Congress is finally set to lift the oil export ban, it’s NOT the end of fossil fuels, and Iran is the safest Middle East country to invest in (ha!).
Subscribe, Rate, & Review
#042: Goodbye Oil Export Ban!
Listen on YouTube
Saudi Arabia Spends Billions to Get Asia Hooked on Its Crude Oil
South China Sea To Get Chinese Oil Filling Station
Big leap anticipated for Iran’s petrochemical industry
Pelosi, White House Support Plan Allowing U.S. Crude Oil Exports
Louisiana, U.S. consumers could see dampened benefit from lifting oil export ban
Chevron’s CEO Sheds Some Light on How It Plans to Tackle a New Era of Oil
Dow, DuPont set $130b mega merger, could spark more deals
The End Of Fossil Fuels? Not So Fast, My Friend!
Restructuring Practices’ Staffs Have Grown Amid Oil Downturn
Houston Company Gives Every Employee $100,000 Christmas Bonus
The Weekly Onion
We have two spots open for 2016 supporting sponsors. Get your product or service in front of our heavily-niched and highly engaged oil and gas audience.
First Friday Q&A
January 1st is the first Friday of 2016 AND the first Friday of January, so you know what that means.
What problems are you fighting in the oilfield? Send us your questions and we’ll do our best to give you an answer and solution. Of course, you can write in. But, if you leave us a voicemail we’ll play it on the show 🙂
This Week in Oil & Gas On-Demand Radio LinkedIn Group
Join the LinkedIn Group
Get Mark’s Monthly Events Email
Connect with James and Mark
#042: Oil Export Ban Lifted! … Maybe?
Transcripts Courtesy Of
James: I’m James Hahn II.
Mark: And I’m Mark LaCour.
James: And you’re listening to This Week in Oil & Gas. This is the show for busy oil pros who want to quickly keep their finger on the pulse of the industry brought to you by Red Wing. I’m James Han II from triberocket.com, and before I give my tagline and all that stuff, why don’t you introduce yourself, Mr. LaCour?
Mark: Yeah, it’s Mark LaCour with modalpoint.com. We’re the oil and gas sales experts. But James, you and I talked about your business and we’ve actually figured out that there’s a more accurate tagline for you.
James: Yeah, so you taught me a lot about market research and everything like that, and I went out there and started saying I was doing sales-driven market research and you called me last week and said, “That’s not what you do”.
Mark: Not at all.
James: So what do I do?
Mark: You actually do sales research, right? So you’re actually right there at the frontlines with the sales professionals trying to help your clients figure out where’s their gap between what the sales professionals are saying and what the clients want to hear.
James: Yeah, that’s exactly right. We start with interviewing the executive team, the leadership team. We interview the sales team. We interview clients closed, lost people. Oh, those are full calls. Don’t you love those closed, lost calls, Mark?
Mark: Yes. It’s actually cool to you or I because the guy that’s on the other end of the phone doesn’t really care, but I would not want to be doing that loss call if I was the actually salesperson who lost that deal.
James: Well, I’m guessing you wouldn’t hear nearly as many F-bombs as I heard in some of those calls.
Mark: And the truth is we hear the truth because you do not work for the company that lost the sale versus if the company tried to do it itself. Especially if the client liked the salesperson, they’re not going to tell the truth, it would hurt his feelings.
James: Correct. So, we’re going to be redoing our website and we have a new tag line, it’s “Oil and Gas: Stories that Sell”
Mark: That is exactly what you do. It just took you, with little bit of help from me to figure out how to put those words to just makes sense.
James: Yeah, definitely, because when you use big — not even big but fluffy marketing terms like Brand Story Telling, it sounds a little ridiculous. So I definitely like the “Oil and Gas: Stories that Sell” and we have a lot of stories to talk about today. But before we do that, we have to give thanks to our amazing sponsor, Red Wing.
Mark: Yeah, folks. We know that our audience is predominantly oil and gas people, and you know Red Wing. In fact, if you look down at your feet, there’s probably a pair of Red Wings on your feet right now. But Red Wing is way more than that.
Guys out there on those pipelines, doing these expansions, doing these checks for leaks, and welding inspections, and all of that, if you’re on FR clothing, flame-resistance clothing, and it’s hot and it’s uncomfortable, check out Red Wing.
They got some very comfortable clothing that gives you that same level of protection but allows you to actually not sweat your butt off while you’re out there working. So check into Red Wing’s some flame-resistant clothing. They’re really great stuff.
