Future need for geophysicists and geophysical research in the oil business?

Conclusions of a listening tour

KURT J. MARFURT, HUA-WEI ZHOU, K. K. SEKHARAN, ROBERT E. SHERIFF, STUART A. HALL, SEIICHI NAGIHARA, and ANNING HOU, Allied Geophysical Laboratories, University of Houston, Texas, U.S.
he primary product of the University of Houston is its students. The Allied Geophysics Laboratories (AGL) at the University of Houston embarked on a listening tour to find out where the jobs are for new geophysicists, which job skills our students needed, and how to fund our research. AGL was initiated by Fred Hilterman in 1977. In 1981 it had 37 consortia members that supported 40 graduate students. Today, 21 of those former sponsors no longer existvictims of hard times, mergers, and a contracting oil industry; we are down to nine sponsors. Half of our AGL students are part-timers working full time for Houstons oil and gas industry. National oil companies sponsor a quarter of our full-time students. The consortium model of funding university research is broken. Consortia are looked on as an expense to be justified by deliverables. Our sister consortia are under these same stresses, but in the United States we suffer more than those in the EEC, Canada, and Australia, where there is greater government support for graduate students. Almost every oil company lists technology and people in its top five corporate values. However, many oil companies have abandoned internal technology development or now outsource it. The job title of research geoscientist now hardly exists. Most of our visits on the listening tour were at company sites where we spoke mainly with technology champions or gatekeepers plus a few lead recruiters and top executives. We feel that almost everyone communicated their companies mission, vision, and values (whether or not they agreed with them). Our analysis consists mostly of anecdotal comments. With the following five questions and a blank pad of paper, we visited the companies listed in Table 1. 1) What is the job market for MS geophysics students? What skills should they have? 2) What is the job market for PhD geophysics students? What skills should they have? 3) In the past, what has AGL done (a) well and (b) poorly? (Not discussed here.) 4) What kind of R&D is appropriate for a university given the limitations on resources and talents? (Also not discussed here.) 5) What new models for industrial funding of university geophysical research are practicable? Jobs and skills required for MS geophysics students. Most geophysical jobs will continue to be at the MS rather than the BS and PhD levels. Geophysicists must be able to integrate multiple technologies. Most jobs in the oil companies will continue to be as seismic interpreters. Interpreters need to understand the effects that acquisition and processing have on the data volumes to be interpreted, and they must be able to use modern structural, sedimentological, and sequence-stratigraphical methodologies. In addition
974 THE LEADING EDGE SEPTEMBER 2000

Table 1. Companies involved on the listening tour Oil companies Geophysical technology companies
Apache BP Amoco Burlington Resources Ceja Conoco Elf Aquitaine Enron Global E & P ExxonMobil Marathon Petrobras Texaco Unocal Advanced Data Solutions CGG GX Technology Jason Geosystems Paradigm Geophysical PGS Roxar Scott Pickford (Core Labs) Veritas Western Geophysical (Baker Hughes)

to strong geology and geophysical skills, interpreters should understand the fundamentals of petroleum engineering and petroleum economics. Oil companies generally feel that students best learn to integrate data through an MS thesis. Oil companies offer internships to students doing research, often the ideal way for them to access large data sets. An internship is a hiring prerequisite for several oil companies. Computer and workstation skills are important, and most majors feel that students can best learn 3-D seismic interpretation on the job. In contrast, most independents (who place a higher value on 3-D seismic interpretation skills) recruit employees from the majors rather than directly from the universities. Specific 3-D interpretation products learned are not important because technology changes so rapidly that one has to relearn it every two years anyway! When asked to clarify the skills needed to be taught, companies emphasize mastery of the fundamentals. A basic understanding of physics and signal analysis was often mentioned, with the warning that employees do not receive this kind of training on the job. Most technical tasks such as acquisition design, 3-D data processing, depth migration, AVO analysis, and even log analysis have been outsourced to service companies, but oil companies emphasize the need to understand exactly what is involved in these. Geophysicists who receive bad data need to recognize it as such, be able to determine its cause, and know what can or cannot be done to improve it. They need to be able to determine what is real and what is artifact. This is where a geophysical interpreter has an advantage over a geologic interpreter. There was consensus on the value of team-taught courses in order to better integrate specialized topics. One majors solution to data integration was to hire computerliterate geologists who are already competent in basic log analysis, structural geology, and sequence stratigraphy, and teach them 3-D seismic interpretation on the job. While their job title is geophysical interpreter, this company wants geology MS students to understand 3-D seismic
SEPTEMBER 2000 THE LEADING EDGE 0000

