THE ROLL N` BARREL Nº14 - Feb. 2015

February 2015
IFP School - SPE Student Chapter
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Nº14 - Feb. 2015
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Hydrocarbon prices updated 24 February 2015 (Source: Bloomberg)
Interview with Matthias Meister
By Arthur Papouin & Pierrick Casanova
SPE Regional Director
for South, Central and
Development Manager for logging - while drilling and wireline
tools at Baker Hughes’
Center in Germany.
1982: Graduated in Mechanical Engineering from the University of Hannover.
1982-1986: Worked for Christensen
Diamond Products Celle in Germany as a
mechanical engineer on down hole tools
and as a project engineer and manager.
1986-1999: Worked for Christensen
Diamond Products (which later became
Hughes Christensen) in Germany and the
USA as a drill bit design engineer and as a
manufacturing engineer.
1999: Active board member of the German
section of the SPE.
1999-Now: Worked for Baker Hughes in
Celle, Germany as a project manager
initially for formation pressure testing while
drilling and sampling while drilling, later as
a senior product development manager for
other logging tools for the drilling process
and also for wireline tools.
October 2014: SPE Regional Director for
South, Central and East Europe.
Why did you join E&P?
It happened by accident. After finishing my
Mechanical Engineering degree I did an
interview tour through Southern Germany
to find a job. Once back from my tour, I
looked in the local newspaper and found a
job ad for Christensen Diamond Products.
I applied for it by sending my resume and
I was surprisingly successful. I joined a
small group which had money to develop
new products. The interesting part was to
search for solutions at the cutting-edge of
technology. This field is difficult but totally
challenging and this is what drives me.
What does your current job consist
My current job consists of being the
product development manager for multiple
While Drilling Tools. It includes formation
testingand sampling while drilling, as well
as some resistivity, magnetic resonance
nad seismic while drilling technologies.
These are part of the projects I am
overlooking and I’m just changing my
position a little due to the work I also do for
SPE. My supervisor has now changed me
to a technical advisor which gives me a
little more time to spend on the SPE.
Why are you investing yourself in
the SPE?
I became a member of the SPE and I was
inactive back then. All I did was read
papers and learn. When I came back from
Houston, in 1999, I took over the treasurer
function of the SPE section in Germany.
They asked me to do it and I thought “Why
not?” And the reason why I did it was due
to the fact that I had to go to each lecture
to collect the money for the dinner. I have
never regretted doing it because I learned
so much from each lecture even if it was
not my topic. And it is for that reason I can
only encourage people joining the SPE to
learn and expand on their expertise, know
where technology is at and where it is
heading, learn in broader depth what the
industry is about and start networking. I
have been on the board of the German
section since then. I have also been the
membership chairman, program chairman
and section chairman. We have had an
active team. It was so much fun to
organize things and the networking was
just amazing. After all this I finally got
asked the question: “Would you be
interested to take over the regional
director position in the SPE?”. The more
you do in the long run the more rewarding
it will be for you. This is why I encourage
all students to join as early as possible.
From my perpsective today, I did it too
late. The second point is, be active in it.
The SPE allows you to do a lot.
What does SPE Regional Director for
South, Central and East Europe
consist of?
On one part I am now responsible for
overseeing these different sections. We
have 13 sections and 23 to 25 Student
Chapters. They are increasing all the time.
We are currently talking about creating
another one in Paris at “Ecole Centrale”.
The other part is learning about what the
students are doing because I want to
spread that information in the regions and
to the board in order to have a lively SPE
organization. This is what SPE is all about:
conferencing, networking and technology
dissemination. Of course, the SPE is
helping members to be able to do all that.
The final part is to define the general
strategy for the SPE during the board of
directors meeting. There are 28 board
members composed of Regional Directors,
Technical Directors for Technology and the
three Presidents. We try to form the SPE,
to give guidance: where do we want to be
heading in the next few years How can we
further increase membership? How do we
keep high quality SPE papers? We want
our OnePetro Database to be superior and
very well accepted in the industry, which
today it is.
