Help Wanted: Energy Firms Competing For Hires

- Help Wanted: Energy Firms Competing For Hires

Wednesday, August 10, 2011
Dow Jones Newswires
NEW YORK
by Steve Gelsi

Despite a big drop in oil and stock prices in recent days, U.S. energy companies bearing down on the country's shale fields have yet to waver from plans to add staff this year to boost domestic production.

The industry is hiring as it brings new U.S. supply on line and demand grows from power-generation companies switching to natural gas from coal or fuel oil.

"Our industry is competing for talent," said Jim Haynes, vice president for U.S. operations at Spectra. "We continue our hiring mode."

Spectra Energy, for example, expects to add staff as part of plans by the pipeline firm and its affiliates to add up to $10 billion in infrastructure in the next five years.

The Independent Petroleum Association of America projects as many as 200,000 new jobs in the energy patch from hundreds of oil and gas producers in 2011.

"I don't think the threat of a double-dip recession will stop many companies from hiring," said Jeff Eshelman, spokesman for the trade group of oil and gas producers, once known as "wildcatters."

"Overall, the natural-gas industry is one that is adding people, not scaling back," Haynes added. "We've seen at least a 15% increase, industry-wide, over the past several years, even during the downturn." Last year, Spectra hired 130 people and it's already brought on about 129 this year.

Dave Pursell, managing director and head of securities for Houston-based research firm Tudor Pickering Holt & Co., said an analysis of shale-gas fields in the United States revealed that nearly all remain profitable with oil at $80 a barrel or less. On July 25, oil was still $100 a barrel; on Tuesday, crude futures rose 1% to $82.

"The velocity of the drop has gotten people's attention," according to Pursell. "But companies aren't going to change their strategic hiring based on a two-week move in oil."

To be sure, the industry contracted during the 2008-09 financial crisis as it became more difficult for companies to get funding for their drilling programs, but so far, that doesn't seem to be happening, he said. The 2008 crisis, for instance, saw a much steeper drop in natural-gas prices than now.

Engineers wanted

While the U.S. jobs figures for July came in better than expected, the overall picture for employment remains moribund -- outside of the energy sector.

Among the hotter areas for employment growth: Some 50,000 job additions this year are expected for the Barnett shale of Texas, and 48,000 in the Marcellus shale of Pennsylvania, West Virginia, Ohio and New York, according to the IPAA.

Besides the Barnett and Marcellus shales, U.S. energy companies plan to beef up rolls in the Haynesville shale of Texas and Louisiana, the Eagle Ford of South Texas, the Bakken of North Dakota and Utica formations of Ohio.

Hiring activity also has picked up as natural-gas firms focus on more labor-intensive oil drilling; plus, companies need to drill to hold acreage under most of their leases with property owners, Tudor Pickering's Pursell pointed out.

Another incentive to drill is to get higher-priced Louisiana sweet crude, which fetches a price near the Brent crude level of $100 a barrel, he said. "Companies are drilling because they want growth. And drilling for oil still makes money with oil below $80 a barrel in most areas."

Some of the most sought-after job candidates in the energy sector right now are petroleum engineers -- a specialization in charge of technology used to maximize returns from wells, according to Apache spokesman Bill Mintz.

"One area of concern in the industry is that a lot of petroleum engineers are in their 50s and expected to retire," he said.

Chip Minty, spokesman for Devon, said the company currently has more than 300 openings right now and no plans to curtail hiring.

"The swing we've seen in oil and equity prices does not have a bearing on our long-term operational objectives," he commented. "We do analysis as we put together our budget. We use market prices that are quite conservative. Even if oil and natural gas dropped below where they are today, we'd still be looking at wells that are economical."

Apache's Mintz said the independent energy company's ranks rose to 4,500 in 2010 up from 3,500 in 2009, and more jobs are coming in 2011. "We're continuing to hire. We've got a lot going on in all of our regions."

The company has been recruiting graduates from the Colorado School of Mines, Texas A&M University, Texas Tech University, the University of Oklahoma, University of Texas and the University of Tulsa.

