to successfully attract and retain the next generation of oil and gas talent.

"Companies' commitments to employees and career expectations have evolved drastically," said John-Frederick van Zuylen, group manager of Power & Renewable Energy at Allen & York and president of the Dubai chapter for Young Professionals in Energy (YPE).

"Only well-established companies with long-term goals and stable business can afford to have a real recruitment and retention strategy. Other companies need to adapt more frequently and more quickly to changes in the market."

The oil and gas industry contributes significantly to the U.S. economy and is one of the nation's largest employers. Even though the country is still facing a struggling economy, the nation's energy companies provide well-paying jobs, revenue to governments and bountiful opportunities for Americans – totaling an economic contribution that continues to outpace other major industries in North America.

Specifically, the energy stimulus contributed $476 billion to the U.S. economy in 2010, equal to about 60 percent of the 2009 federal stimulus, according to the American Petroleum Institute (API).  And the energy industry currently employs about 9.2 million full-time and part-time jobs, accounting for 5.2 percent of the total employment in the country, according to research data analyzed by PricewaterhouseCoopers.

While America is going through a boom in U.S. oil production, the shortage of skilled, educated workers is hurting the industry's recruiting efforts. There are four big shifts that have radically redefined the workforce and corresponding recruitment, retention and training strategies, according to a white paper released by McCrindle Research in May 2009. These shifts are: an aging population; transitioning generations; increasing options/information; and a redefined work life.

In 2010, there were 40.3 million citizens aged 65 or older in the United States, accounting for 13 percent of the total population, making it the largest age group than in any other decennial census, according to the United States Census Bureau. This number is up from 31.2 million in 1990 and 35 million in 2000. Furthermore, this age group accounts for 57 percent of full-time workers and 42 percent working in management, professional and related occupations. In just 15 years, by 2028, the last of the baby boomers will be reaching retirement age and leaving the labor market. This aging workforce is even more evident in the oil and gas industry; the average age of an O&G worker is 49, considered among the oldest of any industry, according to API.

As veterans and baby-boomers retire, recruiters are forced to focus on the upcoming generation – Generation Y. This generation, which currently makes up about 10 percent of the U.S. workforce, was born between 1980 and 2000. Gen Y, the largest American generation at 92 million strong, compared with some 76 million baby boomers, will make up roughly three-quarters of the work force by 2028 and the oldest millennials will be entering leadership positions by that time, if not sooner.

With generations mixing in the workplace, the need to understand the younger group is ever crucial. Having a mix of generations in the workplace is not new but traditionally, juniors performed menial work while their senior coworkers held managerial positions – roles juniors would eventually fill as they moved up the ranks. This dynamic does not always ring true today. The new reality is that older leaders are managing teams consisting of several generations with diverse backgrounds or young graduates are managing older workers.

Members of "Gen Y will continue to transform the workplace to better suit their needs," stated Stefanie Hanz, a recruitment consultant. "This generation is work-oriented and consistently searching for development opportunities while making sweeping changes to the way organizations and their people work."

Generation Y's wants and needs can vary from those of older workforce generations, according to the whitepaper "The Talent Crisis in Upstream Oil & Gas,"  by Deloitte Research. Unfortunately, the newer generation grew up with some negative perceptions of the oil and gas industry, fed by events such as the 1989 Exxon Valdez oil spill in Alaska and suspected price manipulation in the aftermath of hurricanes Katrina, Rita (2005) and Ike (2008).

Furthermore, the millennials witnessed the layoffs of their parents during this period - people who stayed with the same employer for years, if not decades -so by understanding and engaging them, Gen Y will be better facilitated at connecting with older staff and customers.

"Gen Y [wants] clear expectations of work so that they can reach assigned goals but also older generations must allow for Gen Y to prove themselves so that they can exceed expectations instead of being micromanaged," said Hanz. "They want the ability to contribute as individuals and team members but they also want to have the opportunity to make a difference, learn and prove themselves."

This generation also expects feedback, consistently and regularly. Immediate, effective feedback allows millennials to produce better, quicker and more efficiently. The key is to provide constructive criticism in a timely manner.

