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SBC 2011 Oil & Gas HR Benchmark

Summary presentation

This document contains forward-looking statements- that is, statements related to future, not past, events. In this context, forward-looking statements often address our expectation of future conditions including, without limitation, economic conditions, energy demand, energy supply and capability requirements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

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2012 Schlumberger Business Consulting. All Rights Reserved.

Schlumberger Business Consulting HR Benchmark gathered data from 37 E&P companies


E&P COMPANIES PARTICIPATING
11 2 8 8 2 6

Independent 13 18 Major NOC

North America Latin America Europe Asia Middle-East Africa

37 Oil & Gas companies 29 in 2010 24 in 2009 Almost 40% of World Oil & Gas production covered Most comprehensive qualitative and quantitative data set in the industry

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2012 Schlumberger Business Consulting. All Rights Reserved.

Over the years, the survey has developed powerful new concepts
FREQUENTLY USED TERMINOLOGY
PTPs Petrotechnical Professionals: geoscientists (geologists, geophysicists and petrophysicists) and petroleum engineers (reservoir, drilling, completion and production engineers). Number of years needed for a PTP to make non-standard, original technical decisions. Concept developed by SBC in 2006 together with the Supply Chain of Talent TM. Autonomous PTPs, i.e. those having acquired sufficient knowledge and experience to be able to make non-standard, original technical decisions.

Time to Autonomy

Experienced PTPs

Young PTPs

PTPs that have not reached autonomy status. They are still in learning mode and cannot be requested to make non-standard, original technical decisions. Average number of PTPs per 1,000 barrels of oil equivalent operated daily production Can be divided into experienced PTP Intensity or overall PTP Intensity

PTP Intensity

Source:

SBC O&G HR Benchmark 2011 TM A trademark of Schlumberger Business Consulting


2012 Schlumberger Business Consulting. All Rights Reserved.

Our message: HR is the main driver for long term production growth
AGENDA E&P industry is going through a major transition with tensions raising everywhere. High growth companies have more technical people than others and pragmatic HR policies: no barriers to promotion, higher diversity, on the job training. Time to autonomy is a key indicator companies seek to reduce Gender diversity is now mainstream, except for majors who struggle to increase women proportion in their workforce.

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2012 Schlumberger Business Consulting. All Rights Reserved.

By 2015, E&P industry will have achieved its crew change transition
PTPs PER AGE BRACKET ON A GLOBAL BASIS
% 25% 20% 15% 10% 5% 0%
Note:

2010 2015

20y -24y 25y -29y 30y -34y 35y -39y 40y -44y 45y -49y 50y -54y 55y -59y 60y -64y

65y+

Retirement rate: 20% for 55y-59y, 90% for 60y-64y, 100% for 65y+ Recruitment targeted inputted in the demographic profiles as follows: 40% in 20y-24y, 60% in 25y-29y Attrition at 1.4% (people leaving the E&P industry) SBC O&G HR Benchmark 2011; SBC analysis
2012 Schlumberger Business Consulting. All Rights Reserved.

Source:

Recruitment of graduates is pursuing its recovery


PTP GRADUATES GLOBAL RECRUITMENT TARGETS 2005- estimated 2016
Total Recruitment 12,000 10,000 8,000 6,000 4,000 2,000 0
Demand as per 2005 to 2010 Benchmarks Demand as per 2011 Benchmark

2005

2006

2007

2008

2009

2010

2011

E2012 E2013 E2014 E2015 E2016

Note: Source:

Excludes China SBC O&G HR Benchmark 2011 , Company data


2012 Schlumberger Business Consulting. All Rights Reserved.

Deficit of people is concentrated on mid-career population


ESTIMATION OF POTENTIAL 2015 TALENT GAP
Number of PTPs
All PTPs

Number of PTPs

PTPs OLDER THAN 35 YEARS


Experienced PTPs

137,800
current # of PTPs

Required # of PTPs to cover demand, at equal PTP Intensity to production

153,000

based on recruitment, attrition and retirement forecasts

149,800

-3,200
Net Loss of Experienced PTPs

= - 5,500
83,000
60% of total PTPs

77,500
52% of total PTPs

2011

2015 required

2015 Projections**

Projections vs. Requirements

2011

2015

Note: Source:

