Header Image

Life in the Industry
Risk Management in E&P

The peaking of world oil production presents the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Organizations must continuously devise strategies and re-structure them to make them compatible with changing time for timely mitigation of risks.


Risk management is of paramount importance for the fruitfulness of investments in the oil and gas industry where investment in one project alone can be in the billions of dollars, and take many years to complete. There is no guarantee of returns in any particular project as even after the rigorous drilling efforts the prospect may be devoid of hydrocarbons. For this purpose, adequate risk return evaluation in this sector is very important.

Most risks, except political risk, can be minimized by using an array of technological tools. Political risk is presumed to be beyond the control of the investor. However, for the Energy sector, political risk management plays an increasingly important role since the oil and gas production pattern worldwide is directly related to the geopolitical location of reserves. As shown below, major oil reserves are located in the regions of the world characterized by an unstable political environment.

  Middle East    65.7%
  Commonwealth of Independent States and Eastern Europe    5.9%
  Western Europe    1.6%
  Latin America    12.3%
  North America    3.9%
  Asia and Pacific    4.4%
  Africa    6.1%

(Source: Managing Political Risk in the Oil and Gas Industries; Oil, Gas &
Energy Law Intelligence; Volume 1 – Issue #02 March 2003)

If planning on investing internationally, it is important to consider the political risk represented by the host country. When evaluating a prospective investment in a foreign country, the investor must also evaluate and manage the potential political risk in addition to the geological and market risks. In other words, an oil company must be able not only to find hydrocarbons, it must also be able to develop and produce those hydrocarbons at a reasonable profit over time. An agreement signed with the host government is likely to last for several years, often outlasting the duration of the current government in power. The succeeding government may be less receptive towards foreign companies and adopt a more nationalist policy to preserve their national resources.
Another risk faced by the Oil & Gas industry is the growing focus on environmental issues. Major Energy companies are now establishing strategies for sustainable development to mitigate this risk and are aiming to develop their worldwide activities accordingly.

Further, the risks that are unique to this sector are ageing assets, lack of talented employees, unpredictable outcome of large investments, and operational risks such as ultra-deepwater development.

Risk management is fundamental to the success of a major project. However, there are lots of variations in risk management that are dependent on numerous factors such as the industry sector, the size of the project, and the stage in the project life cycle. One of the major factors that contribute to the success of risk control is the use of risk response techniques. The exact risk return ratio calculation for the oil & gas sector is not possible but it could be minimized or managed to some extent.

No amount of planning or management will make a project immune to risks but at times, it could make all the difference between the success and failure of a project.

- The Global Energy Talent Editorial Team

 
Spousal Guide: Surat & Kosamba

A guide for trailing spouses of professionals who are moving to take up a job at Kosamba in India. This guide provides an overview of amenities and fast facts about this area.

Introduction

In a dual-career household, there are often difficult and life-altering choices to make.  When one of the partners takes on the role of a ‘trailing spouse’, the acceptance of the role and the transition to a new environment is hardly smooth. 

This guide is targeted to the ‘trailing spouse’ of the primary wage earner of the household taking up an employment opportunity in Kosamba, to assist in relocating to the new location. 

In February 2008, ONGC (Oil and Natural Gas Corporation Ltd.) announced the discovery of four sources of crude oil and natural gas and had notified the director general of hydrocarbons about them. Three of the discoveries are onshore. The company made the onshore discoveries in the wells Kosamba-41 and Chaklasi-8 — both in the western region — and Mekrang-7, which is in Assam. The offshore discovery has been made in the Arabian Sea.

Kosamba profile

Kosamba is a census town in Surat district in the Western Indian state of Gujarat. Kosamba, also known as Kosamba Junction, has a population of 33,221 (as per 2006 census).  This small industrial town is well connected with other cities through road as well as railway and thousands of people from all over the country come here to work.