James: One thing I really respect about a Red Wing, and as you just said, I’ve talked to a lot of sales team, is the point that they make a lot is that you’re not going to get the cheapest from us but you’re going to get the best. And I always appreciate a company that’s upfront about you get what you pay for.
Mark: Right. And it’s true. You do get what you pay for. Speaking of that, people pay close attention to the next couple of shows. We have some wonderful helicopter duffel bags that Red Wing has given to us to reach our audience. So we’re going to figure out how we would give those away in the next show or two. But stay tuned. I have one actually in person they shipped to me. It’s an awesome bag.
James: Cool. So let’s get into the stories though because we have quite a few to cover. Starting things off with Saudi Arabia is the Bloomberg Business. Saudi Arabia spends millions to get Asia hooked on its crude oil.
Mark: Yeah, this is a great thing. We’ve been talking about bits and pieces of this. It’s a very well-written story. Basically, Saudi Arabia is spending money to buy refineries in Asia-Pacific. And you go, “Well, why does it matter?” Well, guess what the refinery has to buy to make stuff?
Mark: Oil. And guess where they get that oil from.
James: Saudi Arabia. And this is something you’ve been talking about. You were saying Saudi Arabia is moving into the downstream market so they could they can refine their own oil and so they’re doing that.
Whenever you said that, I always had the impression that they were starting to build new refineries in their backyard, but they’re going — they’re outsourcing — not outsourcing it but finding existing plants and bringing them online.
Mark: So they’re doing both. In their backyards, which is Middle East, they are building refineries to start tapping to this global export business. What they’re doing in the Middle East is instead of trying to build that business from scratch, why don’t we buy or partner with existing refineries that already have a market, that already have the refinery built?
And as part of that negotiation for Saudi Arabia given that money, they lock in the contract that the oil has to come from Saudi Arabia. It’s actually very shrewd, very smart. It’s very long-term strategy.
And what they’re trying to do is build and buy an export business in Asia-Pacific. And the reason they’re trying to do it in Asia-Pacific is that’s going to be one of the fastest-growing markets to consume refined petrochemical products. Not just fuels, but petrochemicals for lasers and plastics. This is a shrewd move that you would expect from Saudi Arabia, and they’re doing a good job of this.
Now, they’ve run into a little bit of trouble in China because there are still some areas in China where the government controls the price of refined fuels, so gasoline, diesel, jet fuel. So it’s a little bit harder to come in, buy a refinery, require the refinery to buy the crude from Saudi Arabia, and then sell that refined gasoline or jet fuel diesel at a profit if the government sets that price. That’s the only place they’re struggling a bit and they’ll figure it out.
James: And they mentioned a few different countries in terms of South Korea, Vietnam. What are the specific countries that they’re really getting active in outside of China?
Mark: So when you look at Asia-Pacific, you have some very mature markets. Think Japan. So Japan’s growth is actually flat. Actually it’s been negative for the last about five or six years and it’s relatively flat. But if you look at like Vietnam, their economy is growing by double digits. Indonesia the same way and China the same way.
Even though China slowed down, it’s still double digit growth. So what Saudi Arabia is doing is trying to get in the markets that are growing rapidly. This way they can make the most money for the longest period of time. It’s marketing genius.
James: Saudi Aramco does a good job with most of the things they do.
James: They definitely do. All right. So peaking of China, South China Sea to get Chinese oil filling stations. What kind of filing stations are these?
Mark: So this is a negotiation tactic is what it really is. So if you read this article, which is actually a good article, China has been building for the last ten years man-made islands in the China Sea. Now, and you may have seen some of this in the news because we’ve had some military encounters, I will say, for those man-made islands.
What China is basically doing — have you sort of like, James, if you have a backyard and you had a fence and behind that fence was your neighbor’s property, right? Well, what would happen if every couple of years you move your fence back an inch or two?
James: Eventually you end up in court, right?
Mark: Yeah, so China is building these man-made islands and they go, “Oh, the new line of our territory is these man-made islands,” and then they’ll build some more man-made islands out and they go, “Oh, our new territory is this man-made island.”
James: Wait! Okay, so I’m going to stop you there. Man-made islands — so kind of like Dubai type islands?
