How to drive oilfield operational efficiency, Halliburton sells Baker’s offshore fluids unit, and a $750M refinery upgrade creates 2500 jobs in Red Wing’s backyard.
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Iran Signs Oil Deal With Total, Deal Done In Euros
A Pipeline to South Asia Prosperity
Halliburton Said to Plan Sale of Baker’s Offshore Fluids Unit
Lower Prices Push Oil and Gas Industry to Further Standardization, Big Data
Lean Six Sigma Projects: 5 Questions You Need to Succeed
Oil slump reverberates in chemicals
Low Crude Driving Downstream Boom
Flint Hills Resources plans $750 million in capital investment at its Minnesota refinery
THE RELATIONSHIP BETWEEN MATERIALS SELECTION AND MACHINING PROCESSES
9 Things a Salesperson Should do During a Business Downturn
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#050 Oil and Gas This Week Podcast: Oilfield Operational Efficiency Maximization
Transcripts Courtesy Of
James: I’m James Hahn II.
Mark: And I’m Mark LaCour.
James: And you’re listening to the Oil and Gas This Week Podcast brought to you by Red Wing, the number one Oil and Gas Podcast in the world Mark LaCour Episode 50. How are you doing?
Mark: I’m doing great. Episode 50, it’s so cool that we got here. Two more and it would be our one year anniversary.
James: Two more. This is the show for busy oil pros who want to quickly keep their finger on the polls of the industry. Mark, it’s NAPE weekend. I’m already exhausted.
Mark: We had fun yesterday, didn’t we?
James: We had a blast. We met some really great people at the Icebreaker last night.
Mark: Yeah, and then I’m on my way back as soon as we finish recording this show. I have interviews to do all day long. So it’s going to be a busy two days for us.
James: Yeah, you got interviews and I’m going to be walking the floor, getting to know some people, shaking babies, kissing hands, doing all that stuff. But I had a revelation from you yesterday at the NAPE Icebreaker Party.
Mark: I bet our audience is going to laugh when they hear this.
James: I’m going to try not going to get emotional, but you thought that show was going to be a waste of your time, Mark LaCour.
Mark: Yes, I did when you first proposed us doing a podcast, in my head, I go this is a total waste of time but I did it as a favor to you and I will be the first to admit that it was not a waste of time and I was completely wrong. But yeah, when you first talked about it, I was like nah, I don’t feel like doing that but I’ll do it as a favor.
James: So when did you realize it wasn’t a waste of your time?
Mark: When people started reaching out to us and we could help them, and it’s like wow, we really reaching a bunch of people of people out there that enjoy and see benefit in this podcast. Good job on your part on convincing me to do something that I didn’t think was worth my time.
James: That is so funny to me because I never heard you say that. We were talking to Neil Wente. So we’ll get one of his articles here as we go through them but that was really hilarious to me. Good on you for giving me a little sympathy of favor and getting this started and now here we are. One year and you have got some news on an update on what we might be doing for our one year.
Mark: Yes, we are planning a live event where our audience can come sit live with us and ask us questions which we will record the show for first Friday Q&A, but it will be live at a very cool venue. We’re not going to announce the venue yet but the event will be a live show where our audience can come sit down, have something to eat, have something to drink and just talk to us.
James: I’m so fired up about this. It’s going to be like a real production. We’re getting cue cards, get everybody cheering when they need to and all that stuff. It’s going to be awesome. I really look forward to that but we have got a lot to get to because we got to get back down to NAPE and you got your interviews, I got some business to do.
So let’s get into it. Top stories, number one, we’re going to kick it off. Total is jumping right in. Iran signs oil deal with Total, deal done in Euros. I don’t know if that makes a difference but regardless, what’s going on?
Mark: It’s actually one of the big things in this agreement. Now, this headlines sound sensational. The truth is Total never really pulled out of Iran. They’ve had an office there. They have done a bunch of business there but done a bunch of production of development there and they had an office there even during the sanctions.
So this is them just basically picking up from when they left off. The interesting thing though is that the dollar, the contract, the buy between 150 and 200,000 barrels of raining oil was done in Euros instead of dollars.
Maybe our audience doesn’t know this but most of the world, oil deals are done in American dollars except the countries that force you to use local currency and then the oil companies as quick as they can convert that local currency to American dollars. That’s done for a reason, right? Because the dollars are the most stable currency on the planet but because this deal is done in Euros, you’re starting to see the shift where Iran is starting to try to do more business in Europe.
The reason they’re trying to do that is take away market share from Russia so that there is some geopolitics going behind this deal but here is a good deal for Total, one of the super major jumping in and getting ready to start, getting Oil and Gas produced and then shipped it to Europe so that Europe fuel prices remain low.