"Regular feedback is very motivating and is something Gen Y yearns for," said Hanz. "The official 12-month performance review isn't typically enough, and if there is an opportunity for development, let them know in a timely manner. They aren't just looking for praise but are searching for constructive feedback in order to produce better work and grow as individuals."

It has been said that it has never been more difficult to attract, recruit and retain staff than now. But surprisingly, this generation is the most educated workforce ever, and has the ability to travel, work overseas or to retrain for yet another career.

Members of "Gen Y have so many resources at their fingertips that they feel everything should be given to them when wanted," said Matt Gelotti, vice president in Aon's client development group in Houston and YPE's Houston-chapter president.

"Gen Y has the education, and have access to a multitude of information, and they want the paycheck, the notoriety and to be in charge. But as a senior individual at a company, when looking at Gen Y on paper, they lack experience. So this Gen Y person has only mastered hypothetical theories versus real-life experience that molds and teaches an individual through trial and error experiences from the workplace. Overall, Gen Y lacks the patience."

Gen Y is looking for long-term career development but does not have long-term employment loyalty. Those aged 20-24 are three times more likely to change jobs in a year than those aged 45-54, according to Deloitte Research.  

"Moving around is just nature of the beast," said Hanz. "Gen Y is posed to now work on projects or be hired as contract employees [instead of being] hired full-time because employers are shifting away from the typical employment model. Yes, they are known for moving around quite a bit and they will leave if opportunity isn't present."

"The lack of loyalty in Gen Y is looked down upon by baby boomers," commented Gelotti. "Gen Y will easily jump from one employer to another for a dollar or two whereas previous generations wouldn't. They have to move, jump and relocate in order to get more compensation."

This decline in tenure can be viewed as a character flaw in Gen Y but the cause is not a lack of loyalty, nor a poor work ethic; it's merely a response to the changed times.

"So, for most players in the job market, many key functions have become more short-term," reiterated Frederick van Zuylen. "This may sound negative, but it is not necessarily so. The younger generation is more flexible for this new approach and most often welcomes change as an opportunity to experience and get involved in different projects or even different functions."

Employers can capitalize on this generational difference by "developing" Gen Y by providing opportunities to learn through experience; "deploy" them by designing effective organizational roles and environments; and "connect" them by creating seamless networking infrastructures, noted Deloitte Research's white paper.  

The organization created the develop-deploy-connect model that helps for organizations to generate capability, commitment, and alignment in key workforce segments, which in turn improve business performance. The organization says that when this model is implemented, the attraction and retention of skilled talent largely take care of themselves.

By "developing", one can provide real-life learning opportunities that employees need to master a job. Not traditional classroom or online education but by "trial-by-fire" experiences that stretch their capabilities and the lessons they learn from peers, mentors or others.

"Mentors are vital, [even] critical to Gen Y," stated Gelotti. "A mentor that can oversee their growth, watch over them, and lead them is a huge plus in a work environment. It shows that the company is invested in them and their overall professional development. So in the next five to 10 years, this generation can help grow the business."

To "deploy", Deloitte Research suggests working with key individuals to (a) identify their deep-rooted skills, interests, and knowledge, (b) find their best fit in the organization and (c) craft the job design and conditions that help them to perform.

"If companies can show Gen Y that they will have the opportunity to engage with senior management that is also a huge benefit," said Gelotti. "Being in meetings with senior management, their boss' boss, listening to ideas, witnessing how ideas are played out, giving them opportunities to see, hear, learn, to find their niche, are huge bonuses to this generation. They help them to better perform because they feel challenged and excited."

The third talent strategy Deloitte Research suggests is to "connect" by providing critical employees with the tools and guidance they need to (a) build networks that enhance individual and organizational performance, and (b) improve the quality of their interactions with others.

Typically, one would complete levels of traditional education or forgo them entirely, move into the workforce– maybe have a career change or two – and then head into retirement, all the while cautious about separating the work-life balance.

However, Gen Y is open to different roles, phases and careers. The education phase is extending well into adulthood and throughout the work life which in turn helps them form their long-term career goals. This generation needs work arrangements that align individual and organizational needs in flexible ways. Gen Y will experiment with different industries and may revamp their career multiple times, all while looking for opportunities that will take them to other states and countries.