Mark: Yeah, a little bit different. Dubai is a little bit shallower than the China Sea. So basically what they do, what Chinese government is doing is they’re finding reefs, some very stable reefs and then they’ll build walls around that reef and then they’ll pump it full of sand from the sea floor, and then you have an island. It’s not anything new. It’s not a new technology. People have been doing it for 50 years at least.
But if you look at what they’re really doing, what they’re doing is they’re building bases for their military because they want control of not only the traffic but all the oil and gas reserves in the South China Sea. So the US doesn’t like that at all. We’ve had some military encounters and we’ve done some reconnaissance flights over saying, “We see what you’re doing; stop it.”
So to try to make it more legit, this article is about how they’re going to build basically a big gas station for like the fishermen and all the commercial vessels in the China Sea so they can stop and get fuel in the middle of the sea instead of going to land. And then China is going to say, “We don’t have any military ambitions around this because we’re building a gas station.” So it’s really a negotiation tactic.
James: This is for fishermen, a.k.a. our fleets of military vessels?
Mark: Well, it’s not really for their fleets of military vessels. The fleet of military vessels has its own tinders, its own fuel tinders that travel with it that supply the fuel for the military vessels. And then a lot of modern big vessels are nuclear powered. They don’t need to be refueled except every 7 or 10 years.
James: All right, so our last story from around the globe, another hot button issue in terms of Iran, but we’re going there again anyway because it’s something we need to talk about because it’s a huge story — big leap anticipated for Iran’s petrochemical industry.
Mark: Yeah, this just feeds into everything you and I have been talking about in recent history. So Iran is trying to rebuild its economy, its infrastructure, and it’s sitting on some very recoverable, very high-quality reserves, but they can’t get it off the ground and move anywhere because basically there’s been ware there for so long that all infrastructure has been destroyed.
In order to build that infrastructure, they need foreign investment and this article is talking about how there’s foreign investment ready to start building the infrastructure to start refining goods and being able to export.
So, once again, here’s another country that’s sitting on oil and gas reserves that sees the export market is being profitable. And so they’re going to try to jump into it because they have good reserves sitting in their backyard.
James: I’m used to hearing things in terms of barrels of oil per day or Mcf, things like that. And the line here says, “He said the country’s petrochemical production will be boosted by 4.5 million tons in current calendar year.” Are petrochemicals measured in tons?
Mark: It depends on what their state is, whether solid or liquid. So, solid, things like Styrofoam, butyl, nylon is going to be, these will be petrochemicals measured in tons. Things that are liquid — methanol, ethylene, butanol — that sort of stuff that will be measured in gallons or liters.
James: In that case, is this a reflection of the type of petrochemical industry that exists in Iran or will be coming?
Mark: Yeah, you might think so. By the way, they phrase that answer. But let me just kind of feed you something else. If you read this whole article, it tells us a bit of a marketing spin to this and I love this. So their deputy managing director Mohammad Hassan Peyvandi said — here’s his quote: “Iran is the safest country for investment.”
Now, I don’t care how much you know about geopolitics. If you look at the Middle East right now, I do not think you would pick Iran as the one safest country for investment. So you can tell there’s a bit of marketing spin to this.
James: Well, and they going to get their money in their somehow. So, hats off to him for his blatant…
Mark: Put it out there.
James: Just putting it out there, baby.
Speaking of geopolitics, bringing it home to America, this is something we’ve been talking about, something we’ve been hoping will happen. And there have been some headlines in the past, but they’ve been about the House. So this is the first one I’m bringing on the show because it looks like it might be legit. Congress reaches fiscal agreement that ends US oil export ban.
Mark: Yeah, James. You know what? I really, really hope this goes through. I’ve spoken in the past about how our politicians here in the US don’t actually make concessions anymore. If you read this deal in detail, which I have, which is the actual deal is not, listen, this article, this article hits the highlights. It’s actually real good old fashioned US politics where both sides make concessions.
So basically, the Republican side of the house wants to lift the export crude ban, which is a great thing for everybody. And the Democrat side of the house wants to increase its subsidies for renewal fuels and solar. So I think it was a fair concession. I feel good about this. I think it’s going to pass.
One of the things that both sides are worried about is their constituents having gasoline prices, which our gasoline prices go up because of this. What they don’t understand is that’s not going to happen. If gasoline goes up, it goes up for its own market reasons. We import most of the crude that we use and turn to gasoline in the US. We struggle to export the crude that are produced here in the US and turn it into anything.