Downloaded 30 Sep 2011 to 134.146.0.54. Redistribution subject to SEG license or copyright; see Terms of Use at http://segdl.org/

acquisition and signal analysis as part of their university training. When it comes to hiring new employees, the oil companies felt that technical skills ranked third or fourth down the list of requirements. Networking skills, relationships with colleagues, and informal communication skills are more important, whereas formal skills such as report writing and oral presentations are less important. Because the bulk of technical work is now done in service companies, being able to work as part of a team is essential. The job market for geophysicists in the oil companies is probably shrinking. Those hired by expanding independents do not compensate for the many jobs shed by the restructuring of the majors. Only one company seemed concerned that soon many more geophysicists will be retiring than are enrolled in universities today. One senior executive believed we neednt worry because new interpretation software technology will replace many current geophysicists. The job skills required by service companies are quite different from those needed by oil companies. The technical skills they require are more closely aligned to existing university curriculaseismic imaging, inversion, data processing, acquisition, signal analysis, geostatistics, velocity analysis, model building, pore pressure prediction, attribute analysis, reservoir characterization, etc. Nevertheless, because most technical interpretation is being carried out by service companies, new hires need a much stronger foundation in geology and reservoir engineering than the data processors of the past. The most important technical skills that a service company geophysicist needs to master are geology, signal analysis, computer science (including statistics and numerical analysis), and interactive programming. Most service companies find that a geophysicist is the best person to do interactive programming. Structured programming skills are needed (C, C++, and FORTRAN 90), while prototyping tools are somewhat frowned on. Service companies need to address the problems of data structure, data transfer rates, and parallelization, which are not addressed by higher-level software tools commonly used in the universities. There will also be many jobs for people to fix/edit/clean up incorrectly registered data. Many feel that interactive Java and other Web-based applications are on the horizon. Next to technology, formal communication skills are paramount in service and software companies. In essence, everyone is a marketer, whether doing a high-tech demo at a trade show or rolling out paper seismic sections for QC in a clients office. Extroverts thrive in a service company, particularly in the marketing and technical support roles. Strong writing skills are essential for software documentation and report writing. Service companies value internships with oil companies. Project management skills are also essentialprojects need to be well organized, and results need to be delivered on time and within the budget. Progress needs to be communicated clearly and continuously to clients. The traditional MS thesis is an excellent trial by fire in project management. Geophysicists in the service companies need to understand the linkage from acquisition (through navigation, processing, imaging, and AVO) to petrophysical interpretation and reservoir characterization. Expertise in only one of these areas limits a career and the ability to adapt to an ever-changing marketplace. Most jobs for a geophysicist who loves geophysical technology lie within the service and software companies. Service companies are still suffering from the downturn in oil prices followed by oil company mergers and reorganizations, and current job
976 THE LEADING EDGE SEPTEMBER 2000

opportunities are not readily available. Nevertheless, in contrast to the oil companies, service companies will need strong technical specialists if they are to compete and survive in the future. In addition, the job skills of computer programming, written and oral communication, and project management are easily transported to other industries when the oil industry is in a down cycle. Jobs and skills required for PhD geophysics students. Only three of the 12 oil companies interviewed still had research staffs, and two of these have significantly reduced research staffs as part of recent mergers. One research group offers services to the outside world in areas where the parent company does not compete, and thus behaves much like a service company. There are many PhDs working in oil companies. Although geologists become more generalized as they work toward a PhD, several oil companies felt that geophysicists became more specialized. Specialization is excellent within an oil company, as long as you have many specialists! PhD students should not expect to do research during their first job assignment; the right to do research has to be earned. I want to do research is a near-fatal statement when interviewing. One major hires only researchers internally (from its operating companies) or from competitors. Most jobs are in applying rather than in developing technology. There is a need in service companies for the rainmaker. Even with the current state of the oil business, there are numerous openings for geophysicists who can lead technology development in prestack migration, AVO, and reservoir characterization. Technology rainmakers appear to be well rewarded. Service companies are looking to new interdisciplinary PhDs to help them generate new markets in reservoir characterization and exploitation geophysics. Familiarity with reservoir simulators is a plus. A little additional higher math never hurts. Software companies and service companies differ in the programming skills required. The software companies prefer to hire professional computer programmers who put together bulletproof, user-friendly, well-documented interfaces. In contrast, service companies have little need for fancy front ends because they are the only ones who need to live with them. Instead, they want technology that sets them apart from the competitiontoday! They need folks who can dive into software, move files and objects around, and build new solutions to customer problems. Industry funding of geophysical research at universities. Consortia have been the mainstay of exploration geophysics research at universities for more than 25 years. Typically, a mix of university consortia was sponsored through oil or service company research or technology centers. Champions in industry would evaluate prototype software and methodologies and implement subsets either using their own manpower or through university interns and visiting professors. These technical champions were often networked, formally or informally, with oil or service company recruiting programs. In this way students were financially supported, trained, informally evaluated, and recruited. Both students and potential employers learned to know each other over a period of two to four years. Now the consortium model is broken, and this has a major impact on training the next generation of geophysicists, particularly in the United States. The most
SEPTEMBER 2000 THE LEADING EDGE 0000

