Oil Industry: Wanted: Engineers, Geologists

Elizabeth Souder’s intriguing article in The Dallas Morning News suggested that “This is a great time to look for a job in the oil industry.” She reports that the current high oil prices have and aging industry workforce have increased enrollment in petroleum engineering and geology programs.

Before applying to petrotechnical programs or sending resumes to oil companies, prospective industry employees would be well-advised to heed the advice of Lauren Welker who said that “her peers don’t base career choices on commodity markets.”

Dropping Dollar Prompts Basis Change

OPEC members, Iran and Venezuela, have recently called for changing the currency basis for crude oil from US dollars to Euros. What’s behind this move?

The following graph shows the FOB prices of OPEC crude oil in $/B and Euros/B.

Oil Imports and High Prices Contribute to Trade Deficit

According to The Dallas Morning News of November 14, 2007, U.S. crude oil imports in 2006 were $225.2 billion. These imports accounted for 27.6% of the 2006 trade deficit of $817 billion. The U.S. had trade deficits with the OPEC countries led by Saudi Arabia, Venezuela and Venezuela. The U.S. had a $103.8 billion deficit with Saudi Arabia.

Will History Repeat Itself?

Over the period 2001-2006

* World oil consumption increased by 6.9 million b/d or 9%
* Demand growth in China accounted for 37% of the volume
* Increased consumption in the United States contributed 14%
* This growth occurred in spite of a 280% rise in OPEC oil prices from $19.73/B to $55.35/B

PetroChina Knocks ExxonMobil Out of First

PetroChina has become the world's largest public oil and gas company at $980 billion according to the Dallas Morning News. Its valuation is four times that of ExxonMobil.

PetroChina ranked 13th in oil equivalent reserves based on 2005 figures. National oil companies occupy the top spots led by Saudi Arabian Oil Company with over 300 billion barrels. Last year PetroChina had 20.5 billion barrels compared to ExxonMobil's 22.1 billion and Royal Dutch Shell's 11.3 billion. For a complete list of the top 50, please see Leading Oil and Gas Companies Around the World.

New and Old Beam Pumps

Somertimes when we think that something is a "modern" invention, it turns out to have been around a lot longer. Take for example, the beam pump, a staple of oilfield production since the early 20th century. The pump jack is used to bring oil from the reservoir below the surface to the surface.

How High Will Prices Go?

With crude oil prices in the $90 range, the average motorist is wondering how high gasoline prices will go. Crude oil spot prices were $94.16/B (West Texas Intermediate at Cushing, OK on 10/31/07) and average retail gasoline prices were $2.872/gallon (10/29/07).