How do you manage your time
between this position and your job?
That’s not easy, because whatever responsibilities you take in the SPE, it puts some
weight on your shoulders. Very early on
my career I didn’t look at the clock to tell
me when to go home. I had the luxury that
my way from company to home was short
so I could spend a lot of time in the company. The same happens today and of course
you have to spend some weekends in it as
well. This is another thing where I have to
encourage you guys. When you will be
married later on, you will get into conflict
with your spouse and they will ask ” Do you
need to do that now or can we spend the
weekend together?” And sometimes you
have to say: “No, this is more important”.
But one of these days, there will be a social
event where you bring your spouse with
you. It is very important because then your
spouse will appreciate what you are doing.
They will get the feeling of what kind of
society you are working for and then they
figure out that it is like another family,
which it really is to me.
How is the current barrel price
affecting service companies like
Baker Hughes?
It affects Baker Hughes as well as the
other service companies.
operators will drill fewer wells, service
providers have to react to the reduction
in business. As you have seen already,
all companies unfortunately need to lay
off people and consequently are not
hiring students right now which is a pity. I
have already talked to the board of the
French section to try at least provide
internships for students as much as we
can. I know that the industry cuts down
on this as well but I want to emphasize
the fact that we need you guys. We need
to train you. We have a lot of people
leaving this industry in the next 5 to 10
years. So we need well trained students
and young professionals. I hope that
they have listened and that they will
provide you all the opportunities to get
internships, because it is very important
for the future of this industry.
Is starting a career in a service
company the best option in the
O&G industry?
I started in a service company and the
beauty for me was that I was able to do
very exciting things as developing tools
on the cutting edge of technology. This is
what kept me in the job. If you are in the
operator office you are not the developer. I am a mechanical engineer so of
course I like to develop things. My path
was in my opinion the best I could follow.
I did not want to design the 115th version
of a door lock for a car. In the oil field
service company I had to design totally
different tools and technologies for each
project dealing with completely new
challenges. I had to learn from scratch,
succeed and build something new. This
was very inspiring and self fulfilling. But I
also have to say, each development is a
team effort. It is never a one man show!
Does it close some doors?
It may look like it. Could I start in an
operator office today? Maybe after what
I have done with the SPE. Maybe this
reopens doors. But if you are in the tool
development and have fun with that
maybe you are initially not the person to
work for an operator company, who are
dealing with the overall picture of the oil
industry. But I do not see the disadvantages today because I had so much fun
working on the cutting edge of technology.
Interview with Matthias Meister, SPE
Regional Director
The Keystone Pipeline System
ARTICLE | Page 2
The future of fracking: Dry Gas?
ARTICLE | Page 3
The story of a great Monopoly
ARTICLE | Page 4
The Rollin’ Barrel team
Nicolas Sobecki (DEG)
Onyekachi Ugochukwu (RGE)
Marion Neyrat (DEG)
Pierrick Casanova (RGE)
Arthur Papouin (DEG)
Zubin Arora (PEM)
Jorge Cubelos (DEG)
Mia (The Language Hub)
How is the SPE helping young
professionals in seeking their first
You need to show off what you are doing.
This is why I am emphasizing on being
part of the SPE as early as possible and
being active. It is driving your resume. I
can tell you if I am looking at a resume
and I see that people were active beside
their study then there is a clear plus sign.
SPE cannot influence the industry in
helping individuals get jobs. The SPE
provides further professional training,
certification and networking opportunities. What you can do is be active and
that will open doors easier for you. Of
course SPE has an interest in petroleum
engineers getting jobs and this industry
needs people. But what we have right
now is a cycle. It is going up and down.
Unfortunately we are currently on the
down turn. I hope it will bottom out
quickly and the industry will hire experienced and fresh people again. I remember in my early days a similar but even
harsher situation in which we had cut the
company in half and three months after
we had let go the last people we rehired
them at a higher salary. My advice is
hang in. I have seen it so many times,
after every down time we get an up time
with lots of opportunities.