Downloaded 30 Sep 2011 to 134.146.0.54. Redistribution subject to SEG license or copyright; see Terms of Use at http://segdl.org/

important factor is the disappearance of technical champions in industry. Most major oil companies no longer have research or technology centers, and those that remain are half their former size. Most independents, many of whom are multibillion-dollar enterprises, never had research or technology centers. Without technical people to implement the findings of university consortia, much of the value of this research evaporates. Almost every oil company values technology, and geophysical technology in particular. Nevertheless, the development and nurturing of technology have been outsourced to service and software companies. This outsourcing has not included the profit margin necessary to finance technology development, either internal to the service company or through service company support of university research. Research staffs at the largest service companies are now a fraction of the size they were 10 years ago. Mergers have impacted university consortia in a very negative way. Several key oil companies find it easier to buy oil on Wall Street than to find more with technology. Although the amount of oil produced and seismic data shot have increased steadily during this time, the support for university research has steadily dwindled. The bright spot in technology development is with small start-up service and software companies. Unfortunately, the future of these companies depends on a future successful initial public offering (IPO), and to achieve this, high-tech companies need to own their technology outright. Licensing agreements for intellectual property are a major impediment to increased support from new companies and from software companies in general. During our interviews, many companies suggested that we set up for-profit spin-off companies that would implement and commercialize university products. Although universities are free to license technology, most are proscribed by state law or nonprofit internal revenue tax laws from competing directly with private industry. We have learned of several models for funding university R&D. One of the more interesting has been that of an oil company or partnership of oil companies teaming up with a university and a service company to solve a given field-development problem. The oil company would fund and define the problem, the university would prototype alternative solutions, and the service company would earn start-up funds and the right to commercialize the product. Although this model has been championed for almost three years, we have yet to see it in practice. We are working to put such a relationship together. The primary purpose of geophysical consortia is to better align university R&D with industry needs and to support students. It is fairly easy for faculty to find supportperhaps on a consulting basiswith the oil industry. The difficulty is in supporting students, particularly those early in their graduate studies who are not yet able to produce a deliverable as required by a contract. The most promising avenue of student support is through more creative internships. Instead of a summer salary as a temporary employee, industry can partner with a university and have a student spend one or two days per week at their site during the academic year. Salaries and benefits can be handled cleanly through the university on a contractual agreement. Current student stipends require graduate students to work 20 hours per week as either a teaching assistant or as a graduate research assistant. The work is often unrelated to the students thesis work. Our current problem is convincing a company to commit to a program lasting more than one year, allow978 THE LEADING EDGE SEPTEMBER 2000

ing us to bring in a masters student for a two-year program of study. For students who dont live in an oil town such as Houston or Calgary, this ongoing internship will be more difficult to implement. Several companies have suggested that we replace students MS theses with intern reports. In the United States, state law or university policy requires that theses be published, whereas in Europe it is permissible to write a thesis that can be seen only by the sponsoring entity and the university faculty. We view this option as undesirable for the growth of knowledge and for the students rsum and future employability. Nevertheless, the real world requires that some scientific knowledge remains proprietary. The trick is to come up with an arrangement whereby the student earns financial support as an intern, learns valuable technical and communication skills along the way, and then applies this sweat equity and skills to a publicly open thesis that is disconnected from financial support. The most intriguing suggestion made was for industry support of university-conducted postmortems. The partnership would pay for the student and/or faculty support. Through the generosity of software and service companies, universities now have access to state-of-the-art processing and interpretation softwaretechnology that may not have been used on the dead prospect. More importantly, students have time to devote to both the project and to acquire basic knowledge, a scenario that is more difficult to nurture within industry. Both negative and positive results make excellent MS or PhD theses and technical papers. The final avenue of support for university research is through what professors do best. In this scenario, an oil company might enlist one if its own employees to address a given business units technical problem as part of his or her career development. In the absence of a research center, the oil company might be willing to pay a certain overhead to university faculty to oversee and provide guidance to this nontraditional student. The professor would have access to oil company data and appropriate resources. Conclusions. Although the corporate funding of university research is at a 20-year low, the commitment of individual geophysicists to university research and mentoring of students is higher than ever. We are most grateful to our friends and colleagues in industry who serve on thesis committees, deliver classroom instruction, provide software training and support, and arrange for field trips to land crews and marine acquisition vessels. We are also deeply indebted to the many service companies who have donated licenses of their software. We appreciate their commitment E through these difficult times! L
For more information about the AGL or to correspond to any of the authors, visit their site at www.agl.uh.edu.