James: How does this play into the whole Iran coming online, apocalyptic crisis in terms of prices, story?
Mark: Yeah, there is no apocalyptic crisis. This is just another producer that’s found a market, right? What’s going to happen is eventually they’ll end up shipping about 300,000 barrels per day to Europe and Europe needs this because Europe is buying that same 300,000 barrels from Russia.
So this will allow Europe to reduce the chokehold Russia has on the European economy and of course Russia has then shifted markets, starting to sell a lot of their hydrocarbons to China. This is just a shifting in the market globally.
James: You said that they never really pulled out. I see it says in the article here, there is stuff about them doing business in the ’90s and so forth. So can you give us a little back story on that?
Mark: Yeah, so there actually is a bunch of back story back here. Total has been doing business in Iran. When I say doing business, helping the Iranian government and people actually drill wells in going production. Now, some of my folks that have been in the industry for a while, they would never go back and I think 2010, Total was criticized and said that they were actually paying bribe money.
And then I think in 2013, the US government actually had civil and criminal allegations and Total agreed to pay I think about $400 million because the basically caught their hand in the cookie jar. The CEO of that time was expected to face charges, but then if you remember, he actually tragically died in a plane crash so they dropped the case of course because he’s dead but that’s kind of the back story. Total has been there for a long time.
James: There is also — they touch on some trillion cubic meters of natural gas.
Mark: Yeah, it’s one of the biggest gas reserves on the planet and that gas is — the appetite for the gas is only with the world. Once again you end up delivering cheap clean environmentally friendly fuel and drop and prosperity parts of the world that don’t have it right now.
James: Yeah, and I’m thinking right back to the Russia angle because you’re hearing a lot about what we have been even talking a lot about that about Russia and going through Ukraine and all the pipeline issues going on there. So I guess is it kind of like the — I hate to use the term, but the lesser of two evils?
Mark: No. That’s the right thing. It’s the lesser of two evils. A lot of people in US don’t like Iran because of a lot of the stuff that’s happening in recent history but I’m telling you, exposing the Iran to the Western way of life will gradually shift their politics the way that people act and actually make them a better steward in the world that they are and just give it time.
James: All right, moving from Iran over to South Asia, a pipeline to South Asia prosperity. So there is more pipeline talk. This about the stuff that’s going on between Iran and — I’m sorry, not Iran, Turkey and Afghanistan and so forth?
Mark: Yeah, it’s actually right. There is a huge pipeline because I think it’s over a thousand mile pipeline. It’s in the works to actually transport natural gas from Turkey’s big gas field to Afghanistan, Pakistan and India, all with growing economies that can’t meet their current energy needs.
People here in US and Europe may not understand this or you don’t relate to this but those growing economies, they cannot produce enough electricity for their people so they have massive brownouts everyday because there is a delta. There is not enough electricity to meet the need of the people.
So this pipeline will do a couple of things. It’s going to shift the electrical generation plants that are using coal right now which are horrible for the environment to natural gas. And then they’ll also of course use the natural gas for cooking and heating that water.
Once again get away from dirty coal. So this is a great, great, great project. It’s going to take a while to build this thing but it looks like it’s going through all the countries have agreed upon it, the budget is in place. So now, it’s just a matter of actually doing the construction to get gas flowing.
James: What’s this toppy agreement they’re talking about?
Mark: Toppy is a consortium between Afghanistan, Pakistan, India and Turkey. So you almost think of it like a separate holding company where the different countries have all chipped in and agreed to have regulations in place to make this thing easy. So it’s just a way to have a central place, build this pipeline where a bunch of countries will benefit.
James: In their groundbreaking, you said it’s going to take a while to get it going, what is a while?
Mark: This is probably about — this is probably about a three or four-year project and its several billion dollars in investment. The good thing is they actually have the skilled labor in that part of world to get this thing done.
If you’re trying to do something this big in the US, you would actually run it to labor issues more than anything because we still have enough skilled labor to build pipelines like we used to.
James: Could you get a job if you were an American going over there?
Mark: You know what, James, when we do our careers podcast, we’re going to actually talk. I have a couple of jobs that people are in the US looking to hire people’s certain skill sets and ship them oversees. So, yes.
James: Interesting. I’ll have to ask my buddy Jake Mitchell because he’s working for a company now that’s supplying subcontractors. I wonder if they do any work oversees that way. All right. How do you stop the biggest gas league ever? This is a story that has been going on for a while. I haven’t brought it up but it’s kind of an elephant in the room at this point and I just want to know what’s going on.
Mark: This article is in Bloomberg and it has a bit of a bias. I don’t like really the way it was written but there are some facts in here. A couple of things that you understand, natural gas, a big natural gas is methane. Methane is a greenhouse gas.