So by opening the export ban, what’s going to happen is our refineries in the world that can utilize the sweet crude that we produce will buy it, which will then shorten this glut on the market and you have prices up quicker. We will still import the heavy crude that our refineries like to use to turn it to gasoline. So let’s keep our fingers crossed on this one.
The thing I’m little bit worried about is the president and this is December 2015, so Barack Obama is still president. The president had said he’s going to veto this. I think that would be political suicide for the Democratic Party, he is up for reelection, if he vetoes this.
So a bunch of concessions made in this bill, neither side has a stronghold on the other side. This is a bill that was bipartisan, so both sides sponsored it. So I think it’s going to go through, and I really hope it’s going through.
James: One thing, and I don’t want to get too political, that is kind of the barrel of the gun that might have brought this negotiation. What seems to me brought this negotiation to a head is the fact that the government is going to shut down and they need money.
Mark: Yeah. If you paid attention to the news in the last couple of years, this happens every year because neither side can make into concessions to the point that they’ll do a long-term finance plan. I mean it’s the US government. Are you kidding me? It’s like paying your electricity bill. You know you have to pay it.
So why don’t you bipartisan come up with a bill where everything gets paid and take all the special matter interests out and worry about that later. But yeah, both sides of the House use that to try to help get this sped up, and hopefully it will go through.
James: What’s this Cadillac Tax I hear so much about?
Mark: Yeah. It has to do with the Obamacare which– I apologize for saying that because that’s not the politically correct term. I can’t remember.
James: Affordable Care Act.
Mark: Yeah, that’s what it is. So basically, the people at the high end of the Affordable Care Act have to pay a tax that the people at the lower end don’t. It’s called the Cadillac Tax.
So the Republican side of the House has said forever that’s not fair. I mean it’s just not. And they’re right. The Democrat side of the House says well, the people own the high end can afford to pay a little bit and help people in the low end. So it looks like that’s going to stay in there. I don’t like it, but it’s a concession. It’s a concession I’m willing to make to get the crude export ban lifted.
James: So as soon as we get this, in my mind, good news — I didn’t read too much. I just scanned it, but it seemed to be a bit of a pushback so I wanted to give a full spectrum of the views here. And this is specifically from the advocate, which is the Baton Rouge, New Orleans, Acadiana — no?
Mark: Acadiana? Yeah.
James: Louisiana US Consumer could see dampened benefit from lifting oil export ban. What is this guy trying to say here?
Mark: So Louisiana right now is under a Democratic government. So if you take that and think about lifting the export ban, what this guy is basically saying is that lifting the export ban is not really going to help anything, and it’s probably going to drive the cost of gasoline up, which is going to hurt the consumers in Louisiana. And he’s wrong.
He’s just wrong, pure and simple. He doesn’t understand that the crude that we produce in US we struggle to refine. He doesn’t understand that most of the crude that we refine, the gasoline, jet fuel and diesel come from imports, probably from the Middle East and Canada because we want that heavy crude. He doesn’t understand the price of gasoline is not directly tied to the price of crude.
Although there is a relationship, there’s a bunch of constraints in the market and there’s seasonal differences. So this is somebody writing an article trying to show something, but it’s really driven by a political slant.
James: Got it. What is maybe just one factual thing that we could pull out that would say yeah, he got this wrong?
Mark: Yeah, so one of the things that he’s talking about, he’s saying that the claims that removing the ban will increase US energy production and that he doesn’t think that’s true — are you kidding me?
If you’re a fracker right now and you’re getting $35 a barrel and we lift the export ban and you can sell it to Mexico for $70 a barrel, you don’t think that’s going to increase the energy production? Dude, have you ever been in an oil field? Don’t think so.
James: Right and I really appreciate the way he says the American petroleum is steep and an industry lobbying group. I’m just going to move on from that story, but it’s always funny when they throw that in there because of course API isn’t credible because they’re a lobbying group.
Mark: Well, you know this. You and I go to their meetings. They’re way more than a lobbyer. That’s part of what they do. Part of what they do is make sure we buy safe in the world offshore.
If you go offshore anywhere and that mud pump has some API certification, the guy that’s actually handling the jib, he had to go through some API certification course. The soap that you’re washing your hands with is API certified. So it’s way, way, way more than just a political lobby group.
James: Yeah. And it’s a networking group. It’s a family almost.
