Mainland Machinery Ltd

Economic Impact of Unconventional Oil and Gas Production

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Economic Impact of Unconventional Oil and Gas Production

It has taken millions of years for the ancient organic matter trapped within North America’s geological formations to become the crude oil and natural gas used today.

These naturally formed reservoirs of carbon and hydrogen are easy to extract with minimal damage to the environment.  They can be extracted using “conventional” drilling and extracting methods that use natural pressure.

However, many of these oil and gas reservoirs are in decline. Thirty years ago finding oil in North America was not difficult; it was abundant. Nowadays, on the other hand, oil is hard to locate and more costly to extract.

To meet the rising demands, the world has turned to unconventional methods of oil and gas production. All of these strategies impact our world today.

The Growing Demand For Oil and Gas

In 2011, Canada produced more than 2.1 million barrels of oil per day. Even that large amount is not sufficient to meet the country’s demands.

Over the past 20 years, the demand for oil has dramatically risen; making crude oil one of the most sought after, actively traded, commodities in the world.

In fact, it is predicted that the global demand for oil will rise by 14 million barrels per day and will reach a demand for 101 million barrels a day in 2035.

With the decline of conventional resources, to bridge the gap between supply and demand, Canada and the US are exploring and developing unconventional production methods.

Unconventional Oil and Gas Production

Canada is fortunate to have the oil sands of Northern Alberta. And although Alberta’s oil sands are the world’s second-largest source of unconventional oil, this vast unconventional source of oil has many benefits and downfalls.

For one, extracting oil from sand is an expensive process. The sands are located in a remote area of Canada that is difficult to access.  Skilled workers must be brought in from other areas of Canada, which also adds to the productions costs.

The oil sands continue to be a source of controversy.  Environmental activists such as Greenpeace and Pembina Institute have increasing concerns of ecological harm, as well as the effects of global warming because of the greenhouse gases emitted during the process.

In the United States, the resurgence in oil and gas production is beginning to redraw the global energy map.  For one thing, fracking has become an “energy game changer”.

New emerging technologies are unlocking access to light, tight oil and shale gas resources.  As a result, this unconventional form of oil and gas production is changing the role of North America in global energy trade, and influencing the prices of gas and electricity in the US.  Prices have dropped substantially, giving the industry a competitive edge.

This unprecedented growth of shale production makes the US the largest liquids producer worldwide.  In 2012, of all natural gas production, shale production was 39% in the US and 15% in Canada.

According to a joint US Energy Information Administration (EIA) and Advanced Resources International (ARI) study released in June of 2013 – although a dozen other countries have conducted exploratory test wells – Canada and the US are the only major producers of commercially viable natural gas from shale formations in the world.

Outside of North America, China has registered commercially viable productions of shale gas; however shale contributes to less than 1% of China’s total natural gas production.

Unconventional Oil and Gas Production

The ability to unlock new types of resources (such as light tight oil (LTO) and ultra-deepwater fields) and to improve recovery rates in existing fields shows promising signs. Each year, the amount of oil that remains to be produced is on the rise.

Are Our Oil Troubles Over?

New oil production methods and resources must be discovered. The level of success with LTO needs to be replicated and unconventional resources need to be discovered throughout the country.

For example, the Lorraine Formation in the St. Lawrence Lowlands is predominantly unconventional gas silt and is considered an available resource, but no estimates are available at this time.

Shale gas resources have also been identified in Western Canada, Quebec, the Maritimes and a very small area in Southern Ontario.  Extensive exploration is being conducted to quantify the potential of these resources however sustained production is only occurring from the Horn River Basin in northeast British Columbia and a small field of shallow shale gas in the Wildemere region of east central Alberta.

It is crucial to continue the exploration and advancement of technology in this industry, as the economic impact of unconventional oil and gas production is too beneficial to ignore.

Mainland Machinery Ltd

Strategies to Address the Energy Industry Talent Gap

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energy industry talent gapStrategies to Address the Energy Industry Talent Gap

Oil and gas companies are facing an industry-wide skills gap across various occupations, and this has the energy sector scrambling to implement long-term solutions to widen their available talent pools and better adapt the existing workforce for an ever-expanding industry.