Kosamba Junction Railway Station is served by the Western Railways. Gujarat Express, Mumbai-Porbandar Saurashtra Express, Gujarat Queen Express, Lok Shakti Express, Valsad-Vadodara Express and Sayaji Nagari Express pass through this station. Ankleshwar Junction Railway Station, the next main station, is to the north of Kosamba. To its south Surat Railway Station is the nearest main station. Also, Surat airport is the nearest airport which is located about 67.1 kilometers away from the town.

Of the three cities (Surat, Ankleshwar and Bharuch) located near Kosamba, Surat is the closest major city. The distance between Surat and Kosamba is about 60 kilometers.

Surat Overview

Surat is one of the prime and fastest growing cities in Gujarat, India. This second largest city of the state continues to attract people all over the nation to come in for trade or jobs. Highly reputed for its diamond and textiles businesses, Surat is popularly known as ‘Diamond City’ and ‘Silk City’ across the nation. In addition to this, the city is also marked as one of the few leading petrochemical and natural gas hubs on the maps of India. Some of the big oil and natural gas exploration companies like Reliance, Shell, ESSAR, and ONGC have set up their units in and around the city. The city, though known for trade and business, also attracts tourists in large numbers. The city’s tourism facet boasts of some of the beautiful beaches and places of national significance.

Fast facts

Population:  28,76,374 (as per 2001 census)
 
Area:  326.515 sq. km.

Density:  8812 persons/sq. km.

Female to male ratio:  764/1000

Literacy Rate:  82.91%

Main languages spoken:  Gujarati, Hindi, and English

History

The history of Surat can be traced back to centuries; however, it got noticed in the world as an important trade center following the 15th century. The city became an important Mughal port during the reign of the great emperor Akbar in 1573. Following the Arabian traders, the influx of foreign traders in Surat rose to include the British, the Dutch and the French during and after 16th century. Surat was one of the most important trade center and link between countries due to its strategic location on the banks of river Tapi. It also served as a major port till 18th century as it enjoyed 6 kilometer long coast line along the Arabian Sea. The prosperity of the city was at its peak until Bombay emerged as a new port during the British rule in 19th century. It is after 1947 that textile industry flourished in Surat and other industrial activities also began. Today, Surat is a major textile center, heart of the world’s diamond polishing industry, and a fastest growing business city of Gujarat.

Weather

Surat’s weather is pleasant all round the year, moderate and reasonably comfortable. This is because of its proximity to the Arabian Sea. Summers are relatively hot as temperature plays between the range of 35 and 45 degrees centigrade. Winters are tolerable as the mercury level does not fall below 10 degrees (in peak winter months) except in rare cases. Monsoons in Surat are quite pleasant.

Health and safety – Medical Services

Surat, with ever-growing population, has developed a sound health care system for its people to help them with best medical facilities. It has excellent hospitals and nursing homes to provide all kinds of medical aids to the people. The city has several specialty and super specialty hospitals with latest tools and technology. State of the art operation theaters, ambulances and emergency services, well stocked blood banks and pharmacies, and excellent infrastructure - it has it all for its people. A very reputed chain of super specialty hospitals – Wockhart Hospitals have set up excellent heart hospital – The Seventh Day Adventist Hospital to treat complicated cardiac problems. Civil Hospital is also one of the most reputed hospitals in Surat for treatment of most ailments. 

Here’s the list of some other excellent hospitals in Surat
•    K P Sanghvi Hospital
•    Esis Hospital
•    The New Civil Hospital
•    Mahadev Orthopaedic Hospital
•    Mahavir Cardiac Hospital
•    Maskati Hospital
•    Jivani Ortho Hospital
•    Mahavir General Hospital
•    Cancer Hospital
•    Gabani Kidney Hospital
•    Navin Orthopaedic Hospital
•    Lokhat Hospital
•    Pandesara Health Center

And there are many more. Besides this, 24 hours helpline services and 24x7 chemists and blood banks are also available in Surat.
For those who seek Ayurvedic health care, there are many institutions providing medical services based on Ayurvedic principles. Nisarg Ayurveda Health Care, Surat Ayurvedic Hospital, Ayurvedic Hospital are some of them.