* Considering IEA production forecasts, Current Policies scenario for 2010-15: 2,25% GAGR ** 2010 workforce projected to 2015 based on: 1.4% Attrition; Company recruitment targets; Retirement rate at 20% for 55-59 age group, 90% for 60-64 age group, 100% for +65yr Excludes China / Excludes oilfield service companies SBC O&G HR Benchmark 2011; Company data, SBC Analysis
2012 Schlumberger Business Consulting. All Rights Reserved.

Mid-career recruitment is increasing


MID CAREER GLOBAL RECRUITMENT TARGETS Normalized, 2010-2013
200 180 Majors 160 140 120 100 80 International NOCs

Independents NOCs

2010

2011

2012e

2013e

Source:

SBC O&G HR Benchmarks 2010 & 2011. Identical panel of respondents


2012 Schlumberger Business Consulting. All Rights Reserved.

Many companies cannot find experienced people in their home country


WHAT IS THE ESTIMATED PROPORTION OF RECRUITMENT THAT CANNOT BE COMPLETED EVERY YEAR BECAUSE OF INSUFFICIENT HOME MARKET TALENT?
% range of unfilled positions 70% 60% 50% 40% 30% 20% 10% 0% FOR YOUNG GRADUATES
Source: SBC O&G HR Benchmark 2011
2012 Schlumberger Business Consulting. All Rights Reserved.

FOR MID CAREERS


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Attrition is increasing
2011 ANNUAL VOLUNTARY ATTRITION GEOSCIENCES AND PETROLEUM ENGINEERING
GEOSCIENTISTS PETROLEUM ENGINEERS 7.2% 5.8% 4.9% 4% 2.6% 2.6% 5.1% 3.5% 4.6% 3.9%
2010 2011

5% 4.2%

Independents

Majors

NOCs

Independents

Majors

NOCs

Source:

SBC O&G HR Benchmark 2011


2012 Schlumberger Business Consulting. All Rights Reserved.

Retirement age is increasing


AVERAGE RETIREMENT AGES PER REGION 2010 VS. 2011
identical sample of companies 58

57 58 58.5

EUROPE & CIS

57.5

58.5

NORTH AMERICA

55
2010 2011

56

ASIA

LATIN AMERICA

Note: Source:

Insufficient comparable data in Middle East and Africa SBC O&G HR Benchmark 2011; Company data
2012 Schlumberger Business Consulting. All Rights Reserved.

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Staffing issues have serious consequences on projects


WHAT ARE THE CONSEQUENCES OF STAFFING DIFFICULTIES?
% of respondents Western Independents
0% 100% 0%

Majors
100% 0%

NOCs
100%

Delay projects

44%

60%

71%

Take more risk because of tight staffing

67%

20%

57%

Increase non-operated assets

0%

0%

43%

Note: Source:

No companies have indicated that they abandon projects when facing staffing difficulties SBC O&G HR Benchmark 2011
2012 Schlumberger Business Consulting. All Rights Reserved.

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Our message: HR is the main driver for long term production growth
AGENDA E&P industry is going through a major transition with tensions raising everywhere. High growth companies have more technical people than others and pragmatic HR policies: no barriers to promotion, higher diversity, on the job training. Time to autonomy is a key indicator companies seek to reduce. Gender diversity is now mainstream, except for majors who struggle to increase women proportion in their workforce.

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2012 Schlumberger Business Consulting. All Rights Reserved.

Reserves and Operated Production are correlated with number of PTPs


QUALITY OF CORRELATIONS ANALYZED
All PTPs All Geoscientists Geologists Geophyscists Petrophysicists All Petroleum Engineers Strong (R2>0.9) Good (R2>0.8) Questionable (R2>0.7) No correlation (R2<0.7) Other Engineers Support Functions HR Staff HSE Staff
Source: SBC O&G HR Benchmark 2011
2012 Schlumberger Business Consulting. All Rights Reserved.