With more than 50% of the current workforce, mainly consisting of technical specialists and senior managers, being eligible for retirement in 2015, the oil and gas industry is facing a series of complications. These include a lack of adequately skilled employees capable of replacing said retirees, competition over a restricted talent pool and a lack of prospective university students interested in petroleum engineering

The ‘Brain Drain’ – a term referring to the loss of skilled and educated individuals to other locations, motivated by higher pay or preferable conditions – is real and is causing a complex, multi-faceted, and ever-looming problem. Overall, a global shortage of technical talent has been forecasted in the oil and gas industry, with only Europe and Australia seeing a surplus.

Before the crisis can be averted it’s necessary to know where the industry stands. Only after such analysis can the issues begin to be addressed directly and the long-term plans and goals be implemented in an effort to reverse the Brain Drain into a Brain Gain.

Taking a Look at the Problem

A 2014 survey conducted by KPMG in collaboration with Rigzone uncovered largely overlooked issues contributing to the talent shortage. The survey analysis consisted of over 2,000 energy sector professionals in a broad cross-section of the industry.
Through its findings, four problem areas were discovered:
1. connection and communication,
2. age and generational gaps,
3. application of technology,
4. and resource development collaboration.

The report outlines the general approach to each of these problems and potential ways of addressing them.

Proposing Solutions

With all the complexities in mind, the problem simply reduces to a need to increase human capital in the industry in a comprehensive and cooperative way.

In his address to the 2013 Petronas International Human Capital Summit, Jay Doherty, partner and co-founder of Mercer Workforce Sciences Institute, highlighted key issues regarding the deficit in human capital and provided the following insight into the solution pathways provided by workforce planning.

Expanding on Connections and Improving Communication

The strongest need that organizations are currently facing is ensuring that their workforce is capable of performing expected job functions. This is pressuring companies to devote resources into recruitment, resource development, and improving how their existing workforce is utilized.

The key to meeting this need is to broaden how connections and communications are made. Internal communication needs to be formalized in order to promote collaboration in corporate culture. Over the last seven years, oil and gas firms have seen a 12% drop in talent building, as they rely more and more on buying out existing employees from other firms, or other industries. It is vital that companies focus on building talent from within, as opposed to perpetually looking outwards.

External hiring from universities remains stagnant at roughly 10%, while hiring employees from competitors continues to grow, and represents just over 45% of new hires. University recruiting can be bolstered by closer participation with institutions by helping design curriculums that meet the needs of the industry in order to attract and produce more graduates in a given specialty. The use of recruitment specialists can help screen and integrate graduates into corporate culture. Training and development must be focused on internally to develop a talented pool of professionals for internal recruitment and talent retention.

Another alternative to tackling this issue is it to integrate technology by means of Internet job boards and social media tools. Job boards are used to fill just under 19% of open positions in the industry, and can be further utilized and expanded on to attract new graduates. Additionally, social media can widen the pool of potential applicants. The various mediums allow employers to promote discussion of company events, industry achievements and plans for future developments. This can be a powerful tool for connecting to a large audience who may recall a company when considering choices for future employment.

Bridging the Age Gap Will in Effect Bridge the Talent Gap

The generational gaps between each segment of the workforce are largely overlooked. These gaps are between the Pre and Post-Baby Boomer era, as well Generations X and Y. The gaps are evident in the differences in approaches to learning, addressing authority, adoption of new technologies, and the kind of experience that only comes with time – creating a standard process to bridge these gaps is no easy task.

Companies must find a way to ensure that the older and retiring workforce passes on its knowledge to the younger workforce in order to utilize years of knowledge with new technologies and a modern mindset. Viable options include implementing knowledge-sharing and training programs that are able to filter out experience-based knowledge versus opinions.

Implementing New Technology for the New Workforce

Embracing technology into the recruitment process is paramount. Collection of “Big Data” with the use of business intelligence software will help forecast future workforce needs, as well as being able to compare labour force demand, and how it ties into matching and comparing occupational labour market data by cross-referencing skills and experience requirements. Such tools can be used to map out and plan career paths, as well as help in restructuring internal labour market analysis.