Businesses

Surat is known for its diamond cutting, polishing, and processing business that has blossomed over a period of time. So much so that it is known as the ‘diamond city’ of India. Textile manufacturing (weaving, spinning, dyeing, etc) is another prime business of the people of Surat or Suratis as they are known. Surat occupies a major share of India’s exports of diamonds and textile products. Apart from these, there are several small-scale, home-based manufacturing units for gold thread, jari work, and printing. Some other related businesses for which the city is well-known include production of synthetic and man-made fabrics, sarees, embroidery work, brocades, and the like.

Adding on to the businesses in Surat, there are big names operating on a very large scale. Reliance Petrochemicals, Essar Steel, Shell, ONGC, KRIBHCO, Larsen and Toubro, and Torrent Power are some of them. These companies have set up their oil and natural gas exploration activities in large industrial estates located in and around the city, especially in Hazira.

Travel: Getting around, Sightseeing, Excursions

Spending leisure time is not a problem for people living in Surat. There are number of places in and around Surat to spend holidays with family and friends. It has with it some very good beaches, historical places, and places of national significance.

Old fort (built in 14th century by Mohammad Tughluk); the English, Dutch, and Armenian cemeteries; ancient Dutch gardens; and the original port are places of heritage importance. There is also a city museum named Sardar Patel Museum, which was originally called Winchester Museum. It exhibits the collection of more than 10,000 pieces of arts and crafts work.

Looking around the city, there are several beautiful beaches to relax and enjoy on the holidays. Some of these beaches have also been developed as good health resorts. Dumas, which is just 16 kms away from Surat is famous for its beach resort on the Arabian Sea. Hajira is also a pleasant beach situated at a distance of 28 kms from Surat. Ubharat and Tithal are other restful, sandy beaches around Surat and are known for their shady palm groves and palm-sheltered cottages. Ubharat is 42 kms and Tithal is 108 kms from Surat.

Vansda National Park in Bulsar district and Saputara hill station in Dang district are good picnic spots near Surat. Animals like leopards, tigers, panthers, and wild boars can be seen in the national park. While, Saputara hill station is a famous hill resort in Gujarat. People have it all to enjoy - boating at the lake, ropeway ride to oversee the beauty of the hills, theaters, museum, parks, etc.

There are certain other places of national and historical importance like Dandi and Bardoli near Surat.  Both of these places are known in Indian history for Mahatma Gandhi’s ‘satyagraha’ (movements) – Dandi for ‘Dandi March Salt Satyagraha’ and Bardoli for ‘farmers’ Bardoli Satyagraha’.   Coastline of Dandi and Swaraj Ashram at Bardoli attracts many tourists for these reasons.

Those of you who love thrilling rides and water parks can have a great time at various amusement parks that are located a few kilometers away. Aquacity, Joy n Joy, and BJS World are such places that interest most people.

Transport

Surat has a well developed infrastructure to facilitate rail, road and air transportation within and outside Gujarat. The city is a major railway junction on Western Railway’s network and is connected to all parts of the country.  Surat is the mid-point between Ahmedabad (230 kms to its north) and Mumbai (256 kms to its south). It is also a major junction on Mumbai-Delhi-Ahmedabad broad gauge line. Besides this, there are number of trains running to and from Surat that links the city with most major cities in India.

A well developed network of roads connects Surat to major cities in Gujarat, Maharashtra, Madhya Pradesh, Delhi, and Rajasthan.  The National Highway No. 8 passes through Surat, which connects Surat to most parts of Gujarat and the major trade center of India – Mumbai. Surat is 267 kms from Ahmedabad, 140 kms from Baroda, and 326 kms from Mumbai. There is a large frequency of buses, including state buses and private buses, operating from Surat to take passengers to their destinations.

Surat is now also connected by air as the Surat Airport has been set operational in mid 2007. As of April 2008, it provides for limited flights to limited destinations like Delhi, Jaipur and Kandla. Indian Arilines and Kingfisher Airlines are the two carriers that are currently available at the airport.  Operating on restricted domestic level at this stage, the airport will soon be ready to handle more domestic and international flights.