SEPTEMBER 2000

THE LEADING EDGE

0000

Downloaded 30 Sep 2011 to 134.146.0.54. Redistribution subject to SEG license or copyright; see Terms of Use at http://segdl.org/

Dangerous trends?
Editors note: The following letter from one of SEGs most distinguished members is deliberately provocative and obviously designed to stir debate on a most serious subject. The TLE Editorial Board and staff encourage responses on this matter which undoubtedly is of great importance to the future of the profession.

An invited response
Frank Levin has presented the TLE readership with two provocative questions which we at the Allied Geophysical Laboratory are happy to address early on. Support for internal research in the oil companies has withered. The oil companies do indeed still value research and feel the service companies and academia should pursue it vigorouslythey just don't want to pay for it. The future for researchers who wish to remain within oil companies is not rosy. The future for geophysical research outside the oil companies will also be difficult for the next 10 years until what we see as the current mix of oil acquisition strategies plays out. In the past as now, an oil company can increase its reserves in four ways: (1) development of new technology (researchers), (2) clever application of existing technology (practicing geologists, geophysicists, and engineers), (3) acquisition of more favorable oil production terms (negotiators), or (4) acquisition of companies with existing production (lawyers and accountants). The world has changed in the past 20 years, and the International Monetary Fund and other agencies as well as simple market forces have pressured the developing countries to open up their acreage to exploration by multinational oil companies. Each company has its own mix of these strategies, but in general, since the oil companies hire the same business consultants, they behave as a pack. The strategy of the majors in 1970-80s was to develop leading-edge technology3-D seismic, horizontal drilling, pore pressure prediction, sequence stratigraphy, multiphase reservoir flow simulators, and prestack seismic depth imaging to name a few. The strategy of the independents in 197080s and everyone in the 1990s was through the better application or integration of technology. This latter strategy is best aligned with an experienced (i.e., aging) oil industry work force. The current strategy, in place for the past several years, has been to focus this experienced workforce, armed with modern technology on new exploration areasCentral Asia, offshore Brazil, Trinidad, and West Africa. A further competitive advantage was obtained by increasing the size of the company to take on projects that required extremely large capital investments in deepwater drilling or transcontinental pipelines. This latter strategy had the pleasant side effect of taking out most of the smaller competitors and reducing employee expense. Clearly, the fourth strategy will run its coursethe world gets by just fine with 10 or so automobile companies, so the consumer will be quite happy with 10 or so oil companies. The opening up of international markets and exploration opportunities will continue for the foreseeable future. However, the negotiators in these countries will learn from their predecessors. And as the universities continue to educate the international community, developing countries will be able to set up first-class technical organizations of their own along the lines of Saudi Aramco and Pdvsa/Intevep. More interestingly, these formerly developing countries will become competitors and operators in areas that were previously the exclusive playground of the majors. At the very least, developing countries will be every bit as savvy in using the services of reputable contractors as are the current international oil companies.
SEPTEMBER 2000 THE LEADING EDGE 979