So this natural gas company — By the way, neither natural gas or methane can you actually smell. So what the natural gas companies do in US is they add I think it’s sulfur dioxide to it which basically makes the natural gas smell like rotten eggs and they do that for safety reasons. That way, if there is any leaking, you can smell it. If they didn’t do that, stuff would blow up and you would never know because you couldn’t smell it.
Anyway, this is a natural gas company at Southern California. They basically have taken a depleted oil field and use it for natural gas storage. They pumped a bunch of natural gas in this depleted oil field. That’s a very common thing.
They do it here in Texas except they do it in salt notes. What happens is you wait for the price go up then you pull it out of the ground and you sell it for a profit. It also buffers your demand cycle throughout the year.
James: You were talking about that with my friend Adam yesterday. They’re about this whole people doing that across the oil field right now. There is kind of a market developing there.
Mark: Well its storage. Storage is huge in the US. We don’t have enough storage. It’s all used up so people are building storage facilities. A lot of times, when I say storage facility, people think tank forms. No, it’s usually underground depleted either water or oil fields or salt nodes that they reengineered using the store, this mass amount of gas underground.
But anyway, so this natural gas company had a leak and they could not stop the leak and it really wasn’t that bad. But unfortunately what happened is they tried to fix it themselves basically using a drilling mud and salt water to overcome the pressure in the ground so it stopped the leak.
In the process, they blew out the casing. If you don’t know the casing is basically the last line of a fence that lines the well bore so nothing can leak and so you get clean seals. Well since they blew off the casing now, the leak is intensified dramatically and it’s pumping up tons and tons of natural gas.
Now unfortunately this article, they keep calling it methane. It’s not methane, its natural gas that has methane in it. Of course, they’re doing that because it comes out as evil Oil and Gas companies when you stop methane, methane, methane. So now they got Boots and Coots out there who is the world’s best at taking control of wells that are out of control. Boots and Coots is drilling a relief well and they’ll put some new casing and then they’ll stop it.
James: I love how civil it is, just boom.
Mark: Well its Boots and Coots. This is what they do all the around the world.
James: Tell me about Boots and Coots because I haven’t heard of these guys. Actually, no, I have heard of them but I don’t know the background.
Mark: Red Adair. Okay, Boots and Coots started I mean in the ’60s. They do some crazy — they came up some crazy engineering stuff. My favorite one is they took this bulldozer and they armored it with steel plate, thermo steel plates and they rigged it with water sprinklers and they put a big pipe on the end of it. At the end of that pipe, they put several pounds of T&T. They would go to well that had a blowout.
So basically the tree was blown off the well head and the well is on fire and they would turn the water on because they’ll get close at fire was so hot it would melt the bulldozer and kill the driver so it had to be covered with water the whole time and the driver would drive the bulldozer with the pipe and T&T up to where the flames where and they pulled that nation core in the T&T and would blow out the wells like you blow out a birthday candle. How crazy and they invented that.
James: That has been a whiskey baby. Let’s go —
Mark: This is what they do. In desert storm, all those oil wells that were set on fire, they put all those wells out. This is what they do. This probably isn’t even hard for them. It’s not on fire for one thing. So yeah, they’ll take control over and get it fixed. It’s an accident. Accidents happen.
The good thing is nobody got hurt and of course, the local residences are complaining about a lot of health issues and the gas company as doing something I think very responsible. Anybody that’s complaining they’re housing them. They’re getting hotel rooms or their houses and they’re paying for it this whole time. So they’ll get this under control.
James: Great. All right, under control Halliburton said to plan to sale of baker’s offshore fluids unit, what’s going on here? Are they getting their balance sheet under control?
Mark: No. This is all Department of Justice concerns over being non-competitive, being a monopoly. Halliburton, before they even bought baker, I mean I know for a fact they have done this. They did the research and figured out what business against baker that have to sell off so that DOJ wouldn’t give him grief? So they would actually got this deal go through.
This article in Bloomberg is talking about how they’re going to end up selling off one of the more profitable business units which is offshore fluids, which is a big part of bakers profit building part. But Halliburton has their own offshore fluids and they’re all drilling buying stuff. so it’s not going to really hurt Halliburton.
The truth is Halliburton has no choice. They have to vestify some of this so they can get approval from DOJ. Just earlier, we’re talking about Boots and Coots. Guess who owns Boots and Coots now?
James: Baker Hughes or Halliburton.
Mark: Halliburton, yeah.
James: They knew this was coming because as an entrepreneur, when I hear you say — Sorry folks. Its NAPE week, I’m a little off. But what I hear you say that it’s going to — that they have to sell a very profitable business unit. My heart hurts a little bit, right?
Mark: Yeah, but they have their own drilling fluids business unit. Halliburton does. Baker and Halliburton have a lot of similar businesses.