Asked if Chesapeake planned to scale back hiring this year in the wake of Monday's big selloff in the equities market, company spokesman Jim Gipson said "nope," and referred to a local newspaper report about economic expansion in Oklahoma City, Chesapeake's headquarters.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Iraq Oil Ministry Qualifies 41 International Firms for New Bid Round

- Iraq Oil Ministry Qualifies 41 International Firms for New Bid Round

Monday, August 08, 2011
Dow Jones Newswires
AMMAN
by Hassan Hafidh

The Iraqi oil ministry has qualified some 41 international companies to compete for 12 exploration blocks in the next bidding round which is scheduled to be held in January, the ministry said in statement Monday.

Iraq, which sits on the world's third largest oil reserves, has estimated that the new blocks would add some 10 billion barrels of oil to Iraq's current reserves of 143 billion barrels, and some 29 trillion cubic feet of gas to its current reserves of 112.6 trillion cubic feet.

Among the companies qualified by the ministry for the licensing auction are some of the world's oil majors such as BP, Shell, ExxonMobil, Lukoil, Total, China National Petroleum Corp., or CNPC, Eni, Occidental Petroleum Corp. (OXY) and Chevron.

The list also includes nine Japanese firms. They are, among others, INPEX, Japan Oil, Gas and Metals National Corp., or JOGMEC, Mitsui Oil Exploration Co. Ltd, JX Nippon Oil & Gas Exploration Corp., or JX-NOEX, Itochu, Mitsubishi, and Japan Petroleum exploration Co. Ltd, known as Japex.

Two Arab companies are listed by the ministry. They are Mubadala Oil & Gas of the United Arab Emirates, and Kuwait Energy of Kuwait.

The ministry said the chosen companies are among 50 firms who submitted applications and documents to take part in the bidding round, scheduled to be held in January next year.

Many of the listed companies have won deals to upgrade Iraq's vast oil and gas fields. Baghdad has held three bidding rounds in the past two years to auction off 15 of the country's most prized oil and gas fields.

Three of the announced blocks are located in the western Anbar province while two others are shared by the Anbar, Nineveh and Najaf governorates. The sixth is in Nineveh governorate in northern Iraq. These six are believed to contain gas resources, oil ministry officials said.

The remaining five blocks, believed to contain crude oil resources, are located in other governorates including Basra, Dhi Qar (Nassiriyah), Muthanna (Samawa), Babil, Najaf, Wasit and Diyala provinces, the officials said.

The size of the blocks range from 5,500 square kilometers to 9,000 square kilometers, they added.

Iraq needs to boost gas production and build more gas-fired power plants to increase its power output, currently at 6,500 megawatts, which represent less than half the country's needs.

Although international companies would prefer production-sharing contracts for exploration blocks, Iraqi oil officials said the deals would be based on a service contract, which means winning companies will be paid a flat fee for their services rather than be given a share in the resources. But it would be slightly different from the 20-year service contract offered in the previous three bidding rounds, they said.

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Several Firms Show Interest in New Iraq Oil Bidding Round

- Several Firms Show Interest in New Iraq Oil Bidding Round

Thursday, July 07, 2011
Dow Jones Newswires
AMMAN
by Hassan Hafidh

Several international companies have submitted documents to the Iraqi oil ministry to qualify them to take part in the country's fourth oil and gas licensing auction scheduled for January, one document and persons close to the ministry said Thursday.

According to people who saw a recent document issued by the oil ministry, at least 27 international companies have paid fees to the ministry to qualify them to take part in the bidding round to auction 12 exploration blocks located in various parts of Iraq.

"The ministry is studying documents of these companies and a list of pre-qualified companies is expected to be issued within the next two weeks," a ministry official, who asked not to be name for security reasons, said.

Among the companies mentioned on the oil ministry's list that want to take part in the auction are Chevron, ONGC Videsh Ltd., Vitol Holding B.V., GulfSands Petroleum, Enel Energia, Petrol Resources PLC, TNK-BP, and Dana Petroleum.

The list also includes six Japanese firms. They are INPEX, Japan Oil, Gas and Metals National Corp., or JOGMEC, Mitsui Oil Exploration, JX Nippon O&G, or JX-NOEX, Itochu and Toyota Tsusho.

The only Arab company in the list is Mubadala Oil & Gas of the United Arab Emirates.

Iraq, which sits on the world's third largest oil reserves, has held three bidding rounds in the past two years to auction off 15 of the country's most prized oil and gas fields.

Three of the announced blocks are located in the western Anbar province while two others are shared by the Anbar, Nineveh and Najaf governorates. The sixth is in Nineveh governorate in northern Iraq. These six are believed to contain gas resources, oil ministry officials said.