Accommodations and Real Estate

Surat is the ninth largest city of India and is one of the fastest growing cities in terms of economy and population. People, depending upon their individual needs and budget, choose to own or rent a suitable home (flat/apartment or bunglow). There are number of options available like buying own home, renting a home, and paying guest (PG) accommodation.

Ghod Dod Road is a high-end area in Surat and naturally the house prices and rentals are higher compared to other localities. Athwa Lines, Vesu, Piplod, Bhatar, and Adajan are some of the other up-market localities in Surat where property prices may be higher than other localities. Suburbs are much economical when it comes to real estate among other things. Mota Varacchha, Bamroli, Amroli, Khajod, Sachin, Palsana, and Puna Kumbharia are suburbs of Surat. Increasing number of real estate developers are now developing these areas for residential as well as commercial purposes for various reasons. Limited land availability in developed areas and cost factor may be the two prime factors.

Compared to the western part of the city, the house prices are quite lower in these developing areas. Rent for 2 BHK flat may range between 3,000 and 5,000 rupees in these areas, while the rent for similar house may reach 10,000 rupees in posh areas. Similar drastic differences can be seen in the house prices as well. Though low price/rent is the biggest advantage to stay in suburbs, the only downside to it is inadequate civic amenities at this stage. But, it is believed that government is all set to develop and provide well-equipped civic amenities once these low-profile areas are merged in the city’s municipal corporation.

In a nutshell, real estate market is growing real fast and finding accommodation is not a big issue in Surat.

Leisure

Surat is a city with high spirits. People enjoy their social life in their best possible way. They hang out with friends and family, shop around, and celebrate various festivals zealously. Chowpati is one of the most popular hang-out destinations for people in Surat. Its garden and series of fast-food joints are the biggest attraction. In fact, the city is known for its tasty, finger-licking foods, especially the ‘Surti Oondhiyu’. Apart from foods and restaurants, there are several malls and multiplexes to spend leisure time. ‘Big Bazaar’, ‘Vishal Mega Mart’, ‘City Mall’, ‘House Full’ and many more stand in the city to have people enjoy their time. Some of the famous theaters and multiplexes in the city include ‘Fame’, ‘Adlabs’, ‘Valentine’ and ‘Cimace’.

Education

The major question that worries any immigrant is the education of children. Literacy rate is laudably high (about 83%) in Surat as compared to the national average, which is approximately 65%. Surat has a well developed educational infrastructure including various schools and colleges spread across the city. Not just that, Surat is also reputed for its excellent quality of education.

School level education in Surat is mainly governed by the Gujarat State Education Board. But, there are schools like Kendriya Vidyalaya, Delhi Public School, and Seventh Day Adventist School that are affiliated to national education boards like CBSE and ICSE Board. Though common medium of instruction in many schools is Gujarati, there are several English medium schools and some Hindi, Marathi and Urdu medium schools too.

Coming to higher education, students have enough choices in terms of colleges and faculty they want to specialize in. The city is the home to the Veer Narmad South Gujarat (VNSG) University, which governs its affiliated colleges in and around Surat. Most of the colleges in Surat are affiliated to the VNSG University and many of them are located in the Athwa Lines area. These include some of the city’s best medical and engineering colleges. One of the engineering colleges in Surat – Sarvajanik College of Engineering and technology, is the only college across the nation that offers engineering degree in textiles.

The university offers variety of under-graduate and post-graduate programs including degree, diploma, and M.Phil/Ph.D programs. It offers such  programs in myriad of fields like arts, commerce, science, engineering, medical sciences, education, law, computer and information technology, social sciences, journalism, human resource development, business administration and management, computer application, economics, mathematics, electronics, labor welfare, sociology, statistics, library science, et al. There are certain non-traditional post graduate programs run at the University campus for public administration, rural studies, comparative literature, and aquatic biology. Today there are over 70 colleges affiliated to VNSG University. The university provides its students with well equipped library, computer center, health center, and hostel facilities among other things.