James: Who would be the buyer of something like that?
Mark: Another one of service companies, right? Whether for Slumberger or maybe even investment company who wants to get Oil and Gas business, who knows.
James: Anybody who wants to make some money off a really good drilling fluid business unit basically. All right, lower prices push Oil and Gas industry to further standardization and big data.
Mark: Yeah, we have touched on this before. Basically, the low crude prices have hurt the industry’s profitability, not the entire industry, a part of the industry. So what’s happening is articles talk about how we need further standardization because believe it or not, there is a lot of non-standardized stuff that goes on this industry.
James: Believe it or not?
Mark: Yeah, also big data and analytics. Look at the data that they have sitting there already and use it to help the business become more efficient. This article goes through how a lot of option companies are cutting Capex and that they need a way to function in lower oil prices.
Now, you know my prediction is we’ll be back to 60 relatively soon but we’re not going to hit 80 or 100. So this is a long-term strategy by the Oil and Gas industry and it deals with stuff like operational efficiency, operational excellence and this is just a good article showing how standardization and analytics of big data can drive more profits.
James: And they’re talking about capital investments going to be declining in 2016 that’s not too much of a surprise.
Mark: That’s mostly expensive oil of upstream projects, not midstream or downstream projects.
James: Define here efficiency and standardization.
Mark: Efficiency, just doing things better. Let me tell you a real world example of standardization which cost this industry a ton of money. Any deep water field or any offshore field, we’ll take a field in the Gulf of Mexico somewhere. Anadarko may have 30 wells in that field and they need to order 30 trees with somebody like FMC or Cameron. Every one of those trees could be a little bit different. Think about that.
It would be cheaper to take the most robust tree that you can build and make it a standard so you could build all 30 trees in the exact same way and then there is no standardization in the industry. So BP will have its own standards.
Exxon has its own standards. Chevron has its own standards, so on and so on. Just standardizing something like a tree would drop millions of dollars of cost savings and it would be just as safe and just as reliable. Actually in some ways, it’d probably be safer.
James: In that case though, are they pushing back or not wanting to do that because of the competitive advantage?
Mark: No. It’s because what you always hear in Accenture, we have never done that before. It’s the version to risk because this is how they have always done it. Now with technology, we can mitigate that risk.
Literally, you could build a tree that’s as robust as the worst well and make that the standard so you have basically over-engineered trees in every other well and then still be cheaper because you built everything the same.
James: So our crude price is going to drive a standardization like that?
Mark: Yeah, you’ll see and the tree may or may not be a good example but you’re already starting to see standardization. You’re seeing operators work with their vendors and their service companies to come up with a cost savings that revolve around doing things the same way, the same process, the same time, same delivery, same warehouse that sort of stuff. It’s just an evolution in the industry that’s needed.
James: Yeah, I see that the last subhead here, Let’s all work together. So it looks like they’re definitely headed in that direction which is good because yeah, that’s — Well it reminds me of the conversation we were having yesterday on the way down NAPE when you’re talking about moving from Caliber to whatever. I’m not the gun guy, you are but how we have to take bullets from Italy and they don’t work as well.
Mark: I forgot that conversation. Yeah, so our US Armed Services basically changed its side arm to a nine-millimeter years ago so that other native countries could loan this ammunition. Basically, if one of our soldiers is in a firefight in Italy, it needs to borrow ammunition from the Italian soldiers. It works in this gun. Yeah, same thing.
James: Same thing. Hopefully they choose the right one though because you were telling me that you don’t want to have to deal with the pistol that they have now.
Mark: I’m a big believer in big bullets. I like a 45, a 40, 45 mm, 357, something has some stopping power. You probably really should not go down this right on the show, James.
James: I would as far as I wanted to but it was good, it was fun. Through on the LinkedIn here on the point of operational efficiencies, Neil went, wrote a really fantastic article on triberocket.com. Lean Six Sigma projects, five questions you need to succeed.
Mark: Yeah, I thought this is a great article. Good job, Neil. What he did is he talked you through Lean Six Sigma. Now let me explain something out there because I know somebody has a complaint about this. That’s actually two methodologies mooshed together. Lean Manufacturing and Six Sigma.
Both of them are efficiencies methodology. They go about a little bit different and GE has combined them and called it Lean Six Sigma. For the purest out there, this is actually two different methodologies working together. We know that, right? But it works our GE and Neil wrote a great article. So tough.
But he talks you through a high level on what you should be thinking about when you’re looking at trying to prove efficiencies. Not necessarily the steps but how you need to think and that’s the key to it because you literally have to change the way you think about stuff.
This is a great article. Anybody out there that’s looking to improve efficiencies, if you’re in a ten billion dollar year company or you’re a $100,000 year company, you should read this, right? It’ll give you some ideas on how to increase efficiencies even in your own daily life. So this is very well done.