"Relocation opportunities are considered a perk to Gen Y. They are looking to work overseas [and] explore the world while gaining operational experiences globally," said Gelotti.

This generation is work-oriented but requires the flexibility of having multiple employment perks, such as flexible work arrangements that accommodate personal circumstances and working styles. This generation searches for employers that allow for flexibility, opportunities to embrace their entrepreneurial ambitions and the opportunity to use social networks at work without strict corporate guidelines. Gen Y is used to working anywhere and everywhere at any time of day or night on their laptops, tablets and smartphones.

"Often times, people get over worked, burnt out and then have the urge to move on. Employers need to offer opportunities that blend professional and personal time," Gelotti said.

To help with the work-life balance, upstream oil and gas companies can adopt innovative rewards programs that build creativity and flexibility into their work environments, thereby attracting and motivating employees, according to Deloitte Research. Examples of these initiatives can be supplementary rewards programs, such as annual incentive plans, deferred compensation, profit-sharing, stock options, recruiting incentives, flexible work schedules and virtual work alternatives.

The organization also noted that one leading upstream oil and gas firm raised its retention rate to 30 percent above the annual industry norm by funding hands-on training for all drilling employees. These types of strategies target Gen Y and reward performance with flexibility while helping to develop the social infrastructure needed to collaborate effectively stated the organization.

While being criticized as fickle, self-focused, lazy and needing to be coddled, the reality is that Gen Y is just a reflection of its time. Economic cycles come and go, jobs aren't guaranteed and profits are seemingly preeminent--so it is not an inherent selfishness but a response to corporate realities, stated McCrindle Research.

"When companies can offer something unique and compelling that sets them apart from other industry competitors, whether compensation, access to ground-breaking technology, or flexible work arrangements, then employers will attract the best and brightest," said Hanz. "Loyalty and commitment from Gen Y can indeed be garnered."

"You have to hang on to your talent and to do so you have to know your talent," added Gelotti. "These are the people you are counting on to take over the reins 15-20 years down the road, so get to know them. If you invest in them early, the benefits will pay off in the long run."

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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All Hands Aboard for Historic Offshore Hiring 'Spree'

Hiring remains brisk amid the worldwide offshore petro-boom with demand centering upon experienced professionals and rig workers alike.

Key organizations expect the number of available jobs in the offshore drilling sector will keep growing — but at very different rates, depending on the field of specialty.

For example, demand for petroleum engineers will grow at 17 percent between 2010 and 2020, or about as fast as average for all other occupations, according to the U.S. Bureau of Labor Statistics (BLS). 

BLS also expects employment of oil and gas workers to increase, but by less than half the pace of petroleum engineers, or only 8 percent, from 2010 to 2020. 

"Because of higher prices for resources, oil and gas companies are more likely to drill in deeper waters and harsher environments than in the past. These complex operations require more workers," said BLS in its "Occupational Handbook for 2012".

"Higher prices will also encourage oil and gas companies to return to existing wells to try new extraction methods, thereby increasing demand for oil and gas workers. Also, changes in policy could expand exploration and drilling for oil and natural gas in currently protected areas, potentially boosting employment.

"However, new production technologies are expected to dampen overall demand for oil and gas workers," BLS added.

Yet skilled tradespeople with a yen to work in offshore petro-jobs might wish to consider avenues other than direct rig worker jobs. For example, BLS projects iron work employment to soar by an astronomical 49 percent between 2010 and 2020. Other good bets are pipefitting trades at 26 percent growth, construction, 25 percent, and steel at 22 percent. Maritime employment is another related field forecast to rise faster than the average for all occupations, at 20 percent over the period.

Yet U.S. government statistics hardly tell the whole story.

"Globally, the oil and gas market is very buoyant and companies are very active — and struggling — to hire competent, experienced resources. This competition for recruiting the right talent is particularly intense in Australasia, Brazil and the U.S., particularly Houston," observed Didier Beyent, corporate human relations director for Netherlands-based SBM Offshore N.V., a floating production, storage and offloading (FPSO) company.

