John Dorffeld T’10 is a commercial operations representative at Chevron, Inc. in the MCBU Delaware Basin. John was kind enough to answer five of our questions.
Tuck prepared me for my energy career in two main areas:
First by fostering a collaborative working environment with diverse groups of high-performing individuals who make decisions and achieve results. The Tuck environment and approach to learning closely mirrors the environment at Chevron—cross-functional work teams operating in a decentralized corporate structure allowing business units and projects to compete for capital. As a truly global business, Chevron provided me opportunities to contribute in this manner across the globe, including two years living in Australia and the UK with teammates from all over the world.
Second, Tuck’s curriculum—including coursework on Decision Science, both foundation and elective, and Negotiations—prepared me to be able to quickly contribute to the business. Chevron is a keen employer of decision science and probabilistic analysis when valuing everything from multibillion dollar projects down to sub-million dollar deals—expertise and fluency in the language of decision science is crucial. Negotiations is both art and science. Within my current role supporting the prolific Delaware Basin unconventional oil and natural gas play in West Texas and East New Mexico, I have concurrent negotiations of anywhere from three to eight contracts at one time with daily counterparty engagement at a variety of complex circumstances and leverage positions. The negotiations training provided at Tuck was invaluable to begin developing my own personal style and methods.
The Chevron Business and Commercial MBA program provided me a truly unique experience. As a new hire transitioning careers from the U.S. Army, I wanted a development program that delivered a variety of functional experiences and international geographic opportunities. The Chevron program met these expectations and more. I rotated through four different job functions in three locations, commencing in Houston with relocation to Aberdeen, UK, and on to Perth, Australia (with two rotations in Perth). The rotations lasted between six and nine months, during which I was exposed to deepwater oil developments, probabilistic economic modeling on a multibillion dollar major capital project, and liquefied natural gas sales to international customers.
I think the general consensus in the industry is that we reached the bottom of this particular price cycle and we are now on a gentle recovery in oil prices. The expectation in oil is flat to moderate price growth at a modest pace over the next few years. No one is betting on the rapid return to $100+ oil, and companies like Chevron are making their investments and capital allocations accordingly.
My understanding of gas prices in the U.S. is they are fairly low volatility, so I would speculate what you see is what you are going to get for some time. International gas prices are generally higher than the U.S., but have different costs of production due to supply and demand dynamics as well as any associated transportation costs (Liquefied Natural Gas by tanker in Asia and Russian pipeline gas in Europe)—so a similar low volatility scenario (excepting seasonality) is expected.
Bottom line for Chevron is we concentrate on maximizing production that provides industry leading returns—this translates into consistent discipline to lower capex and opex, as well as a relentless pursuit of operational excellence and production efficiencies. Another key progress area is the strides taken in technology to unlock previous undevelopable resources and bring them to market. To that end Chevron operates a small internal venture capital type organization (Chevron Tech Ventures) that assesses emerging technologies and invests in those where they believe there is potential.
Chevron is a truly global company, with assets and employees across the world and experience working with all types of governments. Like any administration in the U.S., I would expect both benefits and challenges based on policy and regulation adjustments. Chevron will continue to focus on what the company does best—developing the energy that enables human progress.
The oil and gas industry just exited (hopefully) a bearish commodity market. As with any commodity-based industry, this compelled a period of opex and capex reduction as well as many reductions in employment opportunities. Now that I feel the “bounce” has occurred, I am excited to see a modest reinvigoration of hiring (including recruiting for the Chevron Business and Commercial MBA program). Additionally, I am able to work in the Chevron focus area of the Permian Basin. Once thought to be a tired asset base, it is now the next frontier of oil and gas production and the investment target for generous allocations of capital by Chevron and other companies. It’s a good time to enter the oil and gas industry, and a great time to be on board with Chevron.
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