James: Just walk us a little bit through that thought process.
Mark: One of the things you need to think about is literally back up look in all the processes and figure out where is their waste? Where are you wasting time, where are you wasting money and then put those in order, right? What’s the biggest waste and what’s the smallest waste. Don’t try to fix all of them.
Start with the big ones. Fix that first and that’s going to make the biggest impact. The other thing is communications. Communication, if you don’t have proper communication, you’re naturally going to have inefficiencies. You can have waste.
It’s starting small, think about continuous improvement questioning why — If there is any type of repetitive process that you do that you can eliminate, a real common one is email. How many people do you know use their email inbox as a file cabinet and they reread the same email three, four, five, eight, 20 times and they leave it in there as a to do reminder.
That’s unbelievably inefficient way to deal with that. So read through this if you have some interest. Neil did a great job.
James: All right, and then moving on, man I was really happy that I came across this article because they go into materials with some depth, the relationship between material selection and machining process.
Mark: Yeah, I can’t believe you found this. This is going down to the different grades of Inka Del.
James: Yeah, baby. This is inside baseball talk right there.
Mark: This is about how non-fairs metals oxidize and the oxidization layer protects them from corrosion but then it becomes an uneven layer. So this is a deep, deep, deep, deep, deep, deep dive between materials and how the machine process works. Even I don’t want to go this deep into fasteners and threads and bulb valves and how all these stuff is machine. If you’re in this world, this is a very good article.
James: Yeah, it’s one of those articles I might not know everything that’s in it but I sure feel smarter just reading it.
Mark: Well, the other thing is a lot of people don’t realize what the thought that goes into something simple as a bolt. I mean there is a lot of engineering, a lot of work, a lot of material selection and to make something as simple as a bolt.
James: I’m trying to think of a follow-up question but I don’t even — This is just great stuff. Like I said, total inside baseball from chemical engineering is actually chemengonline.com. All of these by the way in the show notes triberocket.com/tw50 on this one. If you want to take a deep dive and really geek out on this one, it’s in there. Let’s talk about oil slump reverberates and chemicals from chemistry world.
Mark: I’m not exactly sure I agree with everything said in this article. Basically what they’re saying is that because the petrochemical industry, the raw feeds that price which is usually crude and natural gas gotten so cheap that the prices of the petrochemicals were also coming down, so the profit margins have stayed the same.
They talk about the — They think this is going to push back a lot of petrochemical projects here in the US. I don’t see that James. I mean I really don’t. I got my finger on that polls really well right now and there is a lot of petrochemical projects in the US that are being built that are being permanent that there is budgets being released for.
I think the one thing that article misses a little bit is the petrochemicals that we make in the US, we don’t hardly use any of them. We export them all and the countries have a huge appetite are the emerging economies, India, China that sort of stuff.
Yes, China’s economy is slowing down but it’s not going backward. India’s economy is on a roar. So not really sure I agree that the low crude prices are going to hurt the petrochemical industry.
James: What about going back to this sparring, this interesting conversation you had with Adam Ferris yesterday. Were you talking about that with low crude prices, people are going to stop producing and so I don’t know, he had some interesting predictions around that. Can you talk about that?
Mark: His big thing was that he didn’t think production was good curtail off. So supply would stay oversupplied and we’re going to stay in this very, very extremely $30 barrel crude market. I just don’t see it happen.
You’re already starting to see production go down especially in what I called the swing, rigs or something like on land like fracturing words relatively inexpensive to stop drilling and just wait versus a deep water project where it just, you would lose hundreds of millions of dollars when you stop that project in the middle of it.
So rig counts going down, drillings go down, completion is going down. Our production actually went up last month with the rate of production is declining. I’m confident production will slow down here in the US, things like the frack fields. Once the prices come back, of course, they’ll go back into production again.
James: But time, back to the petrochemical downstream, midstream side of things.
Mark: Whatever is my — I don’t have a crystal ball but I’m seeing a lot of pipeline projects go on and the pipeline companies are very smart. They don’t just build a pipeline and hope they make money. Before they even build anything, they get contract signed. So they know how much money they make so they know it’s economically feasible to build the pipeline.
So the pipeline project is going on and US is already funded. They’re already guaranteed income for five, ten, 20, 30, 50 years. The cheap inexpensive crude natural gas inherently means that we’re going to consume a lot of it. It inherently means we need to transport it and pipe is cheaper and safer than rail. So I see no slow down of the pipeline projects either.
James: And then that led to an interesting conversation on debt restructuring and then we met a man who is there to do exactly that.