Demand is especially keen in the following disciplines: engineering, regulatory compliance, health, safety and environmental and project planning, Beyent said.

"With many people about to retire, the industry can expect a mandatory and significant hiring spree in the following three years, certainly more than 20,000 people worldwide," Beyent said. "Required qualities from employees are team spirit, positive attitude and energy, tenacity, mobility [and] company spirit. Together we push the limits of what's possible – particularly in the field of technology."

Noble Corp. experiences a small turnover at the lower levels of the job ladder, due to its $35-million investment in training and benefits that encourage employees to stay  with the company, John Breed, director of investor relations and corporate communications at Noble Corp. said. However, Noble faces considerable "poaching at the upper echelons" of the job ladder by recruiters for other companies and faces "many gaps" in specific areas, Breed added.

"With the addition of an ongoing new-build program industry-wide, competition for the best people is nothing short of extraordinary," wrote President and CEO of Noble Corp. David Williams, in the company's recently released 2012 annual report.

During 2012, Noble recruited more than 1,000 new team members, bringing the total employee headcount to more than 7,600. To speed new hiring, Noble uses a new web-based human resources information system and recruitment modules to identify and assess onboard top candidates at a previously unattainable speed, Williams noted. In addition, existing employees generated more than 2,000 referrals last year.

In response to industry-wide attrition concerns, Noble has stepped up efforts in providing opportunities for development and advancement, with related investments rising by more than 27 percent over 2011, setting a new company record. Offshore employee attrition rates have now dropped for three consecutive years, the company reported.

Fifty-three percent of oil and gas industry employees would consider leaving an employer due to a lack of training and development, according to a recently issued BP plc-study conducted by the Society of Petroleum Engineers (SPE). Seventy-five percent of respondents to a related survey said that training and development was important in their choice of role, while 37 percent felt that a lack of training in previous roles has held them back in their career.

"The Aberdeen jobs market is exceptionally busy for us right now, having clearly returned to pre-2011 levels due to the increased levels of drilling and an increase in available rigs," said Mark Charman, CEO of Faststream Recruitment Group & Faststream Executive Search in a recent issue of the company's quarterly magazine, Streamline. "There is no shortage of jobs, just people to place in them. There are more jobs in Aberdeen than people available to fill them."

"The real challenge is finding experienced people across the board. Companies continually ask for candidates with 10-15 years' experience and this is what less-experienced people can be competing against. This is the bracket where we see a lot of movement too, as the same people get poached from company to company, resulting in an upwards spiraling salary," Charman added.

Based on its projection of worldwide offshore rig count growth in 2013, Faststream thinks that 11,000 more jobs may be added between fall 2012 and this time next year – the largest increase in a decade.

Progression up the ranks for newcomers could be slower now in the wake of 2010's Macondo rig blowout in the Gulf of Mexico, said offshore expert Duncan Weir of Weir International Ltd., an offshore consultancy firm in Scotland.

"The greater complexity of rigs building today compared with, say, fifteen years ago, is significant and requires additional people trained, educated and competent in different skill sets," said Weir.

"The number of new additional people required to man the new rigs while maintaining the crewing levels of the existing worldwide fleet is notable and has generally resulted in the time between promotions being reduced with respect to time. This significant human resource challenge is not only applicable to the drilling sector in the oil and gas industry, but is one which needs to be managed, especially when learnings from incidents like Macondo are to be rigorously applied. In short, historical lessons in the drilling business should not only be restricted to equipment issues  but should embrace the need to allow time for people to become confident and competent at what they do before [being] promoted to a higher position.

"The 'great human resource conundrum' is all the more acute for new-start drilling companies, of which there is a small number," Weir continued. "Such companies are generally characterized by the setting up of a new entity with experienced management, a number of new building rigs and setting out to put them to work with competent personnel in charge offshore. HR challenges for such drilling companies are brought even more into focus in the present days. Similar challenges may also be experienced by drilling contractors attracted to diversify from their core segment of the offshore drilling business in, say jackup rigs, to deep water or ultra-deep water rig operations or by drilling contractors who decide to reactivate stacked rigs. It is considered vital to provide rig operations personnel with classroom training, but also with adequate time with hands-on operating experience on the rig prior to promotion."