What advice would you give to IFP
Students to succeed in their
Firstly join the SPE as early as possible;
I did it too late. Secondly be active in the
society because in the end it will be
rewarding. It does not pay off the next
day, it pays off in the long run.
I The Rollin’ Barrel - Number 14 - February 2015
Where do we draw the line between the economical value of a project
and its environmental impact? The Keystone pipeline system serves as an
appropriate case study to answer this question
The Keystone Pipeline System
By Marion Neyrat & Onyekachi Ugochukwu
The Keystone Pipeline System is an oil pipeline system in
Canada and the United States, commissioned in 2010. It
runs from the Western Canadian Sedimentary Basin in
Alberta to refineries in Illinois and Texas, and also to the oil
tank farms and the oil pipeline distribution center in
Cushing, Oklahoma.
The project consists of three (3) phases which are in
operation, and the fourth is awaiting U.S. government
approval. They are:
‡Phase I (Completed in June 2010)
The Keystone Pipeline for delivering oil from Hardisty,
Alberta 3,456 kilometres to the junction at Steele City,
Nebraska and on to Wood River Refinery in Roxana, Illinois
and Patoka Oil Terminal Hub/tank farm north of Patoka,
‡Phase II (Completed in February 2011)
The Keystone-Cushing extension, running 480-kilometres
from Steele City to storage and distribution facilities/tank
farm at Cushing, Oklahoma.
‡Phase III (To be completed in mid-2015)
The terminal lateral pipeline running to refineries in
Houston, Texas is undergoing construction. The first part of
this phase, The Gulf Coast Extension, running 784 kilometers from Cushing to refineries at Port Arthur, Texas was
completed in January 2014.
‡Phase IV (Proposed Keystone XL Pipeline)
Planned to duplicate the Phase I pipeline between Hardisty,
Alberta, and Steele City, Nebraska, with a shorter route and
a larger-diameter pipe. It would run through Baker,
Montana, where American-produced light crude oil from the
Williston Basin (Bakken formation) of Montana and North
Dakota would be added to the Keystone's current throughput of synthetic crude oil and diluted bitumen from the oil
sands of Canada.
What environmental risks are associated with the
construction of the XL Keystone pipeline?
Different environmental groups, citizens, and politicians
have raised concerns about the potential negative impacts
of the Keystone XL project.
The main issue is the risk of oil spills along the pipeline,
which would traverse highly sensitive terrain. The
opponents remind of the dozen of spills during the first year
of exploitation of the initial pipeline, Keystone, which
corresponded to 80 000 liters of oil discharged in the north
of Dakota. This was recognized and led Barack Obama to
rejecting the building permit in 2013 and asking for a study
on the ecological impact.
Another argument is in regards to the increase of 17%
higher greenhouse gas emissions from the extraction of oil
sands compared to the extraction of conventional oil.
Indeed the extraction of the tar sands needs more energy
and more water than traditional hydrocarbons.
What are the resulting economic spin-offs?
With the 830 000 barrels per day, the proponents for
Keystone XL pipeline argue that it would allow the US to
increase its energy security and reduce its dependence on
foreign oil, in particular from Venezuela and the Middle
Russ Girling, president and CEO of TransCanada, touted
the positive impact of the project by "putting 20,000 US
workers to work and spending $7 billion stimulating the US
economy". According to Barack Obama, it is far less and
above all, it is temporary. Even if the construction could
create jobs, it will not be a long-term situation and the
project could in the end create just a hundred permanent
What are the different protests related to this project?
On March 2, 2014, approximately 1000-1200 protesters
marched from Georgetown University to the White House
to stage a protest against the Keystone Pipeline. They are
concerned by the pollution of air, the possible water
contamination and the harm on wildlife in general. More
than ecologist American, many Native Americans and
Indigenous Canadians are opposed to the Keystone XL
project because of the potential disturbance, demolition or
removal of prehistoric and historic archaeological sites.
What is happening at the moment?
At least right now, the United States do not need the oil.
Improved technology, chiefly hydraulic fracturing and
horizontal drilling, has opened up vast new deposits of not
only natural gas but crude oil too. And the drop in oil price
reinforces the reason to stop the project.