Mark: Well what’s cool about him is he is in this debt restructuring world but not Oil and Gas. He saw this opportunity and so they came in open office on Houston I mean literally just recently because he sees this huge demand for debt restructuring. Oil and Gas go out in the business and make some money. By him opening a business making some money, he’s going to hire people which means he could drive prosperity and so good stuff.
James: Good stuff and then moving onto your article, low crude driving downstream boom.
Mark: Yes, so I wrote this a while back but the facts in there are still the same facts, right? In 2014 downstream in the US and Canada spent about $22 billion in new projects, 2015 which is last year. It is 27.3 billion. 2016 it could be $48.9 billion worth of projects. That’s not counting all the pipeline projects and infrastructure road, electrical plants that needs to be built to support this.
James: That’s just pure projects.
Mark: I’m sorry?
James: Pure projects. That’s not the tangential things that will come along.
Mark: Right, and then I even talked about the boom in labor in downstream. In 2017, this is the interesting number. 2017, we’re going to need 188 million man hours of labor. We only have 119 million man hours capacity. Where does that 78 million man hours can come from? It doesn’t exist which means it’s going drive wages up which means labors could be competitive in downstream.
So I guess the walk-away from this is if you’re worried about your job, if you got a package, you got laid off. If you’re upstream or service company, look at downstream especially here in the US. There is a need for what you do there.
James: Can you give us some examples of companies? Because that’s where I really stumbled because I have talked to a lot of people about this because I have learned it from you and it’s easy because when you talk upstream, I can go well Exxon and blah, blah, blah all the way from super majors to major independence and so forth. What are some companies downstream that people can look at?
Mark: You just name one. So Exxon, their downstream business is on fire. Chevron, BP, Shell. Now, I’m telling you, somebody is looking for a job, the best place to go to a company like CBI. CBI is one of the suppliers and it stands for something bridge something. It’s an old, old, old company.
We just look up CBI incorporated. They have provided all the labor — or almost all labor in downstream and midstream. They’re hiring like crazy right now. That would be the best way to in and then once you’re in, once you go work as a subcontractor for someone like Chevron or whatever, then you can get to know the company if you want to jump ship later, you can.
James: All right, I’m writing it down CBI so I can throw that in the show notes and anybody who is listening that is in that predicament of looking for a position. You can also listen to the Oil and Gas careers podcast but I will put that CBI link into the show notes, triberocket.com/tw50. Moving on, Flint Hill’s resource plans $750 million in capital investment and its Minnesota refinery.
Mark: Do I even say anything at this point? They’re using 3 quarters of a billion dollars in their refinery do some upgrades and some major equipment repairs. It’s going to be the large construction project at the refinery in the last 20 years. They’re going to need about 2500 —
James: 2500 people.
Mark: Yeah, additional workers right? Here is a prime example of what we have been saying. Downstream is on fire, here is a bunch of jobs. This is a long-term deal. This isn’t going to be like a one-week or two-week thing.
This is a $750 million investment. This is probably three to four years worth of work. If you’re looking for work, check this out, once again in Minnesota at least, here is some prosperity for the town at these refineries in Rosemont I think. Good stuff.
James: I bet that they are probably got their guys outfitted in Red Wing since they’re up there in Minnesota.
Mark: You know what, I bet they are. I bet they have Red Wing FRs. I guarantee you they’re in Red Wing boots.
James: Definitely at least. The largest investment is the replacement of two 1960’s era coking units and integrated heaters. What are those?
Mark: Coke units like this big huge enormous steel drum that they basically bake the crude oil in. Let me tell you something what’s cool. I’m glad you caught that. Do you know what’s going to happen when they replace this 1960 era cokers with new ones?
James: Remissions? I don’t know.
Mark: Yeah, you know it, right. It’s going to reduce emissions dramatically. So here once again, here is an example of the Oil and Gas industry helping to clean up the environment. This thing has been running with the ’60s with the old cokers. Now we’re going to put new ones in there much more efficient as far as not polluting the environment.
James: Yeah, so we give jobs and we do the environment.
Mark: You never hear this in the news.
James: Nope. Only here on Oil and Gas This Week ladies and gentlemen. All right, this is a really great article to finish off with because we’re down there at NAPE and nine things a sales person should do during a business downturn.
Mark: Look. I’m a former — I’m a recovering sales person myself. Been there, done that. One of the things I don’t l like and anybody that has ever worked for me and quite frankly people in our industry. If you’re in sales in Oil and Gas, quit whining.
There is stuff you could do about these low crude prices, right? I just went through a quick list of things that would actually help you in any sales person, not just in Oil and Gas in the downturn.
So things like changing your playing field. If you have always sold to the super majors, guess who you maybe go try to sell to. We just talked about refineries, right? Change your playing fields, live and die by your numbers.