The remaining five blocks, believed to contain crude oil resources, are located in other governorates including Basra, Dhi Qar (Nassiriyah), Muthanna (Samawa), Babil, Najaf, Wasit and Diyala provinces, the officials said.

The size of the blocks range from 5,500 square kilometers to 9,000 square kilometers, they added.

Iraq needs to boost gas production and build more gas-fired power plants to increase its power output, currently at 6,500 megawatts, which represent less than half the country's needs.

Although international companies would prefer production-sharing contracts for exploration blocks, Iraqi oil officials said the deals would be based on a service contract, which means winning companies will be paid a flat fee for their services rather than be given a share in the resources. But it would be slightly different from the 20-year service contract offered in the previous three bidding rounds, they said.

"The remuneration fee for each produced barrel or equivalent in the exploration contracts is expected to be more than that in the awarded oil fields," one official said.


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Jakarta Aims to Attract Energy Firms

- Jakarta Aims to Attract Energy Firms

Friday, June 03, 2011
Knight Ridder/Tribune Business News
by Lynn Lee, The Straits Times, Singapore / Asia News

As more people and more vehicles push up demand for energy in Indonesia, the government is under pressure to crank up the output of crude oil and gas.

But first it will have to win over investors -- including foreign firms with deep pockets -- to explore new sites.

These investors complain of a lack of reliable data on oil and gas reserves, frequent changes to laws, and conflicting legal interpretations between the central and local governments as barriers to investment.

All that makes their 15 percent share of the profit split with the government unattractive, they say.

Major players in Indonesia include Chevron from the United States and French oil giant Total. Indonesia's state-owned firm Pertamina accounts for around 15 percent of crude oil production, and owns the eight refineries supplying petrol to the domestic market.

Energy analyst Kuturbi, who like many Indonesians goes by one name, said current oil prices of around US $100 per barrel should be an incentive for companies to take part in oil exploration.

"But since there is low interest, this signals that something is wrong with how the government is managing investment in oil exploration," said Dr. Kuturbi, who is from the Centre for Petroleum and Energy Economics Studies in Jakarta.

Last year, only 21 exploration contracts between investors and the government were signed, compared to 34 in 2008. Two weeks ago, the government offered 20 oil and gas blocks in the first round of tenders this year, and said it would consider giving investors a bigger cut of profits and more favorable tax rates if they explored less accessible sites, such as those in eastern Indonesia.

The director-general of oil and gas at the Energy and Minerals Ministry, Ms Evita Legowo, said the ministry would try to find money for more detailed geological studies.

"We will try for this in the 2012 fiscal year. We haven't got the budget for it now... and some investors are waiting to see if we amend the oil and gas law before they decide whether or not to invest," she said earlier this week.

Mr. Kuturbi pointed out that around 70 percent of exploration contracts signed between 2002 and 2008 experienced delays in starting work, further depressing oil production. Oil and gas regulator BP Migas said these were due to problems with land acquisition to drill wells and poor project management.

Crude oil production -- at around 1.5 million barrels per day in the 1990s -- has in the past few years dropped to between 900,000 and 960,000 barrels per day, below the government's target of around 970,000 barrels. Gas production has been going up but Indonesia exports gas to countries such as Singapore, keeping only half of its output for domestic use by the state electricity company and industries.

The government also aims to raise renewable energy -- such as geothermal and biomass sources -- to 17 per cent of Indonesia's energy mix by 2025.

Energy analyst Pri Agung Rakhmanto, from the Jakarta-based Reforminer Institute, said the government would have to go back to the drawing board and ensure there was a decent investment climate for energy.

"It cannot just be business as usual," he said. "Otherwise, we will not be able to meet our own energy needs in future."

Copyright (c) 2011, The Straits Times, Singapore / Asia News Network

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Both Williams Firms Tap Strong Q1 Returns

Both Williams Firms Tap Strong Q1 Returns

Thursday, May 05, 2011
Tulsa World, Okla.
by Rod Walton

Williams Cos. Inc. and Williams Partners LP both exceeded $300 million in profits for 2011's first quarter, the Tulsa natural gas, oil and natural gas liquids firms reported Wednesday.

Higher NGL margins sparked the strong returns for the three months ending March 31. Parent Williams tapped $321 million, or 54 cents per share, in net income while Williams Partners totaled $307 million, or 81 cents per unit, in profit.