Mark: It’s a way to give back. I mean, I teach on Thursdays. I teach at a local high school. I teach biology through a grant by the API with some help from the SPE. Most of our money goes to scholarships for underprivileged kids. We stood up trade schools and some really horrible high schools so these kids would have a future. So yeah, we’re way more than a lobby group.
James: Way, way more. All right, so moving on to a little business talk, a little bidness talk, Chevron CEO sheds some light on how it plans to tackle a new era of oil.
Mark: Yes, so this is an investment piece. Talking about how Chevron is not doing as good as its peers, the BPs and the Exxons and the Shells as a low crude price environment, and they are right, but there’s a difference. So Chevron is a super major, right?
It has refineries, it has pipelines, it does E&P work, but Chevron predominantly is an E&P company. So of course, when the price of crude drops, they’re going to get hurt more than companies like Exxon who has a very robust gasoline industry and Shell and BP as well.
And so the other thing that you have to remember is when you’re doing a complex offshore project or even something on land like Wheatstone in Australia. That project is a 50-year life cycle from the moment of conception to the moment of decommissioning. So when you have these quarterly spikes or drops in the price of crude, you can’t just stop production on this project. You can slow it down, you can push things out.
So Chevron’s stock has taken a hit and it will continue to take a hit. This is an investment article about how their CEO John Watson is going to change some things, make sure they have positive cash flow. The truth is Chevron has positioned itself to rock and roll when the price of crude comes back.
But of course, Wall Street doesn’t see that. Because they’re a public company the CEO has to do certain things to placate Wall Street, to keep his shareholder value or the value of the shareholders at least in a place where they’re happy, maybe not ecstatic but happy, knowing that when the price of crude comes back, their stock values go through the roof.
James: One of the things we talked about on the other show, which is the new show if you haven’t heard of it, The Oil & Gas Careers Podcast, was the fact that Anadarko, a supply chain company, and ExxonMobil can do more with the dollar than anyone. What is Chevron’s specialty?
Mark: To back you up, that was actually Kinder Morgan that can do more with the dollar. Exxon is really an engineering and project management company.
Chevron? Chevron is a technology company that just happens to get oil on the ground. That’s their competitive differentiator. They invest in technology. They buy new technology.
They have a huge group called Chevron Technology Investment Group that literally goes out and look at entrepreneurs and start ups and say “Hey, we think this might be useful for Chevron. Let us give you some engineers and some money and let’s see what you do with this in a couple of years.” So Chevron is a technology company that just happens to get oil on the ground.
James: Awesome. We’ve got some big news coming downstream in terms of Dow and DuPont. Dow-DuPont set $130 billion mega-merger could spark more deals.
Mark: I saw this coming and it just makes total sense that petrochemical divisions of both Dow and DuPont are growing like crazy. I mean just ridiculous. But they have other divisions. They have agricultural divisions. You may have heard of Corning cookware. They make Styrofoam, fiberglass and a bunch of other things.
So it just makes sense if you take the two parts of their business, the petrochemicals that are growing, lump them together and form a different company and then take everything else and form a separate company that may or may not be spun off somewhere down the road so the petrochemical divisions are free to grow and not be dragged by all these other businesses that aren’t doing as well.
James: This is a good time, I think, to dive in because we’ve talked before about how downstream is more than refineries and we’ve mentioned plastics and chemical but we’ve even pushed a little further downstream here. We were talking about farming, chemicals, all kinds of different thing. So dig into that for me.
Mark: So that’s the parts of their division that are not downstream. So the agrichemicals, even though parts of the agrichemicals come from downstream, they have a whole agricultural division. They basically genetically engineer seeds to be resistant to certain weed killers.
They then manufacture the weed killers. They then sell the seeds to farmers and then the farmers use their weed killers, which means there’s less herbicides being actually placed in the fields which means the food is actually healthier for people.
They do the same with the pesticides. They genetically engineer seeds to be resistant to certain pests so you don’t need to use pesticides so the food is healthier to people. But that part of their business is not growing as fast as their petrochemical division, so they’re going to lump all that together.
Dow is also in wood products, pulp wood and paper and all that sort of stuff. None of that is growing as quick as petrochemical. So they’ll take DuPont’s petrochemical division, they’ll take Dow’s petrochemical division, lump them together, form a different company, and that would be let loose to grow.