It's also important that people  in oil and gas offshore drilling take the time and make the effort to pass on their knowledge for the benefit of people starting out in the industry, since they represent the long term future of the business, Weir said. There are a number of professional development companies able to perform part or all of this function.

lndustry consultant Bill Rehm, of Houston, an expert in well pressure, well control, horizontal drilling and underbalanced drilling, formerly with Dresser Industries and Maurer Engineering, agrees that more hands-on experience will be important.

"Along with the great crew change, there has been a major change in attitude towards supervision and training among the operators in the drilling business. The change has been that supervisors and engineers do not [need] to have several years of hands-on experience. This is following the old Harvard Business School lesson that if you can run a Firestone Tire Store, you have the management skills necessary to manage.

"The problem is that the supervisors, engineers [and regulators] do not have the basic knowledge of the field practice. Hence, while hours of safety training are required, few in the training business, and less of the management, understand the actual practice. On the other hand, while safety efforts have been to a large degree effective and will probably continue so, there always remains the problem of major failures due to lack of supervisory and engineering hands-on knowledge."

Barbara Saunders is an award-winning energy, economics and environmental journalist based in Houston. Email Barbara at bxsaun5155@aol.com.

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Myanmar to Boost Local Firms Involvement in Oil, Gas

Myanmar wants to boost the participation of local companies in oil and gas work in the country in the future, but right now they are not well developed enough to lead exploration and production activities, according to Myanmar's Deputy Minister for Energy.

Speaking to the Offshore Technology Conference in Houston Thursday, U Htin Aung said:

"I have stated before that … in the future we would like our Myanmar companies to work more actively in the oil and gas business. At this moment they do not have the experience or the knowledge…

"So we are bringing them in to work together with foreign companies that have the expertise, and knowledge and technical know-how and all of the financial capabilities, to learn from them and hopefully in the future our domestic companies will be more active in the oil and gas industry of our [country]."

One of the oldest oil producing states in the world, exporting its first barrel in 1853, Myanmar is opening up its oil industry to foreign oil companies after decades of isolation.

Several international oil companies will be the latest firms to get the chance to operate offshore Burma when the company launches only its second bidding round since the easing of US sanctions against the country in June. Myanmar will be inviting bids for 30 offshore oil and gas blocks in this bidding round.

Total, Petronas, CNOOC, CNPC, Essar and ONGC are already among several international oil companies exploring and developing 31 blocks in the country.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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US Crude Oil Futures Settle Down; Products Hit One-Month High

U.S. crude oil futures ended weaker but above the day's lows, while refined products futures hit one-month highs on hopes of a coming improvement in the economy of the world's biggest oil consumer.

Oil traders looked beyond the highest stocks of U.S. crude oil in 32 years, and the current sluggish growth in fuel consumption, to bid up prices late in the session. Analysts said the rally was spurred by the hope that strong indicators from the U.S. market would jump-start sputtering oil demand.

The Labor Department's count of new weekly claims for unemployment benefits came in lower than economists had forecast, while a widely watched indicator of layoffs fell to prerecession levels for the first time. The four-week average of benefits claims dropped to the lowest level since November 2007.

"There's a little bit more optimism there, but I think we have to see it play out a little longer," said Gene McGillian, broker and analyst at Tradition Energy.

Light, sweet crude oil for June delivery on the New York Mercantile Exchange settled down 23 cents, at $96.39 a barrel, but up more than $1 from the session low of $95.35.

June Brent crude oil on the InterContinental Exchange shed earlier losses to settle 13 cents higher, at $104.47 a barrel.

Brent's premium to the U.S. benchmark was $8.08 a barrel at the settlement, up from $7.72 a day earlier, which was the lowest level since Jan. 20, 2011.

Brent's premium to the U.S. benchmark has narrowed considerably as rapidly rising domestic crude oil output makes its way to the key Gulf Coast refining region, displacing imports of Brent and similar crudes.

