Shell’s hiring, service industry on a roll!

This month’s news overflows into Neil McNaughton’s editorial. Shell is hiring and both Schlumberger’s Oilfield Services and Halliburton’s rebranded ‘Digital Consulting and Services’ units report record revenues. Returning from the UK PESGB’s PETEX conference, McNaughton notes the success with which the UK DTI keeps the North Sea pot bubbling—but questions how much of this can be attributed to its plethoric e-government initiatives.

The big news of this month is of course Shell’s hiring of 1,000 engineers. According to the Financial Times, this army of new talent will include 170 reservoir engineers. The new hires are, inter alia, to help restore credibility to Shell’s reserves booking system. This of course begs the question, ‘does the quality of an estimate depend on the number of estimators?’ There must be a ‘light bulb’ joke in there somewhere if only I could find it...

A thousand ‘engineers’ might seem a bit unbalanced—especially if you are of the geological and geophysical persuasion. I wondered if there was taxonomy problem here. In Europe, ‘engineer’ includes ‘scientist.’ So geologists, geophysicists etc. are all ‘engineers’. To check out my theory I visited which has an excellent online job application system. Masquerading as a ‘geologist/geophysicist’ I found zero openings. Changing hats several times, I found an unspecified number of openings for senior reservoir engineers, for senior production technologists but nothing for G&G or even for R&D! There are lots of jobs in IT (in Malaysia). But in general one has the impression that is not quite aligned with the actualité of the Financial Times report.


Another good news story comes from Schlumberger’s fourth quarter 2004 results. Oilfield Services revenue was $2.73 billion, up 18% on Q1 2004. Even Western Geco’s revenue, at $333 million was up 8% year-on-year. Schlumberger Chairman and CEO Andrew Gould, commenting on record Oilfield Services revenue, noted, ‘Industry is focused on the need to build additional supply capacity. This is evidenced by increasing exploration budgets, new field development plans, and unprecedented efforts to increase production and recovery from existing reservoirs.’


It’s not every quarter that a software product makes it into the chairman’s discourse, but Gould gave special mention to Schlumberger’s flagship interpretation and modeling application Petrel which ‘delivered revenue growth near 300%’.


For the same 4th quarter 2004 period, Halliburton’s Energy Services Group (ESG) posted fourth quarter 2004 revenue of $2.2 billion, 21% up year on year. Halliburton’s ‘smart well’ joint venture with Shell, Well Dynamics, posted record revenue. The ESG record revenues were also fueled by Halliburton’s Production Optimization and Drilling and Formation Evaluation segments.


Echoing Gould’s bullishness, Halliburton chairman and CEO Dave Lesar said, ‘Our customers are expected to continue to increase their spending, which will allow for a strong market for our services to continue through 2005 and beyond.’ Halliburton has rebranded its ‘Landmark and Other Energy Services’ as ‘Digital and Consulting Solutions.’ Overall, income for this unit was flat, but Landmark Graphics achieved record revenue up 16%.


I found a similarly buoyant mood at the Petroleum Exploration Society of Great Britain’s PETEX biennial conference and exhibition (see our report on pages 6 & 7 of this issue). The North Sea, now a mature province, is seeing pretty high levels of activity as newcomers rush in and pay what the oldcomers consider silly money for old fields and new licenses. With current trends in the oil price, it looks like the newcomers have it right.


The UK regulator, the Department of Trade and Industry (DTI) has played a significant role in encouraging innovation by freeing up the rules on who can apply for an exploration permit. As a consequence, seismic contractor Veritas is now operating a few blocks in its own right—leveraging its multi-client data library. So both North Sea exploration and the ailing geophysical business get a shot in the arm.


During my time in the business, the attitude of the PESGB to government has changed significantly. In the 70s—when socialist firebrand Tony Benn was in charge, the PESGB and government were at daggers drawn. Today, the relationship verges on the sycophantic. Minister of State for energy and e-commerce Mike O’Brien spoke on the wonders of the UK’s e-business initiatives—Pilot, Logic etc. in a manner that recalled Tony Benn’s boss Harold Wilson’s enthusiasm for the ‘white heat’ of the 1960s technological revolution!


Sycophancy not being my strong point, I must say that, visiting various DTI-sponsored sites—ukevision, ukoilresearch, Sharp, Pilot, Logic, Deal and perhaps even CDA, one is struck by the phenomenal effort that industry has put into following government exhortations to go ‘E’. E-tinkering has certainly produced hours of committees, debates, new ‘standards,’ and ‘initiatives.’ Has it all been worth it? When will the effort involved in electronic transacting be less that the sum of the committees’ times involved? Will this happen before the oil runs out?

Oil ITJ issue 100

Next month will the 100th issue of Oil IT Journal—launched back in 1996. Not quite sure how we will be celebrating this, but if any of you out there feel moved to sycophancy on our behalf we would like to hear from you!

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