But even if Barack Obama has threatened to use his veto of
power, the Republicans in the Congress affixed their
signature on the contract on 13th February 2015, and they
are pushing the American president to follow. With years of
controversies, Barack Obama’s decision is consequently
commanding worldwide attention and Rolling Barrel’s will
follow the story very closely!
Phases I and II have the capacity to deliver up to 590,000
barrels per day of oil into the Mid-West refineries while the
Phase III has the capacity to deliver up to 700,000 barrels
per day to the Texas refineries.
In order to better comprehend the challenges facing the
Keystone XL project, the following questions must be
the case for shale
On 10th February, a group of French companies
have joined forces to change perceptions of the
shale energy sector in the face of the country’s
long-standing ban on hydraulic fracking despite
France having to import nearly all its oil and gas.
France is estimated by the U.S. Energy Information Administration to hold the biggest reserves
of shale gas in Western Europe. A new
Paris-based think-tank, the Centre for
Unconventional Hydrocarbons, has as an
objective to inform the public about experiences
outside France and also to show the experience
of Total and pipe maker Vallourec from the U.S.
shale gas revolution.
Source: Rigzone
10 February 2015
‹Ž ƒŒ‘”• ˆƒ‹Ž –‘ Ƥ† ”‡•‡”˜‡• –‘
counter falling out
Last year, big oil companies had a poor record
of finding and producing oil and gas and big cuts
in spending in response to falling crude prices
could undermine their failure. On average, the
biggest oil companies replaced only two-thirds
of the hydrocarbons they extracted in 2014 with
new reserves. Also, their production decreased
by 3.25%. With the latest oil price collapse, the
biggest oil firms have announced sharp cuts in
capital expenditures as far as 2017, as they
seek to preserve cash to maintain dividends.
Nevertheless, Shell CEO Ben van Buerden
recently announced “Many of the things that you
may do out of excessive prudence basically
means that you lose them (the opportunities).
They won’t come back anymore”. The new
challenge of the oil companies is to balance
cash flow and the growth of their companies.
Source: Rigzone
5 February 2015
Contact us for more information:
7 January 2015
[email protected]
Williams Partners announced with DCP
Midstream Partners, LP that the new extended
natural gas gathering pipeline system is now
flowing natural gas. The Keathley Canton
ConnectorTM deepwater gas gathering pipeline
system and the South Timbalier Blowk 283
junction platform are serving producers in the
central ultra-deepwater Gulf of Mexico. The
20-inch, 209 mile Keathley Canyon Connector,
which is capable of gathering more than 400
million cubic feet per day (MMcf/d) of natural
gas, originates in the southeast portion of the
Keathley Canyon protraction area and
terminates into Discovery’s 30-inch diameter
mainline at Discovery’s new junction platform.
The pipeline was constructed in depths of up to
7,200 feet of water approximately 300 miles
south-southwest of New Orleans. With this
start-up, the joint venture discovery is now
ready to serve the growing production needs of
our deepwater producers. As partners in the
project, Williams and DPM are now positioned
to significantly benefit from its world class
deepwater gathering system. Moreover to this
offshore gathering system, this systems
includes the 600MMcf/d Larose natural gas
processing plant providing market outlets to six
interstate gas pipelines and the 35.000 BBL/d
Paradis fractionation facility.
Source: Your Oil and Gas News
10 February 2015
The Rollin’ Barrel - Number 14 - February 2015
š’Ž‘•‹‘ ‹ŽŽ• Š”‡‡ „‘ƒ”†
‡–”‘„”ƒ• ơ•Š‘”‡ ƒ–—”ƒŽ ƒ•
Platform In Brazil
The future of fracking:
Dry Fracking?
On 11th February at 12:50 a floating production
storage and offloading vessel (FPSO) suffered
an explosion when 74 workers were on board.