Refiners are shipping oil from the midcontinent to the Gulf by truck and rail, as well as pipelines, chipping away at the supply surplus in landlocked Cushing, Okla. Oil inventories at the hub, which is the delivery point for the Nymex futures contract, have fallen by 2 million barrels in the past two weeks. The year-on-year surplus has dropped to 5 million barrels from nearly 24 million barrels in January.

As the regional bottleneck eases, the Brent premium has narrowed to near $8 a barrel, from $17 a barrel early this year.

Crude prices had been under pressure from government data showing stocks rose modestly last week to the highest level since April 1981. The Energy Information Administration also said in its weekly oil supply/demand report Thursday that demand for gasoline, the most widely used petroleum product in the nation, dropped by 400,000 barrels a day last week from the year-earlier level. The 4.7% drop was the biggest at the early May start of the driving season since 1994.

But traders said there is widespread hope that increasing refinining activity will reduce the deep inventories and that a pickup in the economy will boost demand for refined products, even as the EIA sees summer gasoline use slipping to a 12-year low in the peak spring-summer driving season.

In June, the EIA projects crude oil processing at refineries will average 15.6 million barrels, up about 440,000 barrels a day above current levels, and crude stocks will fall by about 12 million barrels by the end of June, to just below year-earlier levels. Stocks are now above the year-earlier level by 16 million barrels, or 4.2%.

Tim Evans, analyst at Citi Futures, warned that these expectations make for "a weak bullish arguement" because if fuel demand doesn't improve, the problem of high crude oil stocks is simply shifted in the refined products market.

June heating oil futures settled 2.19 cents higher, at $2.9366 a gallon, the highest level since April 10.

Reformulated gasoline blendstock futures for June delivery settled at the highest level since April 9, gaining 3.13 cents, to $2.8851 a gallon.

Copyright (c) 2013 Dow Jones & Company, Inc.

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Technip Scores Subsea Tieback Work for South White Rose

Technip was awarded by Husky Oil Operations two contracts, with a combined substantial value, for the planned subsea tieback of the South White Rose Extension field. The field is an extension of the White Rose field, located in the Jeanne d'Arc Basin, approximately 217 miles (350 kilometers) southeast of St. John's, Newfoundland and Labrador, Canada.

The first contract will be executed in 2013 and will include the supply and installation of gas injection flowlines, umbilicals and subsea structures.

The second contract will take place in 2014 and will cover the supply and installation of flowlines and subsea structures to support oil production and water injection.

Technip's operating center in St. John's will perform the management and engineering of both projects, with various materials and equipment being supplied from within the Group and local supply chain.

Knut Boe, Senior Vice President of Technip's North Sea-Canada Region, commented: “These two awards reinforce Technip's continuous involvement in Atlantic Canada's offshore oil and gas projects. They also mark a new step in the relationship between Technip and Husky Oil Operations, for whom we successfully completed the subsea production system contract for the White Rose field development in 2005.”

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Saudi Aramco to Open 3 US Research Centers

Artist rendition of the Houston Research Center located in the city?s ?Energy Corridor? with over 45,000 square feet of office and state-of-the-art laboratory space. The new facility will focus on upstream research to advance the discovery and recovery of oil and gas. Saudi Aramco is currently hiring experts from around the world to work in the center expected to be operational later this year.

Saudi Aramco has announced the opening of three research centers in the United States with Houston named one of the cities to house a new facility focused on upstream research. Houston joins two other U.S.- based centers in Cambridge, Mass. and Detroit designed to extend the energy giant's global research and development (R&D) network. 

The Houston Research Center, expected to be operational later this year, will consist of teams spanning upstream subsurface domains. Saudi Aramco is currently hiring experts from around the world to work in this center that has state-of-the-art laboratory to develop technology to advance the discovery and recovery of oil and gas. 

In opening these research centers, Saudi Aramco looks to further strengthen its collaboration with others and to provide solutions to challenges in the upstream and downstream sectors of the industry. These specialized centers of excellence will address far-reaching challenges.