Ditching Recruitment Poaching for Cross-Industry Collaboration

In its study, KPMG found that the industry’s top risk assessments were difficulty in recruiting from the competition, as well as losing existing talent to its competitors (risk levels were assessed at about 3.4 and 3.7, out of 5, respectively).

Rather than focusing on competitive recruitment strategies, companies can differentiate themselves in how they operate. Companies must collaborate on how to identify and take advantage of labour capital with geographical and skill set considerations in mind. In essence, the industry needs to make the initiative in developing potential resources to widen the overall talent pool and serve the entire energy sector as a whole, in other words: mutually-assured prosperity.

These various solutions to the four main problems in the energy industry talent gap are the stepping stones to a brighter future. By adapting their practices and procedures to include and implement these ideas, companies put themselves in a position to take the lead in the industry and maintain a competitive edge. Both the labour market and the energy industry must begin addressing and overcoming this challenge before it’s too late.

Mainland Machinery Ltd

Climate Change Impacts Mining

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climate change impacts miningClimate Change Impacts Mining

Do you believe that the climate is changing?

Only 39% of mining businesses believe in climate change. A mere 19% have made plans to adapt to it. Whether you believe it or not, climate change is real and it is happening. Temperatures are higher than normal through all of the seasons. This is causing immediate problems, as well as other potential issues that may not been seen for years.

Are you prepared for climate change?

The climate changing is going to impact Canadian mining in big ways. Winter roads will be the first things to be affected by these changes. In fact, ice roads have already seen a difference. In 2006, the Diavik Diamond Mine, in the Northwest Territories, dramatically reduced the number of days their ice road was available. This decrease ranged from about 70 days down to 42 days. This reduction forced the company to have their shipments flown in, which increased their shipping cost to a little over $11 million dollars.

Elevated Temperatures in Ontario

Increasing temperatures in Ontario will likely result in less rainfall throughout their summers. This will directly affect the amount of water mines will get. In addition, this could result in exposed raw tailings, mine drainage and dust suppression. On the other hand, Northern Ontario may see an increase in rainfall, which can weaken dams and berms.

Studies show that mining companies’ executives may be the biggest challenge when planning for the effects of the climate change. The magnitude of the climate’s impact on mining operations is not always apparent, which is why they lack planning. Two surveys were conducted across Canada with samples of 100 people, which included mining industry workers, executives and engineer managers. These studies showed that those, who make the biggest decisions, do not see the need to plan for climate change impacts. However, it was found that the workers do see the need for cautionary plans.

The reason for this is due to several factors such as research gaps, uncertainty and costs. The mining industry’s biggest response to climate change, thus far, has been reducing greenhouse gas emissions. It is a good start and will immediately help. To create a secure future, miners should start planning for the long term climate changes.

Ways to Fix Pending Issues

To convince the executives, more effective communication about the problems that arise with the climate changing. By creating climate change models, and analysis, as they affect regional areas, it becomes easier to visualize potential problems, and their especially the long term negative effects. These models will help all mining companies see the need for planning for the adaptation to the changing climate.

Canada’s government can also ease the planning process by providing data and resources that can help miners plan ahead. They can also provide funds to help minimize the danger for high-risk areas. New technologies are needed to help the mining industry deal with climate change. This shows a demand for investors, innovators, contractors and suppliers. Additionally, this upcoming demand will create many more career opportunities for Canadians.

Mainland Machinery Ltd

The Geopolitics of Oil and Gas

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The Geopolitics of Oil and Gas

An unsettling topic for some and a downright pariah for others – the combined form of geography and politics when associated with production and distribution of oil and gas leaves little room in the polarized debate over which country deserves to have their share of the world’s oil and gas reserves.

How Did We Get Here?

Around the onset of the Second World War, the US supplied about 63 per cent of the world’s oil, with a barrel of oil costing about a dollar (roughly $17 in 2014 dollars).  Many decades later, an important shift took place when the US reached its peak oil production in 1970; as the output was squeezed, oil shifted from a suppliers’ market to a demand market.