Operated Production

Reserves (1P)

Reported Production

Drilling Engineers Production Engineers Reservoir Engineers Completion Engineers

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High growth companies have more PTPs per unit of production (higher PTP intensity) than low growth ones, and proportionally more Geoscientists
PTP INTENSITIES AND AVERAGES SORTED BY GROWTH
Number of PTPs per unit of operated production

HIGH GROWTH COMPANIES

LOW GROWTH COMPANIES

Geosciences Petroleum Engineering


Y y

Average Op. Prod CAGR 06-10


Source: SBC O&G HR Benchmark 2011

4.8%

-0.5%
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2012 Schlumberger Business Consulting. All Rights Reserved.

High growth companies use technology to improve productivity of staff


HOW DO YOU MITIGATE PROJECT STAFFING DIFFICULTIES?
% of respondents High Growth Low Growth

57% 50% 50% 36% 27% 50% 36%

55%

Use virtual team technologies


Source: SBC O&G HR Benchmark 2011

Use productivity enhancing technologies

Outsource

Standardize projects to staff more juniors


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2012 Schlumberger Business Consulting. All Rights Reserved.

High growth companies have pragmatic approaches to HR


EXPATRIATES RECRUITMENT DO YOU INTEND TO BRING PROCESS CYCLE TIME BACK RETIREES?
Average months per peer group 4.0 3.2 2.6 3.4 76% % of respondents

% OF TIME SPENT PER TRAINING TYPE FOR JUNIOR PTPS?


Average % per respondents High Growth Low Growth 52%

38% 43%

17%

13%

Mid Careers - Mid Careers NATIONALS* EXPATRIATES


Note: Source:

High Growth

Low Growth

On-the-Job Training

Coaching

Process is understood from sourcing to acceptance * from companys home country SBC O&G HR Benchmark 2011
2012 Schlumberger Business Consulting. All Rights Reserved.

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High growth companies promote people faster and are more gender diverse
IS SENIORITY TAKEN INTO ACCOUNT TO REACH A POSITION OF AUTONOMY?
% of respondents

GENDER DIVERSITY AMONG PTP DISCIPLINES

Average % of females PTPs in total PTP Headcount High Growth Low Growth 27%

57% 19%

18% 29%

11%

High Growth

Low Growth

Geosciences

Petroleum Engineering

Source:

SBC O&G HR Benchmark 2011


2012 Schlumberger Business Consulting. All Rights Reserved.

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Our message: HR is the main driver for long term production growth
AGENDA E&P industry is going through a major transition with tensions raising everywhere. High growth companies have more technical people than others and pragmatic HR policies: no barriers to promotion, higher diversity, on the job training. Time to autonomy is a key indicator companies seek to reduce. Gender diversity is now mainstream, except for majors who struggle to increase women proportion in their workforce.

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2012 Schlumberger Business Consulting. All Rights Reserved.

The concept of Time to Autonomy, developed by SBC in 2006, is now a key marker of competency development effectiveness
WHAT IS THE MEASUREMENT CRITERIA USED TO ASSESS TRAINING EFFECTIVENESS?
% of respondents Short Time to Autonomy
0% 100% 0%

Long Time to Autonomy


100%

Time to reach autonomy

75%

47%

Technical Tests

33%

35%

Individual performance appraisal done by line

75%

71%

Note: Source:

no companies have indicated that they abandon projects when facing staffing difficulties SBC O&G HR Benchmark 2011
2012 Schlumberger Business Consulting. All Rights Reserved.

