Succeeding at Petroleum Engineering in a Digital Age
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Q Engineering sells a cloud-based program that statistically predicts future production. Using its Typecurve Studio, a user can forecast 500 decline curves a minute after the data are downloaded from a database, said Mark Bahorich, the cofounder of Q, which was recently acquired by Enervus. Doing that manually would take from 2–5 minutes per well, or about 16–42 hours, he said.
The downside of having a machine do it is that engineers once earned good money doing those boring jobs. If one person can do what 10 to 20 people once did, “you are getting rid of 9 or 19 jobs, or they need to find new stuff to do,” said Nathan Meehan, president of Gaffney, Cline, and Associates and 2016 SPE president.
Long-term careers in petroleum engineering in the future will depend on an engineer’s ability to find valuable things to do.
It is not a new challenge. Exploration and production is a cyclical business where engineers are possible targets when business slumps and cost cutting is required. Survivors often have additional skills, such as project management, team leadership, digital knowledge, or specialized technical knowledge.
During a presentation on lessons learned during a long career in the oil business, Hon-Chung Lau, a professor in the Department of Civil and Environment Engineering at the National University of Singapore, described the decades of effort required over a career, which he breaks into three, 12-year stages (SPE 196027).
Those who successfully reach the last stage of their career may feel secure. But Lau warns, “That is the stage when your career may be at risk.” Those who see a hefty paycheck as a sign of their value to the organization need to consider that earning the same salary as two new hires could make them a layoff target, he said during a presentation at the 2019 SPE Annual Technical Conference and Exhibition.
Early in their careers, engineers need to focus on technical skills—one of Lau’s recommended early career goals is to master technical skills to the point where you can teach others. Learning to work effectively with others is also critical. “It is common sense but unfortunately not realized by every engineer,” he said.
Advancement requires a willingness to “expand beyond the comfort zone” by learning the business, working to move into a leadership role, and developing skills outside one’s discipline.
So what will it take to survive the transition to a more digitally focused, automated sector? Meehan said “being able to solve problems that have not been solved before is the most important thing engineers can do.”
“The parts of their jobs we automated allow them to focus on higher-value tasks. Technology in this case enables engineers to solve the right problems instead of the old ones,” he said.
Profiting From Uncertainty
The problems he is describing are hard, come with a risk of failure, and are likely to require learning things not taught in petroleum engineering classes. Success stories from veteran engineers vary, but they all include taking the initiative to broaden their capabilities.
For Meehan, a major step was going to graduate school at Stanford to earn a doctorate in 1989. He designed a program that included a research project that gave him an early look at building economic optimization into a technical model for hydraulically fractured wells.
“Really, the value of masters and PhD exposure is the opportunity to solve new and more difficult problems,” Meehan said, adding that it led to “getting a chance to do more interesting projects at work.”
For Sebnem Duzgun, it was her decision made while working on a PhD to pick up some skills that seemed totally unrelated at the time: uncertainty analysis and data mining.
“At the time, I was the only expert in the country of Turkey. I was asked to go in many different directions,” she said. Projects spanning multiple disciplines changed how she approaches problem solving.
“When I do research, everything comes out of curiosity. It comes with billions of questions,” she said. Initially she used data analytics to extract information from geospatial data, and that led to (projects in) other fields in business and academia, she said.
“You should interact with other people in other disciplines to see how they are approaching the problem. They may inspire you. I had that experience, I really enjoy it,” Duzgun said.
What she learned led to her job as a professor at Colorado School of Mines. Her current projects include developing a personalized training program using artificial intelligence to map training programs for mining engineers. Like petroleum engineers, mining engineers need to be able to work in a highly autonomous, digital working environment.
Cultivating a broader knowledge base gives engineers a wider perspective of possible solutions.
“First of all, we need more innovation and out-of-the-box thinking in engineering right now, In engineering education we didn’t have that kind of focus in the past,” Duzgun said.
Know the Business
Successful innovation requires an understanding of how things work in the business. “You need to have better management skills and an understanding of the business aspects of the work if it is a huge data-driven process involved in your work,” Duzgun said.
Often, engineers stumble when trying to advance because they fail to learn the culture of the business.
David Ramsden-Wood, Prevail Energy principal, is a petroleum engineer by training who said his career direction was defined by oil investment analysis he did on his own time, dating back to when he was an oil company intern.
Engineers limit their potential when they say, “I’m a technical person, not a business person. And so they don’t read even simple business books,” he said.
“If people want to get better they need to put in the effort to get better. It is like sports. And so, time needs to be dedicated to reading books, expanding your horizons, understanding the micro themes that drive the micro themes,” said Ramsden-Wood, who offers career advice in his book, What the $@&# is Wrong with Everybody Else? What They Didn’t Teach You in Business School.
Engineers also need to keep up with where technology is going. For example, Duzgun said technology is providing better ways to manage geological uncertainty.