That is why the Organization of the Petroleum Exporting Countries (OPEC) oil embargo in conjunction with the Yom Kippur war in 1973 was such a game changer.  In the weeks before the Arab-Israeli conflict, oil was just $2.90 a barrel (in the same range as the pre-second world war price in today’s dollars). During that war, the oil producers’ cartel began flexing its economic muscles causing the price of oil to quadruple by the end of the year, it would never again return to pre-1973 levels.

A new dynamic emerged: energy exporters discovered their influence in global markets, the global balance of power in energy shifted and importing countries found themselves vulnerable as never before.

geopolitics of oil and gas

 

 

 

 

 

 

 


Source: Institute for the Analysis of Global Security

The Geopolitics of Natural Gas

In a study directed by Harvard University’s Geopolitics of Energy Project at the Kennedy School, the Center for Energy Studies at Rice University’s James A. Baker III Institute for Public Policy, and the University of California, Davis Graduate School of Management, it was concluded that some of the most dramatic energy developments of recent years have been in the realm of natural gas.

Large quantities of North American unconventional gas are now commercially viable, changing the strategic picture for the continent and raising the possibility that the United States could become an exporter of natural gas to Asian and European markets.

The modeling approach to global gas markets used in this project highlights the importance of economics and geology in determining the future of natural gas, but, importantly, the study pays particular heed to the geopolitical dimensions of natural gas.

The study recognizes that the interplay between international politics, security, and energy is multi-directional and therefore seeks to:

  1. Identify the political, economic, geopolitical trends and realities that could frustrate or facilitate increases in global gas consumption and production in the decades ahead;
  2. Anticipate the impact of these geopolitical realities, their implications for domestic or global gas consumption and production, and how they will affect global gas markets;
  3. Assess how these changes in the global gas market will influence global politics.

The Geopolitics of Oil
It’s a fact worth keeping in mind that many of the world’s leading oil producing countries are either politically unstable or at serious odds with the United States. Most of these countries are members of the Organization of the Petroleum Exporting Countries (OPEC). While OPEC countries produce about 40% of the world’s oil, they hold 80% of proven global reserves, and 85% of these global reserves are in the Middle East. The oil wealth of OPEC countries allows them to be the strategic pivot of world politics and economy, but their record on human rights, political stability and compliance with international law is, unfortunately, not positive.

It is important to have an understanding of the geopolitics of oil and gas when trying to comprehend current economic conditions surrounding these scarce resources. Western countries must bear in mind the fragility of political circumstances with the leading oil producing countries and make decisions that continue to decrease dependence on these unstable countries.

Mainland Machinery Ltd

Off Take Financing in Mining

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off take financing in miningFinancially Helpful Off-Take Agreements

Off Take Financing in Mining

Mining companies in the global market face challenges such as unpredictable pricing, human resource and technological issues. However, one of the main challenges is finding suitable financing sources for the extraction and processing of mineral resources. Royalty deals, off-take agreements, strategic partnerships and earn-ins are becoming increasingly important for miners of all stages.

Given the lack of cash flow without a securable asset, the most promising methods of financing exploration happen only through providing equity. Since miners require the support of investors who can also buy the resource from them, it then becomes easier to raise financing. It is in this situation that the off-take agreement has become a popular form of financing.

Definition and features:

An off-take agreement is signed between a producer of a resource and a buyer. This happens before the construction of a facility, which can guarantee a market for the future production of a mineral resource. It ensures a market for the miners, especially for a mine prior to its establishment.

The term “off-take agreement” covers a wide variety of contracts for the sale of mineral production from a mine:

  • Sale agreements to metals traders, smelters and other end users
  • Commodity forward and hedging agreements
  • Tolling agreements with refiners
  • Take or pay contracts with project sponsors, end users and other parties

The off-take agreements are commonly used in bulk commodities such as coal, iron and limestone. The price and volume make up the bulk of the revenue. It gives the project company stable and secured revenue to pay its project debt obligation, its operation and process costs, and deliver its certain required return to the investors. Miners are provided with pre-production advances of cash in return for future compensation in the form of equity stakes, loans and convertible bonds, exclusive rights to purchase production at a determined price, and take or pay agreements. For example, the Canada Lithium Corp. in November 2012, announced a five-year off-take agreement with Tewoo ERDC (Tianjin Products and Energy Resources Development Co., Ltd., China) for a minimum annual commitment of 12,000 tons of battery-grade lithium carbonate, with an   additional 20% off-take in 2014.

