In this issue, we hear from two pillars of the industry, one an internationally recognized scholar with 30 years in academia, and the other a senior corporate executive with more than 25 years’ E&P experience. Professor Larry W. Lake describes the full oil-price cycles in our industry that he has witnessed firsthand, discussing how best to deal with them and the possible benefits they may have for our careers. Rubén Caligari, Senior Adviser, Knowledge Management, Petrobras, is optimistic about the future, despite the current downturn. He reminds us of the long-term growth prospects for global energy demand and the wide-ranging challenges we will face to fulfill it. – Luis Ayala, Andrés Zoldi, and James T. Edwards, Editors, Pillars of the Industry
“I’ve been rich and I’ve been poor. Rich is better.”
That line, variously attributed to Mae West, Sophie Tucker, and Mel Brooks, speaks to cycles in life. And in a career. I have worked for 35 years, long enough to have seen a full cycle, peak to peak and then some, in the hydrocarbon producing industry. Allow me to share some observations gleaned from this experience.
Longevity can breed cynicism, and I certainly have my share—associated mostly with the inability of our industry to understand or even acknowledge that there are cycles. Or when rarely it does acknowledge them, it always seems to be someone else’s fault: stock prices; stock analysts; costs; oil prices; that ever-available excuse, OPEC; or, most recently, the economy and the financial crisis. But, depending on the circumstances, these are all good reasons and inevitable. So the challenge is to manage our careers through the cycles: survive during the downs, prosper from the ups, and above all, grow personally and professionally. It could hardly be more timely or instructive to talk about the cycles and how to deal with them.
First, we should acknowledge the obvious. All technically based industries have cycles (see dotcom and investment banking) so they are impossible to avoid. Well, you could hedge. My former colleague Mark Miller said that the safest bet was to be an aerospace/petroleum engineering double major because when one was up, the other was down. However, don’t believe anyone who, living in the valley (at the peak) says that things simply will continue to decrease (increase). It is always a question of timing.
As times change, so do management attitudes. When times are good the industry will say, “People are our most important asset.” When they are bad, it is, “You are responsible for managing your own career.” Even here, rarely is there a desire to take a broad view of the ups and downs.
A second point is that you can benefit from cycles. It is easy to see the potential when times are good, the proverbial rising tide lifting all. But it is also true when times are bad because such times force re-evaluation of opportunities, and more personal growth. Former students occasionally tell me that being laid off was the best thing that happened to them because they made a change that they never would have made had times remained good. All of those production companies newly founded in the past 15 years are firsthand evidence of opportunity taken during down times.
Obviously we are responsible for our own careers. Here are some highly personal pointers for exercising that responsibility.
- Own your work. Even though the results of your work ultimately benefit a larger endeavor, you should take the attitude that the product of your efforts belongs to you. It is as though you were working to produce hydrocarbon just for yourself.
- Keep learning, for gosh sakes. The obviousness of this is becoming blunted by clumsy efforts (mandatory post-graduate training for professional registration, for example) to force this down our throats. But it is true that you can and should learn from just about everything you do. No one is beyond learning more, even university professors. The noted 19th-century performer Frederic Chopin, arguably the best pianist of his day, regularly took piano lessons.
- Challenge the convention. Remember that new ideas based on no background are usually worthless, if not completely crazy. Learning keeps you up to date so that you actually can see a good new idea. In the here-and-now world, some of the most profound changes are not easily apparent. No one thought we could produce hydrocarbon from shale 15 years ago and as we are doing today. There are geoscientists who have some “splainin” to do on that one. The same is true of deepwater production.
- Write, write, write. We constantly encourage students to communicate better. King PowerPoint being in ascendance, communication usually means giving presentations. Without disparaging presentations in the slightest, the best indicator of success over the long haul is to write. Anything will do—reports, abstracts, memos, technical papers, letters, and yes even email. How many times have you heard someone say after a presentation, “Get me something in writing on this”? Writing is still important because it is what begets action.
- Stay with technology. This is my most important point. It is easy to be beguiled by the excitement of deal-making, management, or finance. These are all important and honorable endeavors, and in no way do I suggest you not consider them. Many former students do this through law school or obtaining MBAs (and, alas, few through graduate school). But technology is the base of everything. So many times, successful managers or lawyers say that their engineering degree, primarily the way they were taught to think through earning that degree, gave them a clear competitive edge in their work. It always seems to be the nontechnical people who suffer the most during a down period. And managers almost always come from the technical ranks, rarely from outside.
Thirty-five years ago when I began with Shell (my true graduate experience) as a chemical engineering PhD, I did not know the difference between upstream and downstream. It was all learning for me from day one, and my choice of career proved serendipitous. I would not change a thing. I cannot conceive of a more interesting set of technical problems; nor can I image a group of more highly motivated and intelligent professionals. None of my classmates that have gone into other fields have been exposed to work as interesting as mine. Few have had the opportunity to see the world that I have. Flying into a country outside the US, even if only for a few days, causes dramatic changes of perspective. When asked by incoming students why they should go into petroleum engineering my best answer is, “because we have the most interesting work.”
Part of the reason for the interesting work is diversity. We are at core a single-product industry: hydrocarbons. But confronting nature, geology, economics, and uncertainty daily requires an immense skill set. Problems are being tackled by engineers (petroleum, chemical, civil, and mechanical mainly), geologists, economists, biologists, and managers from all over the world every day. Our work is interesting because solutions are difficult.
Drake’s Folly was drilled in western Pennsylvania in 1859. This was only 2 years before the start of the American Civil War and not too long after the aforementioned Chopin was performing. This means that our industry is 150 years old. Few other industries have been around this long. The longevity is a mark of the importance of hydrocarbons to our way of life, especially to transportation. There is no reason to expect the challenges to be any less significant or the work to be any less interesting in the future, cycles or not.