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Western Independents have the shortest time to autonomy


AVERAGE TIME TO AUTONOMY ACROSS DISCIPLINES
Number of years necessary to reach ability level Years to Autonomy
14 12 10 8 6 4 2 0
Time to autonomy is the time required for a company to drive PTPs to make non-standard, original technical decisions

Western Independents Majors International NOCs NOCs 11 11 8.2 6.7

Ability to

Execute assigned tasks

Choose among several standardized tasks

Make nonstandard, original technical decisions

Make personnel decisions (recruitment, transfer etc)


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Source:

SBC O&G HR Benchmark 2011


2012 Schlumberger Business Consulting. All Rights Reserved.

Our message: HR is the main driver for long term production growth
AGENDA E&P industry is going through a major transition with tensions raising everywhere. High growth companies have more technical people than others and pragmatic HR policies: no barriers to promotion, higher diversity, on the job training. Time to autonomy is a key indicator companies seek to reduce. Gender diversity is now mainstream, except for majors who struggle to increase women proportion in their workforce.

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2012 Schlumberger Business Consulting. All Rights Reserved.

Female ratio in universities can exceed 40% in certain regions, but it is still below 20% in North America
PROPORTION OF FEMALE IN TOTAL STUDENTS PTPS GRADUATING IN 2010 Bachelor, Master and PhD in Geosciences and Petroleum Engineering
50%

40%

30%

20%

10%

0%

Global

Asia

LAM

Europe

SEA and Australia

RussiaCaspian

MENA

NAM

Source: Data from universities. In Asia: China, Japan, Pakistan and Thailand . In Europe: Austria, France, Germany, Hungary, Italy, Netherlands, Norway, Turkey and United Kingdom. LAM: Argentina, Bolivia, Colombia, Mexico, Peru, Trinidad and Venezuela. SEA and Australia: Australia and Malaysia. Russia Caspian: Azerbaijan, Russian Federation. MENA: Egypt, Kuwait, Libya, Qatar and UAE. NAM: Canada and USA
2012 Schlumberger Business Consulting. All Rights Reserved.

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There are more women in Geosciences than Petroleum Engineering


STUDENTS IN GEOSCIENCES In percentage of women over total graduating in 2010
50%

STUDENTS IN PETROLEUM ENGINEERING In percentage of women over total graduating in 2010


50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0%

Source: Data from universities. In Asia: China, Japan, Pakistan and Thailand . In Europe: Austria, France, Germany, Hungary, Italy, Netherlands, Norway, Turkey and United Kingdom. LAM: Argentina, Bolivia, Colombia, Mexico, Peru, Trinidad and Venezuela. SEA and Australia: Australia and Malaysia. Russia Caspian: Azerbaijan, Russian Federation. MENA: Egypt, Kuwait, Libya, Qatar and UAE. NAM: Canada and USA
2012 Schlumberger Business Consulting. All Rights Reserved.

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Except Majors, companies are increasing women proportion


PROPORTION OF FEMALE IN O&G COMPANIES, 2006, 2010 & 2011 Identical sample of companies
40% 35% 30% 25% 20% 15% 10% 5% 0% GG PE
Independents

40% 35% 30% 25% 20% 15% 10% 5% 0%


2006

Majors

40% 35% 30% 25% 20% 15% 10% 5%

NOCs

GG
2010

PE
2011

0%

GG

PE

Source:

SBC O&G HR Benchmark 2011


2012 Schlumberger Business Consulting. All Rights Reserved.

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High growth companies are more gender diverse


FEMALES IN GEOSCIENCES
Average % of respondents

FEMALES IN PETROLEUM ENGINEERING


Average % of respondents

27%

18%

19% 11%

High Growth

Low Growth

High Growth

Low Growth

Source:

SBC O&G HR Benchmark 2011


2012 Schlumberger Business Consulting. All Rights Reserved.

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Conclusion: HR is the main driver for long term production growth

E&P industry is going through a major transition with tensions raising everywhere. High growth companies have more technical people than others and pragmatic HR policies: no barriers to promotion, higher diversity, on the job training. Time to autonomy is a key indicator companies seek to reduce. Gender diversity is now mainstream, except for majors who struggle to increase women proportion in their workforce.

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2012 Schlumberger Business Consulting. All Rights Reserved.