Bureau of Economic Geology, The University of Texas at Austin (www.beg.utexas.edu).
AAPG Annual Convention, Houston, Texas, April 9–12, 2006
The Future Lies in Talent and We Must Act Now
The major international oil companies (IOCs) face a significant dilemma. Their greatest assets—reserves, technology, and talent—are drying up.
In terms of reserves, the IOCs combined own only a few percent of the world’s conventional oil reserves; national oil companies own well over 90%. This helps explain why many IOCs have been merging; too many companies, too few accessible reserves. In order to replace reserves, IOCs are forced to explore on Wall Street. Wall Street has become a mature province.
There was a time when the IOCs could offer technology to the world. That, also, is changing. In part because of ever-greater pressure from Wall Street to focus on short-term performance, investment in private sector research has been greatly reduced. Research labs have closed. Service companies today account for an ever-greater percentage of the research and technology investment.
Finally, there is talent. Prior to 1973, when oil and natural gas prices were stable, enrollments in science and engineering programs were stable. Students saw energy as a viable career option. Following the supply embargo of 1973, demand for talent was fierce. The industry overreacted, markets overreacted, and colleges and universities overreacted. What goes up must come down. From 1982 through 1999, the industry and markets overreacted in the opposite direction, and universities followed suit. Jobs were lost, research labs closed, student enrollments in geoscience and engineering plummeted to 40-year lows and many US-based resource engineering and geoscience departments closed their doors. More importantly, in US Schools, an ever-increasing percentage of student enrollments are non-US.
Today, National Oil companies from Latin America, the Middle East and the Far East are approaching US schools with great passion to put partnership programs into place to educate their students in the US and return those students home.