Benefits:

Off-take agreements are payment agreements for a determined volume or guaranteed source of demand for the project, which can help to secure other sources of finance. A great example is from a Canadian firm, Avanti Mining Inc., who in April 2014, entered into an off-take agreement with SeAH M&S Corp. The company, SeAH M&S, will purchase, at prices based on the market price, up to 20% of its molybdenum concentrate production from its Kitsault mine over a 13 year period.

Lenders financing a project will generally make long-term sale contracts, which ensure the debt can be adequately serviced. It ensures a market for the future production of the resource. This guarantee increases the chances of acquiring financing from banks and lenders. Also, even start-up miners can get both the loan and the off-take in a single agreement. Loans linked to off-take agreements are another form of non-dilutive financing available to project developers.

Off-take agreements offer an alternative form of financing that allow junior mining companies to finance long-term developments. Of course, a successful agreement only works when both parties have done their due diligence, as well as minimize any risk associated with the extraction and processing of mineral resources.

Mainland Machinery Ltd

Oil and Gas Partnerships: A Proven Success

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oil and gas partnerships

Oil and Gas Partnerships: A Proven Success

Strong partnerships are important when investing in the oil and gas industry.  Since you cannot invest directly into an oil well, being a member of an “investment club” or entering into an investment partnership is the ideal solution.

The MANY Advantages of Investment Partnerships:

  • You’ll find the RIGHT opportunity to invest in.
  • Diversify your energy portfolio.
  • Reduce your tax liabilities.
  • Get higher return on your investment income.
  • Discover (and share) best practices for maximum gains.
  • Amplify your project’s value by learning about leading technologies and innovations.
  • Expand and profit from any new frontiers in oil and gas.

Why Limited Partnerships Could Be Right For You:

Limited partnerships provide an ideal way for investors to get their feet wet without having to purchase expensive stocks from established gorillas like Chevron and Exxon Mobil.

A limited partnership is a business structure formed by a group of co-owners who pool their capital, resources and knowledge in order to invest in larger portfolios.

Investors would enter a partnership agreement that allows one or more limited partners to invest in a company’s cash assets. In other words, the group finds and contributes to a variety of businesses that purchase or lease real estate in order to locate, extract and sell commercial oil and gas.

In Canada, limited partnerships in the oil and gas industry provide a substantial federal tax shelter, and in some cases additional provincial tax breaks. The advantages of a limited partnership include: 100% tax write-offs, a low minimum investment of $2,500, and decreased risk because you are only liable for the amount you’ve contributed.

Keep in mind, that there are tax implications when you redeem, so it’s best to seek advice from a qualified tax professional regarding the best timing and strategy.

Furthermore, when investing in the right oil and gas company, limited partnerships increase the likelihood of higher returns.  The odds of seeing a substantial pay-out with a small oil and gas company is much higher than what stocks might offer.

Where do you begin? 

Unfortunately, the number of limited partnerships available to Canadian investors is limited. For this reason, it’s important to find a limited partnership with an established track record.

There are organizations available that will play “matchmaker” and help you establish potential partnerships with oil and gas companies.

Commonly referred to as an Oil and Gas coach, these matchmakers provide many key benefits.

Oil and gas coaches will bring together resource-holders and investors. They will look at current portfolios and suggest beneficial investment partnerships.

As industry experts, oil and gas coaches help to transfer knowledge, information, and technology to a large global network of investors.  They help innovators, researchers and governments maximize the value of their energy resources and help support inward trade.

Collaboration is the First Step to Success!

The new Australian Innovation Partnerships is a fine example of how this collaboration works.

Australia has a federal labour plan designed to increase jobs, expand growth and become more productive and competitive in the global marketplace.  They describe their partnership as a network of 35 businesses and research institutes, all backed by government.

The partnership consists of fortune 500 companies like Woodside, Shell and Santos (who do business on a large global scale) as well as universities and research facilities (like Western Australian Energy Research Alliance) and a mixture of small and medium sized enterprises.