Then the two companies that are left, they have the pharmaceutical division, a food center, an agricultural division, things like Kevlar or Teflon, those are DuPont products, they lump all that together. That will not grow as quick as the petrochemical division, and it may eventually, somewhere down the road, be sold off.
James: To pay devil’s advocate, there’s a regularity scrutiny subhead down here, the American Antitrust Institute, Diana Moss quote here, “The seed market is already dominated by Monsanto. You’re almost creating a duopoly in the market and that’s a problem.”
Mark: Have you ever heard of Roundup, James?
James: I have.
Mark: Yes, so Monsanto makes Roundup. Let me tell you the true story about Roundup that most consumers don’t know. Roundup is a herbicide that really doesn’t poison anything. What it does is it causes the plant to grow so quick that it kills itself. The moment Roundup hits the ground, it’s inert. There’s nothing left.
So what Monsanto has done in the last couple of years is that they’ve engineered seeds, soybeans, wheat, corn, whatever, that are resistant to Roundup. They make their money by selling the seeds to farmers who then only can spray their crops with one herbicide, which is Roundup, and the moment Roundup hits the ground, there’s nothing left, there’s no chemical left.
So it’s extremely safe for people to eat and it’s very productive for the farmers because you have no weeds in your crops that compete for nutrients and light. Monsanto dominates that world globally.
What Diana Moss is saying is they let DuPont and Dow spin off their agricultural division, they basically have only two people at play in that role. I don’t know agricultural so I don’t really want to comment on that. I see her point. My gut tells me there’s probably some other players growing in that market that she’s probably not mentioning but like I said, I don’t really know agriculture so I don’t really want to talk about that. I don’t know anything about it.
James: Yes, understood. Just from a general philosophical view, I got to believe that any competition is good. So if you bring in a second then maybe a third and fourth and fifth and so forth will come running.
On to the Seeking Alpha story of the week as we pretty much always have one anyway and the end of fossil fuels — not so fast, my friend.
Mark: Yeah, it’s funny that you put this in here because I’ve been paying attention to the Climate Conference going on in Paris and a bunch of environmental groups from the conference ended announced that this was the end of fossil fuels.
And the thing I found so funny about it is they were announcing it using their iPhones, and they were announcing it on billboards and they were announcing it using plastic letters on signs. It’s like do you even know? Where do you think all those stuff comes from?
So for our audience there is no end of fossil fuels. I have my personal opinion, which is as we move forward in time we use less and less hydrocarbons for fuel. We’ll still use them for chemicals and stuff and I think eventually the demand for fossil fuels will end before the supply of fossil fuels end.
I mean it’s too engrained in the world economy. We have a bunch of countries now that are moving out of poverty into their own industrial revolution that can only be fueled by fossil fuels right now it touched every part of our life. In Europe and US our pollution has went down since 1970’s here in the US even though our productivities went up.
Our C2 emissions that went down for the first time this year, which means we’re over the hump. So end of the fossil fuels, no because that makes some good marketing stuff for the environmentalists absolutely, but doesn’t even touch reality.
James: I really like this. It’s not a new graphic. This is from 2009, but products made from a barrel of crude oil.
Mark: Oh, yeah. I mean I did something for Thanksgiving were I released a graphical twitter and it showed that literally the game of American football could not be played without petroleum products because it showed every part of a football game that petroleum is used to manufacture everything from helmets, uniforms, to the actual ball, to the playing field, to the lights, to the stadium stands to the straw in your Coke, to the label in your beer bottle. Sorry, the reality is it’s part of our life.
And it’s a good thing, right? It’s taken people out of poverty, our rate of death per climate rate incidence has dropped 85% in the last 20 years, our environment is cleaner, our water is cleaner, and all of that is someway responsible because we use fossil fuels.
James: As you say that, I can’t help but think of my buddy Eric over there in Kalamazoo, and I say over there because I’m actually recording this from Michigan, I’m up here visiting my son and having a well, we both had the flue for the last couple days, so we’ve been partying, but we had a little break in the party.
But regardless, Eric is a rampant anti-fossil fuel person, but mixed in with his anti-fossil fuel posts are pictures of jam band concert festival in the middle of a field somewhere. And I’m just looking at the things and saying like okay, see all these trailers? You see all these lights? You see all even the XLR cords that are plugging in the microphones? Do you appreciate the ability to do that? I mean I’m not sure.