This is sales 101 but how many cold calls do you make? How many meetings do you have? How many proposals do you have there? The other thing is, becoming efficiency expert. If you’re stuck selling upstream, figure out a way to save time and money. They need time and money savings that people will buy from you.
And then the other thing is the knee jerk reaction for a lot of sales organizations in the downturn is to drop prices. Don’t do that. Why would you decrease your margins when your sales suffer? Put your heads together, come up with a new solution that impacts the business greatly and people will buy it.
There is still hundreds of million dollars even in upstream of company’s buy and stuff. You need to solve a problem they have and then I just go through a whole bunch of other things to help you in a business downturn. This is my way of trying to keep the people from whining and actually help you make your number this time if you’re a salesperson.
James: Because the only thing that matters in this life Mark LaCour is to get them to sign on the line which is dotted.
Mark: It doesn’t count until you have income and contract.
James: It really doesn’t count until that check clears the bank. That’s the truth. All right, moving on, those are our stories. We have our union of the week. I love when I pick one that Mark doesn’t think it’s funny. Disney World opens new Ordeal Kingdom for family mount balance and having been to Disney World and mostly see at their point.
I think it’s really nice that these guys are doing this because I’m pretty sure that every single family vacation of mine ended in some meltdown at a theme park. We have a winner though, Mr. Mark LaCour for our Red Wing offshore bag giveaway and who is this winner today?
Mark: Chris Tapalo. He’s an expert at bossing consulting group.
James: Boston consulting group, we go deep to unlock insight and have the courage to act. We bring the right people together to challenge, establish thinking and drive transformation. We work with our clients to build capabilities that enable organizations to achieve sustainable advantages. We are shaping the future together.
I’m going to put it in the show notes because you know I’m a big company culture, corporate culture gig and these guys the culture down. It’s a whole section of their website is bout their values.
Mark: That’s cool. Folks, if you want one of these offshore bags and they are awesome, let me tell you. Go to link that’s in the show notes. All you have to do is sign up real quick and you can sign up every week and we’re giving these away until when James, into March?
James: Into March.
Mark: So no purchase necessary. See page for official rules. Go do it.
James: Go do it and it is at redwingshoes.com/podcast. Shout out to Red Wing. Awesome people to work and everyone that has got one, we’re getting tagged on Twitter and LinkedIn and people are taking pictures and everything. It’s really fun. It’s a lot of fun to be — I don’t say the funniest thing for me is getting to know more of audience. I love that.
Mark: The stuff that we get back, we literally have people snapping snapshots of the journey of this bag and I just think its cool because you’re right, we get to know our audience so much better.
James: Yeah, all right, events on deck, a big one not next week but the following week IHS Energy CERA Week. I mean this hugely dominates the headlines even mainstream press gets a lot of — It’s almost like a sales force event in Oil and Gas. It really dominates. So that’s coming up February 22nd through the 26th at the Hilton America’s. Have you ever been to IHS CERA Week? I have never gotten there.
Mark: I’m not going this year. I usually go. What I like about CERA Week is that literally the global energy thought leaders are in one place at one time talking at what’s going on in the industry. I usually get some really good data on CERA Week. I got conflicts and I have customer stuff I have to do s I’m not going to be able to make it this year.
James: Let’s see if I can get a press pass. Maybe you can get me a press pass.
Mark: You’re late.
James: Kind of late, I know. I do have an article on my website called “How to Annoy and Dominate your Competition Especially if Their IHS CERA.” That’s kind of fun.
All right, 10th Midstream Summit, I got to get out to this because I have never been to a midstream conference and this is actually happening next week the 16th through the 18th at the Houston Marriot West Loop. Have you ever been to this? It’s the 10th annual.
Mark: I have been. It’s a smaller conference but its all pipeline people and I love it because you get to actually talk to people in the business. It’s not about your sales people, nothing at sales people but it’s actually business leaders in the midstream part of the industry.
This year, maybe you and I will go. Maybe I’ll get us a press pass because this is would be a good year to actually pick their brains about what they see out in the next 10 or 20 years.
James: Yeah, good time for projections and for me just learning more in terms of the other segments of this industry. And then finally Mid-Continent Digital Oilfield Conference, February 17th through 18th. That’s happening up in Tulsa, Oklahoma. So anybody near Tulsa that wants to get to know about the internet of things or the digital oilfield as we call it here. You can head up that way. Any comments on that one?
Mark: Yeah, if you get a chance to go to any of these Digital Oilfield Conferences, now this is around fracking and stuff but you really should go. This could be the wave of the future. The more that you can learn about it — not only is it interesting but the more you set yourself up for future success no matter what your career is.
James: Yep. I got to get to — I just got to get to know more of the Digital Oilfield. That’s my thing. But today, we have got to hurry up and get out of here because we got to get downtown to George R. Brown. Before we do that though, thank you everyone.