Infrastructure and Technology

Surat is a developed city with fast growth. Despite of constant population rise every year, it has got recognition as second cleanest city in India. The credit goes to the sincere efforts of the municipal corporation in development of city’s infrastructure. Transport system, drainage/sewage system, electricity availability and information and communications technology are well developed in the city.

Among local transport services, common mode of transport includes city buses, auto rickshaws and private vehicles. The government has several plans to modernize the transport system to avoid massive traffic problems on account of population explosion, rapid industrial growth, and increasing private vehicles in the city. An efficient mass transportation system that can be operated on Public-Private Partnership (PPP) basis is proposed to be implemented in near future. Bus Rapid Transport System (BRTS) is going to be the next big step in public transport, which will be speedy, safe and economical. There are several other plans like constructing flyovers that the city shall see being implemented in years to come.

Electricity and telecommunication infrastructure is also flawless. There are hardly any unreasonable power cuts in the city. People also get uninterrupted connectivity – be it landline phones or mobile phones or internet. 

Funds flow in the city through tremendous growth in its diamond and textile industries. These two industries are the key revenue generators for the city as they contribute significantly in production and export of diamonds and textiles. It holds around 65-70% share in national diamond cutting and polishing while it accounts for nearly 40% of total diamond export. On the textiles forefront, the city produces about 40% of the nation’s synthetic fabric production and contributes 12% to the total exports. Next in the line of revenue generation, after manufacturing sector, are sectors like trade and commerce, services, and construction.

With thousands of power looms equipped textile units and diamond polishing units, these industries employ highest number of people in the city. In terms of earnings opportunity, Surat is rated quite high in the country. Therefore, the city experiences an increase in the urban population due to continuous rise in the number of migrants. Interestingly, migrants cover a major portion of Surat’s total population.

The major reason behind this is that job opportunities are growing, so much so that there are very few cases of unemployment in the city. The other reason is its per capita income, which is much higher than many other cities and average income level that rests higher than standard poverty levels. Add to it the annual GDP growth rate of the city that touched 11% mark this year.

Conclusion

Living in Surat is a great proposition for employees who work for industries located in an around Surat, such as in Kosamba.  Trailing spouses also need not fret much as the standard of living in Surat is high and the facilities are comparable with what is offered in other urban cities in India.

Useful Telephone Numbers

STD Code:                                  0261

Telephone local assistance:           199   

Police Control Room:                    100

Head Office Fire Station:               2439296

Railway Inquiry:                           131

Railway Ticket Confirmation:          135

Bus Inquiry:                                7422006

New Civil Hospital:                       3664456/59

Old Civil Hospital:                         3479175/7429532/7429943

Blood Bank (Civil Hospital):            3664456/59

Surat Raktadan Kendra:              2424594/2417754 (24 hours blood bank)

Ambulance Services (SMC):      2414139 /95 /96

Ambulance (civil Hospital):        2244456

Surat Municipal Corporation:      2423751-56

Surat Electricity Company:          2423399 (general), 1912 (for complaint)   

Indian Gas:                                  2684451

Gujarat Paravas Nigam Ltd.:       3476586 (for tourist information)

Consumer Redressal Forum:       3475425

24 hours Chemists-

Get - Well Chemist:                     2430888

Ashaktashram Medical Stores:     2421567, 2430275

Lokhat Mulla Hosp. Medical:      2422081
 
- The Global Energy Talent Editorial Team

 
It’s Safety First

The need for recovering oil and gas from deep-water wells will continue to grow globally with time. And the inclination towards lowering costs and increasing profitability in oilfields translates into a fact that there will be a greater need to find new ways of improving employee competence in health and safety aspect.

The Energy sector is expanding rapidly, what with the increase in global demand for recovering hydrocarbons from deep-water wells.  Along with the expansion of this sector, the challenges to developing and maintaining a safe and secure environment are also gaining prominence. Add to it the need to lower costs and increase profitability in oilfields, which will require the Energy sector to ramp up their employee health and safety practices. As the industry heads into a severe talent crunch, oil and gas firms are increasingly focusing on including worker safety awareness, safety meetings, job safety analysis, and task-specific training in their HR package. Firms now are making a conscious shift from ‘safety first’ to ‘safe production is our only standard’.

