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FT REPORT – WORKING IN THE OIL & GAS INDUSTRY 2008: There are still jobs for life

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FT REPORT – WORKING IN THE OIL & GAS INDUSTRY 2008: There are still jobs for life

By Carola Hoyos
Published: May 06, 2008

Looking out on to pristine coastlines in Asia while helicopter blades pulsate overhead; avoiding snakes and herds of oxen in a rugged sports utility vehicle; braving pelting rain on drilling rigs; and making technology breakthroughs while sipping milkshakes in the Netherlands with your stroppy teenage son – these are all part of life working in oil and gas exploration and production at Royal Dutch Shell. Or so the company’s advertising film would have you believe.

In their quest to attract fresh talent, oil companies such as Shell and Total of France have come up with some captivating television and film advertising campaigns. Chevron has an aggressive ad campaign, highlighting the challenge of finding enough oil to feed the ever hungrier economies of China and India.

What they have in common is that they are aimed at the potential employee rather than investors and customers. Oil companies are desperately trying to attract recruits, from graduate trainees to senior executives, at a time when the industry is ageing because of a dearth of candidates.

But is the job really as Shell portrays it? The answer is that it depends where you work. Shell’s film was made in south-east Asia.

Had it been made in Nigeria, where the company has its biggest operations, the scenes would have been quite different.

A helicopter flight over the Niger Delta reveals slicks of oil winding their way through the mangroves and a darkened skyline of grey smoke caused by the flaring of unwanted natural gas.

Shell staff in Port Harcourt stay on a 1950s’ style military campus, with bars on the windows and security grilles on bedroom doors in case of a siege.

Curfews have had to be instituted, as Nigerian militias have taken to kidnapping western oil company staff to publicise the miserable plight of a country rich in oil, but poor on just about every other measure.

But Port Harcourt has long been a critical stop on the career path of anyone wanting to make it to the top of the company’s vast exploration and production business, or E&P for short.
Nigeria may be one of the world’s most depressing oil patches, but Shell is seen as one of the industry’s most progressive companies.

It scored better than many of its peers in Transparency International’s recent report on how oil and gas companies were doing with regard to corruption.

In its ranking of 26 big companies operating outside their home countries, only Royal Dutch Shell – of the big multinationals – wins entry to the eight-strong top bracket. BP, Chevron and France’s Total made it into a middle tier of nine, while Exxon-Mobil ranked in the bottom group.
Such rankings are important because working in E&P is not only about geology and dizzyingly impressive feats of engineering. Negotiating with governments that jealously guard their most precious resources, and navigating political pitfalls and endemic corruption are crucial talents.
Many people stick with the big oil companies for their entire career. Fergus Wilson, a consultant at Spencer Stuart, the executive search firm, says: “They are the last bastion of ‘jobs for life’. People who work for oil companies often feel awkward in the transition to a job elsewhere. There is a sense of ‘why am I doing this?'”

The answer for many is that the head of E&P at big oil companies usually comes from within and the next step on the career ladder is often that of chief executive.

But there are few who make it to the top, with its perks and responsibilities of deciding how to spend $20bn-plus a year and making the lion’s share of the company’s profits.

The pressure is immense: finding new oil and gas is becoming more difficult, as costs of labour and equipment skyrocket, while expanding production is proving ever more challenging as the biggest oil fields age and output declines.

But there are alternatives to clambering up the greasy pole. In 2006, Lisa Stewart, a petroleum engineer, traded in her job as El Paso’s president of E&P, where she was charged with making her department at the US company more efficient.

She became the chief executive of Sheridan Production Partners, a start-up of Warburg Pincus, the private equity firm, and she now scours the US for oil and gas.

Lord Browne, BP’s chief executive, who had come up through the ranks of E&P, also moved to private equity after his retirement last year. He joined several other former BP-ers at Riverstone, the $6bn private equity firm investing in energy ventures.

Other E&P retirees have become consultants, in the lucrative business of helping companies fill the huge gap of talent caused by the mass lay-offs in the 1980s when oil prices plummeted.

The world of E&P may not be as sexy and slick as Shell’s film would suggest, but it does offer its share of political intrigue, voyages in exotic lands, multi-billion pound gadgetry, hefty paychecks and a springboard to new adventures.

Copyright The Financial Times Limited 2008

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