An Ocean of Resources Is it drying up?Susan Cunningham26/1/2005Noble EnergyIncfor OTC 2005Outline Current Situation focused on Geoscience and and Independents perspective StatisticsU.S. - Geologists and GeophysicistsU.S. - University enrollment and degrees grantedHigh Tech Industry vs Oil & Gas IndustryForeign Students Dynamics of Entire Resource Supply Beyond the Majors What Can we Do?36/1/2005Noble EnergyIncfor OTC 2005Current Situation With prices up, the industry is starting to consider long term real growth and a increase in resources Even though oil & gas prices are up, employment appears to be down to flat is this true? It will take more than ten years of graduates to replace current employment with no highgrading at recent employment and graduation rates in the U.S. Last Time the Majors had extensive training programs and aggressive internships and campus hiring Independents generally hire away from the Majors and are currently hiring away from the service companies Can we afford to cannibalize, and push the price up this time?46/1/2005Noble EnergyIncfor OTC 2005E & P Workforce01020304050601950 1960 1970 1980 1990 2000 2010 2020 2030Agein YearsAverage AgeCurrent Mangers HiredSource:Knowledge Management & New IT Architecture Will Maximize Up Stream Value CreationJ.W. Gibson - Landmark Graphics World Energy, Vol. 3, No. 2 - 200056/1/2005Noble EnergyIncfor OTC 2005AAPG Membership Age DynamicsWe Are Virtually In 1977 No Baby Boom to Draw From66/1/2005Noble EnergyIncfor OTC 2005Demographics of Oil & Gas Industry Societies05101520253035404565Age% WorkforceOil & Gas distributionTypical technology companyData courtesy of M.Minyard - Oil & Gas Investor (Oct 2003)We are a high tech industry but no-one knows it except us!86/1/2005Noble EnergyIncfor OTC 2005AAPG Membership Trends 40% Drop in U.S. Membership in 20 years 25% Increase in International Membership Indicator of Global Talent Pool and Job Growth?96/1/2005Noble EnergyIncfor OTC 2005Foreign Students Coming to U.S.: 2003-20045 10% Drop in Foreign Students Entering U.S. Universities-20-15-10-50510IndiaPercentage ChangeHong KongTaiwan JapanChinaIndonesiaSouth KoreaUKEuropeMiddle EastPakistanThailandSource: Schlumberger106/1/2005Noble EnergyIncfor OTC 2005U.S. Operators and Upstream Employment02,0004,0006,0008,00010,00012,00014,0001975 1980 1985 1990 1995 2000 2002# Operators0100200300400500600700800Upstream Employment (X1000)# OperatorsUpstream1985 - 200285% Drop in Operators 45% Drop in Upstream Employment86% Drop in Exploration wellsSource: IPAA116/1/2005Noble EnergyIncfor OTC 2005Employment in U.S. Sector01002003004005006007008009001980 1990 2000 2002UpstreamRefiningTransportationRetail/WholesaleEmployment is currently flattening out to increasingSource: IPAA126/1/2005Noble EnergyIncfor OTC 2005Employment in the Majors0204060801001201401601801980 1990 2000 2004ExxonMobShellBPConocoPhilChevTexTwo of the Five Majors currently employ more than they did in 1980Source: J. Herald136/1/2005Noble EnergyIncfor OTC 2005Dynamics of the Resource SupplyBeyond the Majors AAPG Membership0200040006000800010000120001990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003Consultants/IndependentsMajorsIndependent Co's (top 50)Service CompaniesCurrently twice as many Consultants as people employed by Majors or Top Independents How much are they currently supplementing these companies?Source: AAPG146/1/2005Noble EnergyIncfor OTC 2005Where are Geoscientists Employed?Using AAPG Membership as a Proxy for Employment: 25 30% are Consultants Independents Employ ~ 25% Majors Employ ~ 11% Service Companys Employ ~ 5% 156/1/2005Noble EnergyIncfor OTC 2005Geoscience Enrollment and Degrees Granted U.S.5001,0001,5002,0002,5003,0003,5004,000195519651975198519952003UndergraduateGraduateDegrees Granted0Degrees GrantedSource: American Geological Institute166/1/2005Noble EnergyIncfor OTC 2005Geoscientist Supply and DemandU.S. Grads and Employment in Industry0500010000150002000025000300001990 1995 2000 2003EmployedGeoscientistsNew GradDegree'sSource: AAPG membership categories as proxy, APILost SupplyTakes 10+ years to replace employees at current levels, with no highgrading176/1/2005Noble EnergyIncfor OTC 2005Where Will Tomorrows Employees Come From? Domestic Students Petroleum Degrees and Training Foreign Students U.S. Colleges International Locations Local Hires Foreign Students Non U.S. Degrees Retraining from other Industries?186/1/2005Noble EnergyIncfor OTC 2005UK: Re-Training (Extract from Upstream 22 April 2005)WorkersfromtheMGRovercarplantintheUKcouldbeofferedthe chance to help plug a shortage of experienced engineers in the UK North sea oil and gas industry.TheAmicusunionhascalledontheUKsDepartmentofTradeand industryandtheScottishExecutivetooffertoconductaskillsand training audit to help transfer some of the 6,000 workers laid off at the MGRovercarplantandupto15,000fromitssupplychain,totheoil industry.the age profile of offshore workers is now 50. There is a definite need foryoungerskilledworkerswellintothecentury.Hopefullysomeofthe workersfromMGRovercanplayapart..manyoffshorecontractorsin theUKarefacingalackofexperiencedengineersonoilandgas installations in the North Sea..Wehavehadsomedifficultiesinattractingyoungerpeoplebecauseof themoreattractiveimagethatperhapsotherindustrysectorsmay haveSource: Upstream, 22 April 2005 Page 14196/1/2005Noble EnergyIncfor OTC 2005Interstate Oil and Gas Compact Commision PlanPremiseNational Effort is Required to Supply the Energy Industry Manpower Needs1. Federal Government: E&P Research and National Outreach Fund pilot programs, educate, public relations campaign, education tax credits for training Retaining foreign student populationSource: Petroleum Professionals Blue Ribbon Task Force, Governer John Hoeven, 2003; IOGCC206/1/2005Noble EnergyIncfor OTC 20052. State Government Education of public and stakeholders3. Industry: On-the-Ground Focus and Involvement Dedicate financial resources to public education and scholarship programs Create internship program and seek internship relationship with state university system, in states in which you do business Create annual industry science fair and field trips for the public and students, provide summer jobs, job fairs at high schools and colleges Organize within the state and industry team to assist in formulating long-term solutionsSource: Petroleum Professionals Blue Ribbon Task Force, Governer John Hoeven, 2003; IOGCC216/1/2005Noble EnergyIncfor OTC 2005Discussion What can your societies do? What can OTC do? What can your company do? What can you do? What are you doing?Public Relations and EducationIts time to organize. Demand it of yourselves, societies, companies and governments. Hiding our heads in the sand has gotten us this far..