Together, this dynamic partnership forms a large network of knowledge, skills and resources that can dramatically affect future growth.  They continue to develop leading strategies to improve workforce skills and productivity, encourage innovation, and increase distribution and marketing channels in order to see larger global penetration and more international investment.

When limited partnerships are executed correctly, investing in oil and gas can be a profitable option, worth consideration.

Mainland Machinery Ltd

Top 3 Safety Issues in Oil and Gas Industry

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safety issues in oil and gas industryTop 3 Safety Issues in Oil and Gas Industry

When the National Energy Board (NEB) issued their paper on Emerging Issues in Oil & Gas Industry Safety Management, they established the ground rules that essentially ‘put safety and environmental protection at the forefront of its responsibilities in protecting Canadians’. From the perspective of industry leaders, oil and gas producers now have a set of guiding principles upon which to gauge their current processes and look for any gaps in their corporate safety culture.

The NEB has identified three oil and gas safety management issues that are the areas “where all regulated companies must invest effort and resources to demonstrate continual improvement of safety and environmental protection outcomes.” In her article, Alina Libkind of Field ID and Modern Safety distills the major components of the NEB’s paper and articulates what can be called the Top 3 safety issues in oil and gas industry, namely:

 1. Corporate Leadership and Safety Culture

At the risk of stating the obvious, company leaders do have a profound influence on overall safety culture. Their attitudes and day-to-day decisions guide the corporate performance and culture. It is management that sets the standard for safety culture throughout an organization, by taking an active role in overseeing the safety of the company’s operations.

Senior corporate leadership must play an active role in the way an organization manages safety risks. Although major accidents occur infrequently, the potential consequences are so high that leaders need to recognize:

  • When major accidents are considered credible business risks;
  • Regard the integrated nature of many major hazard businesses as including the potential for supply chain disruption;
  • The management of processing safety risks should have equal status with other business processes such as financial governance, markets, and investment decisions and so on.

2. Effectiveness of Management Systems

Effective implementation of management systems is what companies find difficult. Effective management systems must be consistently applied and thoroughly integrated. They facilitate the process by which companies share information and intelligence thereby promoting better decisions.

Although everyone in a team has a role to play in ensuring an organization’s safety, security and environmental protection, goals and accountability must be assigned. Performance and improvement of integral safety systems should be measured and tracked on an ongoing basis.

3. Hazard Identification and Risk Mitigation

Many high hazard industries define and measure the safety of their operations as the occupational health and safety of individual workers. This approach to measuring safety performance has two known limitations:

  • It places an inordinate amount of attention on “slip and fall” hazards, which may divert awareness away from other hazards and risks that need to be readily managed;
  • It is one-dimensional and is an incomplete and inaccurate account of the overall level of safety of an activity, a facility or organization.

As many high profile incident investigations have demonstrated, focusing on personal injury data while limiting or excluding information related to process safety and corporate culture can have catastrophic effects. For the purpose of creating a more complete picture of safety performance, regulators and companies should consider indicators relating to both high frequency, low consequence events (typical worker injuries) and low frequency, high consequence incidents (fatalities).

An effective understanding of present risks must ensure that active and potential threats to process safety (asset integrity, human factors, organizational deficiencies, and safety culture) are effectively identified and managed by companies in order to maintain the greatest margin of safety. The Senior Leader Considerations recommended after each of the issues is considered by many industry analysts to be very helpful. They comprise lists of possible questions to start a dialogue within a company and generally provides a great deal of information that is actionable.

In order for companies in the oil and gas industry to demonstrate safety as a priority in their organization, leaders must consider the example they set, the effectiveness of management systems and hazard identification. By addressing these three issues, business leaders can begin to take responsibility for safety and pursue a better overall workplace.

Mainland Machinery Ltd

Housing for Oil and Gas Workers

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housing for oil and gas workersFind Your Happy Place – 5 Star Housing for Oil and Gas Workers in Remote Areas

If there is one thing that can keep oil and gas employees who work on a remote site happy, it’s premium accommodations.  Since most oil and gas industry remote-area workers originate from distant places, they want to replicate their own home environment as much as possible. Included are a few suggestions to reach that goal.