This FPSO vessel was operating on the
Camarupim and Camarupim Norte fields which
are situated 60 miles from the coast of Espirito
Santo state. Six workers died: five Brazilians
and an Indian. In addition, four others went
missing and ten were injured and flown to a
hospital based in Rio de Janeiro. The unit and
production has therefore been stopped. This
explosion does not seem to have had any real
financial impact on the state-controlled oil giant
Petrobras. The vessel operated 3% of Brazil’s
total gas production.
By Nicolas Sobecki
Millions of gallons of water could be saved at each fracking
well site. The solution is to use liquefied petroleum gas
(LPG) gel for hydraulic fracturing also called dry fracking.
A gel made of LPG and sand is injected directly into a
formation, under pressure and heat gel reverts to vapor and
crack the rock, instead of using water.
A solution to water waste
Hydraulic fracturing requires as much as 4 million gallons of
water per well.
The total water ones for fracking in the United States in
2010 was between 70 billion and 140 billion gallons,
according to the Environmental Protection Agency (EPA) .
The amount of water consumed in fracking a well typically
ranges from 0.6 to 1.8 gallons of water per million BTUs of
energy produced, according to the Energy Collective. (One
BTU: british thermal unit is approximately 1.054 to 1.060
The amount of water used for fracking is less than other
uses like residential use but it can not be tolerated in
agriculture areas where water is already scarce. This
problem is also getting worse, with the Texas Water
Development Board and the University of Texas’ Bureau of
Economic Geology estimating that this amount of water will
double in the next decade.
A new way to frack
Dry fracking was developed in Calgary, Alberta by Gasfrac
Energy Services a few years ago. They use propane,
butane, pentane or mixtures of those gases as a substitute
for water.
This technique has some advantages compared to water:
- There is no need for treating and transporting water
- Low viscosity and low surface tension, compared with the
surface tension of water.
- The vapor can be reused or sold because it contains no
salt and radioactivity.
- It can allow more gas to escape from shales.
But an obvious drawback of the LPG technology is that the
fluid used is more expensive.
Source: Forbes
11 February 2015
Actual utilisation of this technique
Dry fracking can be a good alternative in areas such as in
California where the agricultural community, vineyard
owners included, use a large amount of water. The
formation of the Monterey shale in California holds 15
billions of untapped oil according to the US Energy Department which is more than in North Dakota’s Bakken oil
But some institutions like the San Francisco-based Center
for Biological Diversity criticize this new technology
because of its lack of extensive scientific research into the
possible risks.
Nowadays about 2,100 fractured wells using this technique
are in the ground, with test wells under way in Texas.
Norway's Statoil plans to develop a giant $29
billion oil field. It will be the Europe's costliest
offshore energy project and they expect to
produce some of the world's cheapest oil that
will be profitable even after the recent price
crash. This field named Johan Sverdrup will
start by 2019 and the production expectations
are 3 billion barrels of oil equivalents (boe) over
50 years.
Once the project is running, operating costs are
projected under $5 per barrel. This field was
discovered in 2010 by Lundin Petroleum and
Statoil. Until the government’s decision, Statoil
will hold 40.0267 percent, Lundin 22.12 percent,
the state owned firm Petoro 17.84 percent, Det
norske 11.8933 and Denmark's Maersk 8.12
Source: Rigzone
Support our Student Chapter
13 February 2015
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sponsors. Please let us know if you are interested in supporting us.
A section of an Exxon Mobil corporation refinery
in Torance, California exploded on 18th
February and injured four people. The refinery is
about 20 miles south of downtown Los Angeles.
This refinery covers 750 acres, employs over a
thousand people and processes an average of
155,000 barrels of crude oil per day. It produces
1.8 billion gallons of gasoline per year, which
accounts for about 8.3 percent of the state's
total refining capacity. The other parts of the
facility continue to operate. It was not clear what
caused the explosion.