Mark: Not only that, but think about wind energy. Think about those blades in those wind turbines. Those blades could not exist without the composites from the oil and gas industry. The wires that carry electricity down that tower out into the grid or insulate it with insulation came from the oil and gas industry. The circuit boards are made from plastics from oil and gas. I mean literally wind power could not exist in the US without the oil and gas industry. People just don’t get it.
James: Yeah, we win. All right, speaking of winning, I should say, restructuring practices staff have grown amid oil downturn. So I always want to put a spotlight on something that’s grown in a downturn. Is this a good or a bad thing?
Mark: It’s neither. It’s just a business opportunity. It was interesting you put this in here because the last couple of days I’ve been watching what’s going on here in the US with the low crude prices, and I’m watching a lot of the smaller operators . They’re only able to make enough money to only pay the interest on their debt, not actually pay the debt down. And I started thinking it’s like is this going to create a distress debt market in the financial sector in the US for the oil and gas industry? And if you read this, it could be that’s what actually happens. So basically, other businesses are profiting off the misfortune of the offshoring operators here in the US.
And I say profiting. It’s not a bad thing. If you need to restructure, if you declare bankruptcy, you need the help of bankers and financial analysts and a lawyer if you’re a big company. And of course those guys need to get paid.
So you could look at this in one way and say these guys are prospering over other people’s misfortune. But no, it’s just a business opportunity for somebody to come in. And this is talking about several firms that are growing that are hiring people. They help these people restructure. So it’s actually creating jobs.
Nobody wants to see people get laid off. I mean I don’t. Nobody that’s in the oil and gas industry likes to have oil below $40 a barrel. But here’s a good example of where there’s a play in the market that came out of nowhere and people are filling that hole and they’re making money off of it.
James: Not only that, but yes, they’re profiteering off of peoples… Well, a lot of those people made some pretty, I don’t want to say bad decisions or pretty bad decisions. But when it comes down to it, a lot of companies got overleveraged.
Mark: Yes. These companies aren’t trying to put you out of business. In fact, if they do their work well, they’ll keep you in business. Now, you may shrink by 50%, your credit rate may be downgraded, but you’ll still be here.
Even the guys that were overleveraged, if they get to the stress of that market and people are willing to finance them, then they can keep their business afloat and then hopefully they’ve learned so that ten years from now when the next downturn happens, they don’t find themselves in this position again.
James: All right. We’re going to have to cap with this one because it has 183,000 likes on Facebook, 27,000 shares. I was even seeing people far outside of the oil and gas industry, far outside of Texas, sharing this story. It’s just a good news story to close on here. Houston Company gives every employee $100,000 Christmas bonus.
Mark: Yes, that’s sounds like somebody who is not running a good business, but it’s the exact opposite. Hilcorp was a great corporation. So what they did, they did this a few years ago, maybe five or six years ago. They basically looked at all their employees and they said, “Look, we have certain goals as a company. If we hit the goals as a company, I will give everybody X.” I actually think it was a car.
So the CEO did the same thing for this year. He said, “Okay, here’s the deal. We have goals. If we hit our goals, I will give everybody $100,000.” And he did. They hit their goals and so literally every person from the receptionists, to the senior engineers got an extra $100,000 at the end of the year. I mean does it get any better than that?
Do you any other industry where the CEO would commit to that and then actually write all those checks for $100,000 each? I think this is awesome.
James: Those evil 1% oil field, fossil fuel, evil men giving out $100,000 to the secretary. I freaking love it. I absolutely love it.
All right, we’ve got The Onion on the weekend here. The Onion had their annual Year 2015 best stories. I just love all the ways that they can manipulate Joe Biden‘s face to look all kinds of different nefarious ways. So Biden worries legalized weed in DC will cut into his business. You can go ahead and read that.
By the way, all of the show notes, all the stories that we mentioned here, everything is at triberocket.com/tw42 on this one. We would usually transition into events, but we know it’s sort of the end of the year and the events are happening at people’s home. You got a chance to see a picture of my family, right, Mark?
Mark: Yes, it’s a huge family. There are people everywhere.
James: That’s only one side of the family, buddy.
Mark: So instead of talking about events, James, let’s talk a little bit about our new show.
James: Yes, let’s do it. So the Oil and Gas Careers Podcast is a show for anyone looking for a career in the oil bidness.
Mark: It’s not just anybody looking for a career, but if you have a career and you’re looking to advance you career, we help you with that as well. We’ve got some rave reviews. James and I got a lot of input in the last year about starting another podcast. This just made sense and people are loving it. So if you’re in the oil and gas industry and you’re looking to maybe change careers or see what other possibilities are out there, you need to listen to the show.