Feeling Special

When hard working employees feel special and appreciated, they’re one step closer to being loyal to their employer.  Keep in mind, it might not take much for an employee that required a large amount of resources to find, to jump ship to the competing company if the quality of life they’re subjected to is representative of a cost-cutting manoeuver by the accounting department.

Start Here

Providing at least 60% of home-like conditions is a good starting place. The idea of a ‘home away from home’ really resonates with oil and gas workers when they can come home to a fully functional residential unit. The kind of accommodations referred to goes beyond the motel experience and may be just shy of a four-star semi-luxury hotel stay.

Wish List

There are a few ‘must-haves’ for worker accommodations. This means the heart of the unit must have a kitchen – complete with a microwave oven, a good size refrigerator (not a mini-bar fridge), large sink with a filtered-water dispenser, table and chairs, and a pantry to store their non-perishable groceries.

The living area should have at least a 40”HDTV, and an entertainment center complete with CD, DVD, and MP4 players.  There should be a self-service laundry room nearby, as well as a gym and fitness center with advanced equipment, and an internet café with Wi-Fi throughout the complex. Sleeping accommodations should include a full-size bed (not a single or twin) in a bedroom with a decent amount of storage.

Talent Pool

It is crucial to remember that replacing an experienced professional or technical resource is approximately one-and-one-half times their annual salary so it is in the best interest of employers to have employee accommodation as a high priority. As oilrig workers value their accommodations they may allow that to be a deciding factor in whom they work for.

Healthy & Happy

Having all the comforts of home is not only a good start, but acts as a central hub for providing other perks that impact health and performance such as sleep, nutrition and relaxation.

Unfortunately, irregular sleep patterns are a fact of life for most oilrig employees due to their long work hours.  High levels of attention are required when observing proper safety precautions over the course of a single day and this is only possible with adequate amounts of restful sleep.

Proper nutrition plays a similar role in ensuring this kind of performance at peak levels. Getting the proper nutrition is an absolute must to perform at optimum levels for long hours in inclement conditions, says Christopher Wanjek a health and science writer.

It’s also very important to permit sufficient time to relax after a grueling work day.  The key in this process is the ability to ‘shut off’ the workday and enjoy undistracted leisure time.

It’s Just Business 

From a purely business perspective, happy and healthy workers are good for the bottom line.  Since employees can spend more than half of a 24-hour day on the job, the rest of the day is theirs.  To that end, worker retention and performance can suffer if their quality of life is substantially lower than what they’re accustomed to at home. To retain employees when there is a lacking workforce and to maintain high quality performance from all workers it is necessary for employers to show their appreciation by investing in quality accommodations for their teams.

Mainland Machinery Ltd

10 Tips: Vetting a Marine Engineering Supplier

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marine engineering supplier10 Tips: Vetting a Marine Engineering Supplier 

Anytime you enter into a business relationship with a new vendor or supplier, you need to thoroughly research the company. Any business can offer goods or services. To really understand if a new supplier is a good fit for your company, it’s the details that should determine who you are going to work with. The following are ten tips to consider in vetting a marine engineering supplier

1. Factor in the supplier solutions using life-time costs

When investing in a piece of equipment that is meant to last for a very long time, the number one question to ask is if you’re getting the best value. It won’t help your business if you cut corners on purchasing, only to find yourself replacing that same item because of quality concerns. Consider adding the costs of maintenance, training employees to learn how to use the equipment and potential downtime to your business if the equipment malfunctions

2. Focus on engineering experience

Your potential supplier should have an open book policy with regard to the company’s past engineering projects. The shipping industry is picking up steam and moving at a rapid pace to accommodate the modern designs of vessels and containers. Does your supplier have experience adapting to these emerging technologies?

3. Start the dialogue with suppliers early

You don’t want to wait until your project is in the final phase of deployment before engaging with suppliers. They should be brought onto the project in the initial start-up phase. This way, you’ll quickly find out which supplier can deliver on their performance promises and which ones won’t make the grade.