A key component of a firm’s safety program is the Job Safety Analysis (JSA), also known as a Job Hazard Analysis (JHA). JSA is a technique that helps firms outline the various processes involved in a job, the risks associated with each process and the means to minimize the risks. This technique can make a big difference in reducing accidents, injuries, illnesses, and the associated costs. It focuses on involving every member of the team in the development of safety measures and thus increases awareness within an organization. 

The spiraling demand for hydrocarbons has led to the adoption of new technologies that facilitate exploration of resources, hitherto considered inaccessible.  But with new technologies come newer hazards and requirements for innovative safety measures.  A majority of safety concerns can be countered by including extensive communication of hazards and safety measures within an organization, greater accountability from each worker, and building safety into each and every process within an organization.  Another interesting model uses a simulation consisting of a virtual oil platform for users to learn about health and safety by experimenting in a completely safe and risk-free environment.  Participants can engage in individual or group activities where they would strategize in realistic hazardous scenarios such as blowouts and fires. 

Leading oil and gas firms such as Noble are already benefiting by deploying advanced technology tools to sensitize its workforce in battling hazards. It invested significantly in training its workforce and encouraging them to adopt newer technology. However, this investment was well-rewarded as its total recordable injury rate fell by 60 percent.

For long, the industry has battled a perception issue with people looking at it as a health hazard.  The unfriendly perception of the energy sector may still take some correcting but it’s clearly come a long way from the decade of the 80s. Today, industry associations, government bodies, and employers are collectively spearheading a revolution of sorts. Add to it the fact that this sector needs a huge influx of talent to handle rising demand of oil and gas supplies. With almost 40 percent of the existing workforce expected to retire in the next five years, it’s time for industry professionals to act- and to ensure perceived safety concerns are not a barrier to recruitment and retention. We, as an industry, should do more to publicize our improving record for safety.

- The Global Energy Talent Editorial Team

 
Oil & Gas Careers: Things to consider

Do not make your career decision based on the commodity market. Before you decide to join the petroleum industry, here are a few things to consider.

Recently, a leading daily has suggested in one of its article that “This is a great time to look for a job in the oil industry.” The report is largely based the oil prices and an aging industry workforce – something we have been following & acting upon for some time. With the rise in oil prices over the last two years (and notwithstanding the recent gyrations the past few weeks), there is increased enrollment in petroleum engineering and geology programs worldwide.

However, it is advisable not to make one’s career decision based on the commodity market. Before you decide to join the petroleum industry, here are a few things to consider.

Basic Aptitude
Strengths in science and mathematics are the backbone of petroleum engineering and geology careers. You will be doing a fair bit of analysis & modeling in your future roles. If you don’t have the the aptitude in the basic physical sciences you may want to consider other options.

Global Mobility
This industry is one of the most global in nature. Hydrocarbons are found in more than 80 countries, but its likely that in the next two decades extractable oil may be developed in more inhospitable climes. You can look forward to a fair bit of travelling in the Exploration & Production aspect of this sector, particularly if you join a oil services organization. This may strike a chord with you if you’re adventurous in nature, If frequent traveling is not your cup of tea you may want to evaluate other aspects of this sector; particularly in refining or marketing of hydrocarbons.

Cyclicality
The 90s saw a decline in prices which depressed the number and types of jobs in the sector. The past few years on the other hand has been characterized by a steep price rise as well as volatility. During boom times it does seem that the tipping point is far away, however know that Oil & Gas, much like other commodities, is a fairly cyclical industry. A future slowdown in the industry will effect the job market too. However the skills that you will pick up in this industry, including the managing complex engineering projects, data intensive modeling or opening new markets for hydrocarbons will stand you in good stead in other industries.

In summary, the industry is growing and is exciting. However you may want to take a longer term view as you plan on venturing into this field

- The Global Energy Talent Editorial Team

 


Global Energy Talent Logo
Home
About Us
Recruitment
Training
Consultancy