If you listen to this show and you’re not in the oil and gas industry and you’d like to get into it, you need to listen to our show. If you listen to it, it’s a different format, right? It’s a short 20-minute program.
James: That’s what I was about to say. There were a lot of people that liked the original because we started off at 20 minutes on this show and it evolved into a more long form. This one is back to that under 20 minutes in and out hit and run.
Mark: Yeah, it’s a different format and I actually enjoyed that it’s two different shows. I enjoyed that one as much as I enjoy this one. But folks, it you go in here and like it, help James and I. This is a brand new show so we really, really, really need your help.
Take a minute and a half and give us a review on our new show. We need it right now more than ever. It’s also a chance for us to help us grow our audience so that people that are looking for work in the oil and gas can find us and we can help them.
James: The reason he says we need it more than ever is because right now is the critical time in the launch phase where we are currently on the front page of Business News in New and Noteworthy. We were second to last, I should say.
We got one review and that pushed us up to where you could see us. So if we could get 1, 2, 3, 4, 10 more reviews, we would be able to be up in the front, and that would help us immensely because, well, it would help your fellow oil and gas people out there trying to find new careers or trying to break into the industry.
Mark: There’s unfortunately a decent amount of people looking for work in oil and gas so we’re trying to help them and we need your help to help them, so go leave a review.
James: Yes, it’s at triberocket.com/cpreviews. So that stands for Careers Podcast. If you can remember that, triberocket.com/cpreviews. I’ve got the link set up that takes you right into iTunes and same thing for this show because we haven’t gotten any reviews on this show since the last guy hated on me. So for this show, its triberocket.com/twreviews. But if you could help us out on the new show, that would be awesome.
Mark, we have a LinkedIn group
Mark: Yes. So if you enjoy the show, we have something that you’ll enjoy almost as much if maybe not more, is we have a LinkedIn group. It’s basically a sister companion to this show. Almost all of our listeners are on it. They are very active.
It’s an awesome place to meet new people, to get input, to get ideas, to pick people’s brains. I’ve seen people go out and make introductions for other people. I’ve seen James out there and help do some copyright. It’s our family, right? This Week in Oil & Gas is a family. So go join. You’ll be glad you did.
James: And wrapping things up. We have a first Friday Q&A. That’s the first Friday of the New Year. The first happens to fall on a Friday so talk about that.
Mark: So once a month, the first Friday Q&A, we actually take your questions and try to answer them. We’re not maybe 100% successful, but there’s a bunch of ways you can get the questions to us.
But if you have something that you don’t know, you have something you want to know more about or if you have something you just want to ask James and I, reach out to us. There’s multiple ways you can tell us. Give us the question and then hopefully we read your questions on the air.
James: Yes, so it’s at triberocket.com/qa. On that page, you will see options. First of all, you can just type your question in there, and the more detail you can give us, the better because we’ve had a couple of questions we just couldn’t answer because we didn’t know enough about the situation. So if you could give us a little detail.
Or we got our first voicemail last month, which was awesome, so if you want to do that, on the right hand side it says Send Voicemail. You just click that button. It’s really easy. All you do is click that button, record your voicemail, send it to us, we get notified and then we play that on the show.
Mark: Yes, so it just doesn’t get any easier. Submit your questions and we’ll try to answer them on the show.
James: Alright. And looking at the calendar, next week is Christmas. We already have a show ready to go for Christmas. Tell them all about that because it’s an awesome show.
Mark: We basically spent hours and hours…
James: When he says we, he means him. Mark LaCour did it.
Mark: Going through all the news article for 2015 in oil and gas, and we took all the top news articles and that’s what our show is all about. It’s a bit of a retrospective show. I think it came out really well. There’ll be some stuff in there that you’ll go, “Oh, darn. I forgot about that but you’re right.” So look out for it because it’s a really good show.
James: So that is the top 14 oil and gas stories of 2015. I love all the retrospective things that come out toward the end of the year so I thought it would be fun to do that. That’s what’s coming up next week, and then the following week, we have the Q&A. So go to triberocket.com/qa to submit your question.
I think that’s it for me. What about you, Mark?
Mark: So folks, do great work, pay it forward, and we will see you next time.
James: Go find some grease, guys.