4. Establish a relationship with the entire supply team

With a new supplier, you won’t be working just with the engineers; but also with sales and business development staff members, including their support team. You need to feel comfortable working with all levels of a company before signing over a huge contract. It’s vital that you get prompt and accurate information from your supplier contact and that the company speaks with one voice.

5. Conduct an onsite review

Before signing the final agreement, you are well within your rights to inspect the supplier’s manufacturing center. If you aren’t allowed on site, then you should seriously consider dropping that supplier. What are they hiding?

6. Demand witness testing

Anything can be made to look good on paper. For example, what if they are using an untested piece of equipment, do you want to take that kind of risk with your business? Don’t wait for the supplier to offer a full test. Demand that one be set up and the results be made instantly available for your review. Better yet, ask to have it done in front of your engineering team.

7. Review the track record

You should be working with an engineering supply company that can prove its track record of success. This includes following up on past client testimonials and third-party reviews. Anyone who is dodgy about sharing past performance reviews is someone you should be leery of.

8. Review material certification

Before ordering any piece of engineering supply, you should be able to examine a sample of that item. You don’t want to be surprised by a shoddy piece of equipment being delivered. Furthermore, ensure you trace the source materials for the equipment.

9. Make sure costs of employee training is covered by the supplier

A supplier shouldn’t just drop off a piece of equipment and be on their way. They should provide comprehensive training for your staff with regard to operation and maintenance of that item.

10. Find out about after sales policies

Tech support has become an important component of every product we buy. That is extremely vital with engineering supplies. The supplier you’ll be doing business with should be able to provide support assistance whenever it is needed.

Mainland Machinery Ltd

Oil and Gas Talent Shortage: New Talent Drying Up

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New Talent is Drying Up for the Oil and Gas Industry

Accordoil and gas talent shortageing to the International Energy Outlook released by the US Energy Information Administration, the global demand for energy could grow by as much as 56% before the year 2040. The bulk of that increase is coming from developing nations who are eager to join the world economy.

In order to keep up with demands, the oil and gas industry will take the lead by not only stepping up production, but by also expanding its overall workforce. However, a challenge is posed by the lack of skilled workers available to meet production needs. As the current workforce reaches retirement age, companies are scrambling to put aggressive recruitment programs into place due to an oil and gas talent shortage.

One of the first areas in the oil and gas industry that needs an influx of workers is on the deepwater rigs. The call has gone out for a new army of drilling, completion and intervention risers. Beyond the ocean rigs, the extraction of liquefied natural gas and shale gas also requires workers who are ready to jump on the line. Without a properly trained workforce, some of the new exploration and production projects could get stalled. If that happens, supply lines could be impacted, which in turn can drive up costs. That’s not something the consumer wants to face.

To address the growing workforce gap, leaders in the oil and gas industry are setting up training programs at community colleges, vocational schools and universities around the world. A primary goal is to attract the next generation of workers as they graduate from high school. The challenge is finding ways of making this type of work appealing to these young grads. Ironically, if
those same grads pursue an education in business or the legal profession, they may have a hard time finding gainful employment upon graduation. That doesn’t seem to be the case in the oil and gas industry. In other words, there will likely be jobs waiting for the new engineers, but the same may not be true for a young lawyer or business manager. In fact, many oil and gas companies are recruiting engineers from shipbuilding and infrastructure projects.

Beyond stepping up efforts to attract recent high school grads and other young students, industry human resource reps are turning to the military as a place to find qualified workers. Ex-service personal already have an appealing array of skill sets in leadership and project management. These are the qualities that would make them solid candidates for many levels of oil and gas industry work.

Additionally, retention programs across the industry are being expanded. This will help companies hang onto the workers they already have. These retention programs include expanded benefits, bonuses and other incentives. Fortunately, this is one segment of the business world where funding financial incentives won’t prove to be a burden on the company’s bottom line.

Companies also need to change their hiring practices. It may no longer be viable to strictly hire locally, especially when you consider how one company’s interests can span across several countries. The idea is to find the best people for the job and provide them with the freedom and resources to relocate. Bottom line: for the oil and gas industry to thrive, they have to find the best workers wherever they can.