We’re getting so many questions since we did our first Friday Q&A. They are just flowing in. I know I’m seeing you on everything. Have you seen all these questions coming across?
Mark: Yeah, it’s awesome. We’re seeing this trend, so not only are we getting more questions, they’re better questions and it’s getting actually harder sometimes to answer them. But I love it. So keep them coming. This is a way for you to get your question answered on the air and we’ll give you a shout out if we use your question.
James: Yeah, and it’s at tribrocket.com/qa or you can go– most of these questions now are coming through my contact page at triberocket.com and then just click contact and the drop down, one of the options is ask a question for the QA shows. So we have some reviews brother not just some, several. We had four reviews from last week.
Mark: Oh, that’s awesome.
James: Thank you, thank you to these people going out and taking that minute and a half. So let me just bust through this as quick as I can. All right, we got five star review. Great. I loved this one because it validated me which I need as a middle child.
“Great marketing in Oil and Gas expertise,” from GR7_11, five stars, “The combination of marketing strategy and Oil and Gas expertise makes for a very effective podcast. I enjoy the format in which they break down the news by selecting articles and explaining also love learning about Mark LaCour. He seems to have all the same interests as I have.” That’s frightening. I’m a little frightened.
All right. “Great show, great job with the show,” Superman234 five stars. “Great job keep us informed with the world of Oil and Gas.” Thank you for listening and then BDM, that’s the title of their view. Andrewtalk06, “Great show. Entertainment. Entertaining and informative. Easy to listen to and gives a broad view of the markets, the guys doing this show around this something huge.” I dig that, thank you.
Mark: I love that.
James: We’re onto something here, Mark. This might be going — You might be going somewhere, kid.
Mark: Even though I thought it was a waste of time.
James: Even though you thought it was a waste of time. All right. Lastly from iTunes, “Love this show,” and this is from RenKenge five stars. “I stumbled across this podcast a few months ago. Really appreciate what you guys were doing here. It’s a great way for me to stay in the loop of what’s going on in the industry and I look forward to it every week.
Keep up the great work and I’ll keep listening as long as you guys keep producing and enjoy the rig tour.” That’s freaking awesome. We’re going to keep producing man, because I’m looking forward to show 200. I don’t know if Mark is because then he has to talk to me 150 more times.
And then over — I said that I would read these because I have to because awesome that people are giving us reviews on Stitcher. So we got three reviews on Stitcher, five stars, “Great show with great content. Mark and James, great podcast ion November 2015.
I powered through the podcast from the beginning and have not missed an episode since.” That’s awesome. You know what Mark, I hear that all the time.
Mark: Yeah, I do too.
James: All the time, people listening to every episode beginning to end. It’s fantastic. “It has truly helped me to learn more about the industry and how it works. It’s amazing how it touches just about every other industry in the world. Thank you for the content and breaking news down with your explanation so that anyone listening can understand it. Keep up the great work. Thank you.”
And then this next one, I missed the joke in here but how we break it down. Five stars from Addie, “The most useful energy podcast I have found online and excellent show that reveals the in workings of the energy industry instead of using jargon and quoting analyst figures which probably makes sense to space orangutans. I love it how they explain how the industry functions in a very simple manner.” That’s because I’m a simple man and I have to mark down and say what does that mean? So thank you, Addie. That’s hilarious and then PK Wilson, this podcast is the bizniz.
James: “During such a difficult time, this podcast has promoted everything positive about the future in the vast industry. Keep on keeping on.” I love it brother.
Mark: We’re going to keep on keeping on.
James: I love it. We are going to keep on keeping on. Us pointing on light on the positive, that’s what we’re all about because I can’t say it enough. No matter how bad things seem, remember, you work in a 33 trillion dollar industry. If you can’t fat and happy from this pie, you probably just need to go bag groceries.
I’m just saying. All right, Mark. If you made it this far in the show, we would love it if you would share it. You can go to the show, it’s triberocket.com/tw50 and just click the social button of your choice or if you don’t feel like doing that, triberocket.com/shareli will go to LinkedIn, /sharetw will go to Twitter, /sharefb will go to Facebook. If you made it this far, come on, hook us up.
Mark: Come on, folks. It takes a minute and 40 seconds. Share it, give us a review and it just helps us get out in front of more people who can enjoy our podcast.
James: Definitely. Let’s get out of here, Mark. We got business to get to.
Mark: Yep, remember folks, oops —
James: Mark almost did the sign off for the Oil and Gas This Week podcast.
Mark: Do great work. Pay it forward and we will see you next time.
James: Go find some grease, guys.
Mark: I know it sounds horrible like I’m an old man but that I’ll be way past my bedtime.