"We're off to a good start this year, and we're expecting an even stronger performance for the remainder of 2011 and 2012," Alan Armstrong, president and chief executive officer, said in a statement. "We've increased our earnings guidance 11 percent for both years, as we expect strong NGL and olefin margins in our midstream businesses."

Williams Cos. net income was a dramatic increase over 2010's first quarter, when the company announced a $195 million net loss. Williams Partners' total was down slightly from the $322 million same time last year, but 33 percent higher on a per-unit basis, according to the release.

The traditionally natural gas-rich Tulsa company has upped its stake in oil and NGL plays in the past year due to higher prices and increased demand for ethane for use in petrochemical production. Williams has $4.8 billion in growth capital projects planned through 2012.

"We continue to invest in and bring more value-adding natural gas and NGL infrastructure projects online," Armstrong added. "With abundant supplies in the new shale plays and growing demand from natural gas-fired electrical generation, the need for natural gas infrastructure will continue to grow."

Williams Cos. is focused on infrastructure, exploration and production although a new subsidiary, WPX Energy Inc., will spin off the E&P segment in the near future. Williams Partners handles natural gas and NGL gathering, transport and processing assets.

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China Short Lists 6 Firms for First Shale Gas Auction

China Short Lists 6 Firms for First Shale Gas Auction

Tuesday, April 26, 2011
Dow Jones Newswires
by Jing Yang

China has short listed six domestic firms to participate in the nation's first shale gas auction, which has been postponed to May, an official with the Ministry of Land and Resources said Tuesday.

Shale gas, which recent technologies have started liberating from relatively impermeable rock, could help China to slow its growing reliance on imported energy. Chinese companies have been gaining know-how in the shale gas drilling from pioneering U.S. partners. The auction marks a move to exploit on a large scale the clean-burning fuel, of which it has identified massive reserves.

The six firms--PetroChina, China Petroleum & Chemical, Cnooc, Shaanxi Yanchang Petroleum Group, China United Coal Bed Methane and Henan Provincial Coal Seam Gas Development and Utilization--will bid for eight shale gas blocks, the official said.

The ministry will likely hold at least one more auction later this year, which could allow more companies, such as Sinochem Group and China Zhenhua Oil Co., to participate. As these two companies don't yet have domestic mining licenses, they can't bid in the current tender, he said.

Technical advances allowing the development of shale gas have transformed the U.S. energy sector in recent years, prompting a wave of merger-and-acquisition activity and sharply reducing reliance on gas imports.

Earlier this year, Cnooc Ltd. bought into several shale oil and gas leases in the U.S. owned by Chesapeake for $570 million in cash, following a similar deal in October.

A recent report from the U.S. Energy Information Administration showed that China holds 1,275 trillion cubic feet of technically recoverable shale gas reserves, the largest in the world.

The nation has invited U.S. and European companies into its tightly controlled onshore gas acreage in order to gain technical know-how. The firms that win blocks in the upcoming auction will also be allowed to work with foreign companies.

PetroChina completed the drilling of China's first horizontal shale gas well last month in Sichuan province. Horizontal shale gas wells are more productive and have proven to be more commercially viable compared with vertical wells.

Production of unconventional gas, such as coal bed methane and shale gas, is expected to reach 20 billion cubic meters annually by 2020, while output of conventional natural gas will rise to 200 billion cubic meters a year, the Research Institute of Economics and Technology of China National Petroleum Corp. forecast in an annual report earlier this year.

UK Oil Firms to Brief Lawmakers Next Month on Tax Hike Impact

UK Oil Firms to Brief Lawmakers Next Month on Tax Hike Impact

Monday, April 04, 2011
Dow Jones Newswires
by  Alexis Flynn

U.K. lawmakers will hear submissions next month from the country's major oil and gas producers as to how a large tax increase is affecting the industry, the Energy and Climate Change Committee said Monday.

In a one-off evidence session scheduled for May 4, members of the parliamentary committee will hear oral submissions from Oil & Gas UK and the Oil and Gas Independents' Association.
The meeting comes as several large companies said they were reconsidering billions of pounds of investments in oil and gas production after a shock tax increase in Chancellor of the Exchequer George Osborne's budget two weeks ago.

In a statement confirming it will participate in the session, Oil & Gas UK said it was consulting its members to quantify the full impact of the budget move on investment and will publish the findings by the end of April.