Dear Editors: t of my professional Since I spent an appreciable par and women with advanced acad career attracting men that employed me, y emic degrees to the research compan recent trends in our Ive been much concerned by two employment of geoindustry. Both trends deal with the r schooling and those physicists, those just finishing thei phase my concerns with some years of experience. I will as two questions. or greatly reduced How do companies that have collapsed and those brought in through acquiresearch groups, their own into their operations? sitions, plan to fold new technologies t has told me that his comOne distinguished geophysicis of contractors. This cerpany will depend on the research wise plan. Unless there tainly is a possibility but hardly a pany, how can the company is expertise within the com of what is being offered evaluate the truth and usefulness that used by the United to it? The planned path parallels ers monitoring multiStates armed forces, where offic end on what is told million dollar projects have to dep s of the resulting unsatisfacthem. Newspaper account tly put, you have to tory equipment are frequent. Blun get your own hands dirty. risk alienating my In asking my second question, I less, the subject needs many academic friends. Nonethe many geophysicists? As a discussion. Are we educating too ed in my first quesresult of the consolidation mention SEGs 1999 Annual tion, too many geophysicists at ges that listed no employer Meeting in Houston wore bad ic positions are few, at all or said consultant. Academ be looking for employvery few. Candidates will mostly tracting, not expandment in industry, and industry is con nce majors, students ing. By choosing to become geoscie duation employment in a may be limiting their postgra ineering majors do not. way that physics and electrical eng Students in todays I dont claim that conclusion is fair. every bit as well educated geoscience departments are l engineering departas those from physics or electrica , but it is realistic. ments. The conclusion is not fair with geophysical exploration Companies not involved women with physics are likely to already have men and . That someone with a geoand engineering backgrounds t their needs cant be physical background might mee expected to be in their minds. ns. I hope that this I offer no answers to my questio er is at discussion. My own 50-year care letter will bring are involved or plan an end but concern for those who that fasc inat ed me to be inv olve d wit h the scie nce remains. FRANKLYN K. LEVIN Houston, Texas

0000

THE LEADING EDGE

SEPTEMBER 2000

Downloaded 30 Sep 2011 to 134.146.0.54. Redistribution subject to SEG license or copyright; see Terms of Use at http://segdl.org/

Within 10 years, 50% of the geophysicists in North America will retire. Moreover, they will retire in a somewhat angry, bitter mood, unlikely to bite on any retirement postponement packages that may come along. So 2010 will find the international oil companies faced with hiring a young, inexperienced workforce that is ill equipped to use the sophisticated data integration tools that we have developed over the past two decades. The oil companies will need new interpretation tools to aid this new generation of interpreters by capturing the expertise and know-how of their elders. The oil companies will need new hardware and processing tools to give them an edge over the ever stronger national oil companies overseas, but also right here in east Texas. In view of all of the above, our response to Levins question, Who will do the research? is this. To meet the upcoming challenges, oil companies will need to return to strategy number 1 aboveresearch. The computer industry will not come in, put their money at risk, and solve our problems for us. We predict that our industry will follow the pattern of the auto industry before us, whereby most research and professional employment is within megasupplier companies, and with the auto companies being involved in product design, marketing, financing, and sales. In this scenario, our research would be done in service companies, but we should recognize that the current service companies may be augmented by spin-offs and outsourcing of international oil company data analysis, interpretation as well as research activities. Multibillion-dollar independents with no history of research have not embraced research programs with their growth to major size. It appears that if research is not part of your corporate culture from the start, it is very difficult to put in place. Regarding Levins question, Will new geophysicist find jobs? here is what we think. Universities will continue to educate geophysicists, geologists, and engineers. Industry financial support for U.S. national MS students is almost nonexistent. PhD support through industry-supported consortia have shrunk dramatically. Many graduates will be employees of the national oil companies. These students are bright, hardworking, and have the enthusiastic support of their management to become technical experts. In 10 years, the international oil companies will face them as competitors. Although financial support is difficult to come by, the current job market for geophysics graduates with U.S. work permits is quite good. While providing these students with the training and internship experiences that will make them valuable to the oil industry, we educators also have a moral obligation to give them the skills to change their profession at some point in the future if they need or wish to do so. There are many areas a geophysicist can branch into with only a little extra training. Most geology graduates at the University of Houston take courses in GIS, and half of them find work in urban planning, construction, and other nonoilindustry related areas. Academics have made headway in the past decade in designing interdisciplinary courses with petroleum engineers and geologists. We now need to collaborate and design similar courses in urban planning, medical imaging, nondestructive testing, hazard detection, 3-D visualization, and pattern recognition. Levin was correct in recognizing the versatility of physicists and electrical engineers. We need to make sure our geophysicists are perceived E in the same positive manner. L KURT J. MARFURT Allied Geophysical Laboratory University of Houston
980 THE LEADING EDGE SEPTEMBER 2000 SEPTEMBER 2000 THE LEADING EDGE 0000

Downloaded 30 Sep 2011 to 134.146.0.54. Redistribution subject to SEG license or copyright; see Terms of Use at http://segdl.org/