Two engineers and a geologist did that a couple years ago while working for Repsol Canada. They created a method to evaluate unexplored unconventional acreage (SPE 189815). The paper they presented at the 2018 SPE Canada Unconventional Resources Conference addressed a problem Canadian companies are competing to solve—identifying the highest potential drilling targets in frontier areas with limited well data.
They developed a method to predict the potential value of undrilled blocks within a large region where few wells have been drilled. Since productivity varies significantly within these plays, they evaluated smaller blocks. Their displays reflected the uncertainty in the Repsol acreage analysis.
After that effort, all three of the authors found jobs at other companies. The lead writer on the paper, Jeff Yip, now a petroleum engineer for Chevron, said having a mix of digital and petroleum engineering skills is valuable.
“Individuals who bring both technical and data-science skills to the table are a valuable commodity,” Yip said. Petroleum engineering and geology are required as a reality check. Otherwise, “based on statistical analysis, with sampling errors or sampling biases and that sort of thing, you can get some runaway conclusions that can take you in some crazy directions,” he said.
A good acronym to add to a resume now is SME, which stands for subject matter expert. SMEs can be in remote monitoring centers or on teams developing algorithms for maximizing drilling performance.
John Macpherson, chief consulting scientist for Baker Hughes, is seeing more SME hiring as a growing number of onshore and offshore rig workers move into remote monitoring and control centers. Growing use of autonomous drilling equipment is also creating opportunities.
Automation is associated with job cuts, but he said it is creating opportunities for SMEs as well.
Drilling SMEs may combine extensive drilling experience and a working knowledge of how digital control systems work in the field to provide critical feedback for those programming new or improved systems.
At Hess, directional drilling SMEs monitor three wells at a time. In addition to troubleshooting, they are using their experience to look for ways to improve the programmable drilling system.
“People are still critical. Machines do not learn by themselves, people learn,” said Matt Isbell, drilling engineering advisor for Hess.
Greater efficiency can create jobs. “What is not always recognized is that remote operations [unmanning] leads to more efficiently drilled wells, which leads to more rigs being handled per unit of time, which leads to more SMEs being required,” Macpherson said.
Not Yet Experts
Young engineers are not likely to be hired as SMEs. “An SME is not a recent employee but one who has been in the field a while gaining experience, and who can then contribute in the collaborative, decision-making environment of a remote center,” Macpherson said.
Diverse skill sets are also required. For example, a drilling engineer who is familiar with mud logging and downhole tools may also have communication and leadership skills.
An SME’s value depends on the current demand in the job market for specialized skill sets. Still, an applicant offering a range of technical and managerial skills and experience is a positive in the long term.
As the population of older engineers dwindles, the industry will need to find a way to develop and keep SMEs.
“That brings us to training, which is being sorted out now. We need a pipeline developing SMEs and cross-training them,” Macpherson said.
One possibility would be to train future SMEs by putting them in a rover job—a junior position where the person would be moving from rig to rig setting up and troubleshooting drilling tools and interacting with a lot of people, Macpherson said.
Boom and bust cycles in the oil business change the age demographics of the industry. A massive wave of millennials swept into the business over the past decade, for example, as baby boomers hired in the 1980s retired.
At the biggest oil company, Saudi Aramco, about 70% of the upstream workforce is under the age of 35, said Nasir Al-Naimi, vice president of petroleum engineering and development for Saudi Aramco. The biggest service company, Schlumberger, reported that more than half of its workforce are millennials.
One side effect is that they will be competing to get the best jobs, find mentors, strive for leadership opportunities, and take assignments that allow them to show what they can do.
The number of students in US petroleum engineering schools may have hit bottom in this down cycle, said Lloyd Heinze, a petroleum engineering professor at Texas Tech University who tracks petroleum engineering graduation rates. Those with good grades are still getting jobs in this environment.
He described students in engineering programs now as “there for the right reasons.” That is shorthand among professors for students interested in getting into the business without the boom-era assumption that a petroleum engineering degree is a sure path to a high-paying career.
When Heinze surveyed petroleum engineering school enrollment last year, he noticed that, compared with US universities, enrollment at 11 non-US schools was “down but not nearly as dramatically.”
While the current mood in the US reflects the shale shakeout, which has sharply reduced US onshore service revenues, growth offshore and internationally offsets that drop, according to a report by Spears & Associates, which tracks the worldwide services business.
Al-Naimi voiced a widespread concern in the industry when he said it is tough to compete for high performers who are also being courted by big technology companies. But industry leaders often echo this message: the oil industry is a huge, high-tech business that needs people with special skills to lead it through this digital transition.
Succeeding at Petroleum Engineering in a Digital Age
Stephen Rassenfoss, JPT Emerging Technology Senior Editor
01 March 2020
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27 March 2020