The three centers join a worldwide network of research centers established by Saudi Aramco to leverage scientific expertise and further complement the cutting-edge work by the company's Exploration and Petroleum Engineering Center's Advanced Research Center (EXPEC ARC) and its Research and Development Center (R&DC) both located in Dhahran, Saudi Arabia. These world renowned R&D centers are devoted to original research from the upstream exploration and production sector to downstream refining. The work supports Saudi Aramco's strategic aims to increase oil and gas reserves, improve recovery rates and develop improved refining processes.   

The Houston Research Center, located in the city's "Energy Corridor" west of downtown along Interstate 10, was strategically located in a major hub for oil and gas research and development with close proximity to many energy-industry related companies. Furthermore, it is near chemical and oil field fluids manufacturers as well as service companies, R&D labs and top petroleum engineering universities.  

The Cambridge Research Center, in a stand-alone center adjacent to the Massachusetts Institute of Technology (MIT), was strategically located to support computational reservoir modeling, nanotechnology and advanced gas membrane systems.

The Detroit Research Center, sited in southeastern Michigan in the city of Novi, was strategically located to take advantage of collaboration with leading research organizations for joint research on fuel efficiency and engine development.  

Saudi Aramco R&D representatives say much of their research happens in partnerships with premier universities and technology providers as well as independent researchers and developers around the world.   

The three U.S.-based centers will employ experienced professionals with advanced degrees in petroleum engineering, geology, chemistry, materials science or other related fields. The company also has research centers in Thuwal, Saudi Arabia; Delft, The Netherlands; Paris; and Beijing; and a technology center in Aberdeen.   

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California Postpones Oil, Gas Lease Auctions

California's Monterey Shale is continuing to be the talk of the industry after the U.S. Bureau of Land Management (BLM) recently announced plans to postpone upcoming federal lease auctions in the state. The prolific play, that holds more shale oil than anywhere else in the country, has the potential to pull the state out of its downward debt spiral but has been caught in a tug of war between proponents and environmentalists since the shale boom occurred in the nation.

The federal land managers postponed an auction scheduled for later this month that would have put more than 1,300 acres of prime public lands up for bids. Another auction scheduled in Colusa County, about 75 miles northwest of Sacramento auctioning about 2,000 acres was put on hold until the end of this year.

"Our priority is processing permits to drill that are already in flight rather than work on new applications," Interior Secretary Sally Jewell told reporters Tuesday after a Senate budget hearing in Washington.

The Monterey Shale, which stretches from Central California down through Southern California is estimated to hold more than 15.4 billion barrels of recoverable crude oil, according to the U.S. Energy Information Administration.

"We want to get the greenhouse gas emissions down, but we also want to keep our economy going," said Governor Jerry Brown (D, California), during a March 13 press conference to discuss the issue. "That's the balance that is required."

The decision to postpone the auctions is loosely based on a recent federal judge ruling that BLM had violated a key environmental law when the energy auctioned the drilling rights for other parcels near the Salinas River Valley. The judge cited that the agency failed to review the impacts on water, wildlife and air quality. A group of environmentalists sued the bureau for not properly reviewing the environmental risks associated with hydraulic fracturing and other types of oil and gas development.

"America has a game changing opportunity to build a stronger economy and to secure a brighter energy future thanks to our vast supplies of newly accessible oil and natural gas," said John Felmy, American Petroleum Institute chief economist in a conference all to reporters Thursday.

"Full development of these resources could mean millions more jobs, stronger and more rapid economic growth, and trillions in added tax revenue, all while strengthening our position vis-à-vis the geopolitics of oil and natural gas markets. Unfortunately, current federal policy continues to prevent our nation from taking full advantage of this opportunity. The most recent example of this is BLM's decision to postpone oil and natural gas lease sales in California until the fall, at the earliest."  

Postponing the leasing auction does not mean that drilling on existing leases will stop, stated BLM spokesman David Christy in a release. The agency is concentrating its limited resources on enforcement on existing leases and other priorities, such as granting renewable energy permits, he said.

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

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California Postpones Oil, Gas Lease Auctions

California's Monterey Shale is continuing to be the talk of the industry after the U.S. Bureau of Land Management (BLM) recently announced plans to postpone upcoming federal lease auctions in the state. The prolific play, that holds more shale oil than anywhere else in the country, has the potential to pull the state out of its downward debt spiral but has been caught in a tug of war between proponents and environmentalists since the shale boom occurred in the nation.

