When I was doing an internship at NAM (Shell/Exxon joint venture) in the Netherlands in 2003, an experienced geologist took me aside and said, “Henk, be aware, China is coming, and you’d better be aware of that.”
It is now 22 years later, and I increasingly realise that the geologist was right, even when I wasn’t overly concerned at the time.
This article is based on some more recent conversations. And these conversations, or sometimes rather just some off-the-cuff remarks, tell a story. A story that contains an element of what I was told a couple of decades ago. A story that says that recruitment of geoscientists in the oil and gas sector is still at a low across some of the world’s oil and gas hotspots, which in my eyes, and at first glance, feels odd given that the industry is moving back to oil and gas more openly.
So why is it that I still don’t see the pull for geoscientists? Is it all due to China? No, I don’t think so, and based on these recent conversations, I’ve landed on a number of factors that play a role. Here are some thoughts.
The engineering of oil and gas production
Oil and gas production is becoming more of an engineering industry. Canada is a prime example of that, where the production of heavy oil from shallow reservoirs does not require a great deal of geological input anymore. It is all about drilling horizontal well after horizontal well. And thanks to better technology, there is no wellsite geologist required anymore for every single one of them. It is not hard to see how this impacts the job opportunities for geologists. In fact, I believe it is one of the reasons why, despite the number of geoscience graduates having dropped dramatically over the past few years – a university professor from Canada told me that he now has eight students in his petroleum geology course where it used to be 25-30 a decade ago – those who do graduate still struggle to find a role.
Relocating geoscience
It is not often talked about, and the big IOC’s don’t tend to speak about it at all, but relocating geoscience roles to low-income countries is becoming quite a thing, with many of those roles supposedly going to India. In Calgary, I spoke to a geoscientist from Imperial Oil (ExxonMobil). The person told me that the company has decided to outsource the entire geoscience division to India, impacting tens of roles in the Canada office. Imagine the knock-on effect this has on the opportunities for local graduates if such a number of experienced people ends up on the local job market? And Exxon is not the only company embarking on this; I know Chevron has done the same, as well as Shell. The reason is obvious, and it shows that IOC’s are ruthless to save money. The times of the highly-paid expat who travels the world from one hotspot to another are over.
China has arrived
Then there is the increasingly important role China plays in the upstream oil and gas space. Wherever you go, you find Chinese companies taking up acreage. And the Chinese do what they are good at; drilling wells, mostly onshore – they tend to be less forthcoming when it comes to offshore exploration, let alone frontier. To make all that onshore drilling happen, the Chinese ensure that there are people in China lined up to travel to far flung places to stay in a compound for a few months until it’s someone else’s turn. This is the picture someone painted when having a conversation in Egypt, as we were talking about how China develops fields in Iraq. And this also includes most of the subcontractor work, it’s primarily done by Chinese outfits.
Loose commitments
There is another factor at play to explain the lack of geoscience roles advertised, and that is the observation that many of the IOC’s, despite them taking up exploration acreage, are not yet committing to actually drilling a lot of wells. We will report on that more extensively in another article due to be published later, but it is fairly obvious that when you don’t plan to drill any new wells anytime soon in the acreage you just got hold of, there is limited requirement for geoscience input apart from possibly some mapping of leads and prospects.
AI has arrived, too
Artificial Intelligence is no doubt another factor that reduces the need for human geoscience input. Whatever people say about people still being required to supervise the work, when a computer is able to interpret faults in a seismic cube in about 10% of the time a seismic interpreter can do it, the conclusion is quite obvious. The same holds for the wellsite profession, where it is thanks to AI that a geologist can process and monitor data from multiple wells now, where that certainly was not an option a few decades ago.
The subsurface role in the energy transition is loosing momentum
And last but not least, I feel that many energy transition roles in geoscience are also under increased pressure. It is about ten years ago that we entered a cycle in which CO2 storage was going to be the holy grail of mitigating climate change, with many companies pulling together teams of people to dedicate research to it, as well as drilling wells. It has kept many geoscientists in jobs for a long time, jobs that they could even boast about to their friends and family. But I feel that the time of opportunities in this space is narrowing, on the back of the increased focus on the security of supply and profit maximisation efforts. Short-term, for sure, but bp contemplating an exit from the North Sea as it just embarked on drilling a series of CCS wells on one of the major UK CO2 storage projects tells me how serious the company is about the ranking of this very project in their global portfolio.
All in all, I fear that I will not be stalked by recruiters anytime soon. Instead, those who graduate in India or China may feel that opportunities have increased.