Source: Washington Post
18 February 2015
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The Rollin’ Barrel - Number 14 - February 2015
The story of a great monopoly
By Zubin Arora
Born in 1839, John D.
co-founder of the Standard
Oil Company, an iconic
company in American
enormous amounts of
wealth and power in the
late 19th century. The
single most important
figure in shaping the oil
industry, he embodied the
American dream - born of
humble beginnings and
rose to the wealthy elite.
something big, he started his first company several
months before his 20th birthday with his neighbor
Maurice Clark. They did business trading commodities like meat and produce. The firm prospered from
the demand generated by the Civil War and by the
opening of the West.
But in 1863 he saw a new business opportunity in
Pennsylvania. Due to the oil boom there was a new
demand for refined kerosene that could be used for
lamps and lubricants. Hence, in 1870 he founded
the Standard Oil Company of Ohio, which would
refine oil coming from Pennsylvania and sell
kerosene to a national market.
While the market for oil was growing at an extraordinary rate, the amount of oil seeking markets was
growing even more rapidly, resulting in wild price
fluctuations and frequent collapses. As overproduction caused prices to plummet, the new industry
went into a depression. Rockefeller wanted to
replace the cut-throat competition with co-operation.
His meaning of co-operation was consolidation
under his control that included vertical integration producing, transporting and refining. It would do
what an association could not: eliminate excess
capacity, suppress wild fluctuations of price, and
save the business.
One of the ways he set about doing this was making
the transportation aspects of that economy a
partner. The size, efficiency, and economics of scale
of Rockefeller’s organization enabled it to extract
rebates - discounts - on railway freight rates, which
lowered its transportation costs, providing it with a
potent advantage in terms of pricing and profit.
Standard, however, did not stop with rebates. It also
used its prowess to win “drawbacks.” A competing
shipper might pay a dollar a barrel to send his oil by
rail. The railroad would turn around and pay 25
cents of that dollar back, not to the shipper, but to
the shipper’s rival, Standard Oil! That, of course,
gave Standard an enormous financial advantage. It
aroused colossal public antipathy towards Standard
when it became known.
Overtime, he reduced the price of Kerosene by 80%.
When his competitors could not compete, his
strategy was to buy them out and further consolidate
his control over the refining business. By 1879, he
successfully assumed control over ninety percent of
the refining capacity in America. Standard also
controlled the pipelines and gathering system of the
Oil Regions and dominated transportation.
In the next decade he developed an even more
shrewd method of consolidating his control over the
oil industry through the The Standard Oil Trust. The
way in which this operated was that Standard Oil
would take company money and become the largest
shareholder of its competitors. Around the country
there were companies that were ostensibly competing with Standard Oil, but their largest shareholders
were actually Standard Oil executives. Standard Oil
was secretly running these companies and negating
their competition.
This strategy was both brilliant and devious. It made
Rockefeller the wealthiest man in America, it made
Standard Oil Company the wealthiest company in
America, and it also demonstrated the degree to
which Standard Oil and Rockefeller personally were
willing to do unethical things in order to win in the
market and to do business secretly and from beyond
the public eye.
The Oil&Gas Crossword
Standard Oil, as it got wealthier and wealthier, used
its leverage to destroy its competitors and essentially become the only game in town. That enormous
wealth also began spreading into politics. When
governments on the state and national level would
threaten Standard Oil’s interests, they mobilized an
army of lobbyists and would bribe politicians.. In
Pennsylvania they hired farmers to pretend to be in
favor of Standard Oil when they were lobbying for a
certain pipeline legislation. Standard Oil was really
willing to win by any means necessary. It was a
monopoly of the worst kind that leveraged its
enormous resources to create an uneven playing
field, destroying its competitors, and wielding an
enormous, inordinate influence over American
Despite being the wealthiest man in America,
Rockefeller practiced frugality. During a stressful
period in the 1890s, he developed alopecia, a
condition that causes the loss of body hair. By 1901,
he did not have a single hair on his body and he
started wearing wigs. After this many of his activities
became philanthropic. In total Rockefeller donated
about $550 million.
A ruthless businessmen with an acumen for
management and organization, Rockefeller is
ranked as the most hated American businessmen in part because he was successful and partly
because he was merciless. His lasting legacy is
continuously felt, in terms of his profound influence
on the petroleum industry and on capitalism itself.