The federal land managers postponed an auction scheduled for later this month that would have put more than 1,300 acres of prime public lands up for bids. Another auction scheduled in Colusa County, about 75 miles northwest of Sacramento auctioning about 2,000 acres was put on hold until the end of this year.

"Our priority is processing permits to drill that are already in flight rather than work on new applications," Interior Secretary Sally Jewell told reporters Tuesday after a Senate budget hearing in Washington.

The Monterey Shale, which stretches from Central California down through Southern California is estimated to hold more than 15.4 billion barrels of recoverable crude oil, according to the U.S. Energy Information Administration.

"We want to get the greenhouse gas emissions down, but we also want to keep our economy going," said Governor Jerry Brown (D, California), during a March 13 press conference to discuss the issue. "That's the balance that is required."

The decision to postpone the auctions is loosely based on a recent federal judge ruling that BLM had violated a key environmental law when the energy auctioned the drilling rights for other parcels near the Salinas River Valley. The judge cited that the agency failed to review the impacts on water, wildlife and air quality. A group of environmentalists sued the bureau for not properly reviewing the environmental risks associated with hydraulic fracturing and other types of oil and gas development.

"America has a game changing opportunity to build a stronger economy and to secure a brighter energy future thanks to our vast supplies of newly accessible oil and natural gas," said John Felmy, American Petroleum Institute chief economist in a conference all to reporters Thursday.

"Full development of these resources could mean millions more jobs, stronger and more rapid economic growth, and trillions in added tax revenue, all while strengthening our position vis-à-vis the geopolitics of oil and natural gas markets. Unfortunately, current federal policy continues to prevent our nation from taking full advantage of this opportunity. The most recent example of this is BLM's decision to postpone oil and natural gas lease sales in California until the fall, at the earliest."  

Postponing the leasing auction does not mean that drilling on existing leases will stop, stated BLM spokesman David Christy in a release. The agency is concentrating its limited resources on enforcement on existing leases and other priorities, such as granting renewable energy permits, he said.

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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PetroVietnam Seeks Partners at Home, Abroad for Oil, Gas Development

PetroVietnam is seeking partners to expand its oil and natural gas production at home and internationally to meet Vietnam's growing economy and energy needs, said company officials at the Offshore Technology Conference Monday in Houston.

Vietnam's rising energy demand, which has grown at a rate of 15 percent per year, has prompted the country to seek to aggressively increase its overseas exploration budget. That demand lagged some in the past two years, but is expected to rise again in 2013, said PetroVietnam officials in a panel discussion.

Total oil production in Vietnam has grown to 320,000 barrels of oil per day (bopd)) of sweet crude. PetroVietnam aims to ramp up its production from 120,000 bopd this year to 180,000 bopd in 2015 to 470,000 bopd in 2025. PetroVietnam currently produces 1 billion cubic feet per day (Bcf/d) of gas; plans call for that production to grow to 1.5 Bcf/d within the next four to five years as the company fully develops its offshore gas resources.          

The company started pursuing offshore exploration and production globally in the early 2000s, and now participates in 20 projects in 15 countries globally, including South America, North Africa, Central and Southeast Asia. The company now has 90 production sharing agreements with partners in Vietnam and overseas. PetroVietnam aims to increase its international production from 26,000 bopd to 60,000 bopd by 2015, with first production expected from projects in Peru, Algeria and Russia in November of this year and in 2014 and 2015.

Domestic exploration efforts have focused on Vietnam's offshore continental shelf, but officials say the nation's has significant untapped ultra-deepwater potential with undiscovered resources of 3.250 million cubic meters (114.8 million cubic feet), said Do Van Hau, president and CEO of PetroVietnam. The company is seeking partners to help it address the challenging challenges of producing natural gas with high carbon dioxide content.

The company has interests available in acreage in Uzbekistan and Myanmar; PetroVietnam is negotiating with a partner for its Myanmar interest.

Hau said the company does not have any plans at this time to drill in Cuba. Reuters reported last year that PetroVietnam was considering drilling offshore Cuba in 2013.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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