Oil and Gas Maths Test

According to this article in the Daily Telegraph (H/T Tim Worstall), Williams F1 give potential employees a basic maths test and a lot of them are failing.

This is a remarkable coincidence, because for the past few months I have been part of a joint industry committee comprising  several major oil companies which was tasked with coming up with a test to determine if potential employees are able to cope with the type of maths problems they can typically expect to encounter in the oil and gas industry.  The test we came up with is undergoing final approval as we speak, but I have been authorised to offer a sneak preview to my readers.  The test questions are below.

Q1. You are an Engineering Manager (staff, salaried) working in the concept phase of a major LNG project.  Express as a fraction your salary divided by that of your Lead Process Engineer (contractor, day-rate).

Q2. If:

  1. n is the number of change orders your construction contractor submits;
  2. n-2,289 is the number of change orders which are entirely without merit; and
  3. q is the average value of each change order;


  1. How late your project will be if you don’t pay.
  2. How much you will be fleeced if you do.

Q3. Estimate to the nearest $10k how much a 45-year old expat loses in the divorce settlement following a lengthy assignment to Venezuela.  Assume 3 kids under 16, and wifey gets the house in the UK.

Q4. An HSE department in an oil company needs to procure 30kg of hard-hat stickers.  If 7 departmental heads, 4 divisional managers, and 2 company directors are required to sign the purchase request form, how many lives will be saved this year?

Q5. You are working for a major oil company based in Paris, France.  How long is your lunch break:

  1. 1 hour?
  2. 2 hours?
  3. As long as you like?

Q6. A newcomer of Job Group X is sent on overseas assignment.  Express as a function of X the minimum acceptable Job Group of the husband of his wife’s new best friend.

Q7. You have 7 direct reports (staff), 3 of whom are expatriates; and you have 11 direct reports (contractors) 3 of whom are locals; and you have an overall organisation of 42 people, 6 of whom are secondees from a contractor, 1 of whom is a student intern, and they are all drunk.  What is the probability that you are in Russia?

Q8.  An employee is granted 3 economy class flights per year for his annual vacation allowance, each worth $1,762.  Show that by wangling spurious business trips on the back-end of half of his holidays the employee can finish his 3-year assignment ahead to the tune of $1,284.43.

Q9.  You are working for a major oil company in Houston, Texas.  How many alcoholic drinks are you allowed at the annual staff bash:

  1. 0?
  2. Zero?
  3. None?

Q10. If a Project Director decrees that day-rate contractors actually have to come in on Saturdays  in order to get paid, how much money does a contractor subsequently lose over the course of a year if he fails to show up on 63% of Saturdays, expressed as a percentage of his previous annual take-home pay?

Q11. A Senior Piping Engineer working on a major project has 12 years experience, but doesn’t know the difference between a flange and an elbow.  Estimate the probability that the work is taking place in Nigeria.

Q12. Demonstrate, using practical methods, that shooting HR personnel raises productivity by 42.743% across the board.

Q13. You are in a meeting at a major oil company based in The Hague, Netherlands.  The chances of somebody saying something sensible are:

  1. 0%?
  2. 2%?
  3. 2.5%?

Q14. Given the size of apartment an employee of Job Group Y is entitled to is 140m2, and the cost of a cleaner works out at $12/ m2/hour, calculate whether it is worth said employee ordering his nanny to clean the apartment for 25% of her time at $62 per day assuming he has 3 obnoxious brats and a wife who does fuck all.

Q15. Local content laws in Country Z dictate that your project must contain 90% locals regardless of ability.  Assuming one third of those subsequently employed were until last week working on a farm or in the army, and the remainder are related to those doing the recruiting, what productivity factor can be expected during the engineering and construction of a highly complex industrial facility? Answer should be expressed as a negative.


Unearned Wealth

A recent post by Richard Murphy, a left-wing former accountant who acts as a mouthpiece on tax issues in the UK, says:

We were all motivated by a concern for those in the poorest countries of the world who have never seen the benefit of the oil, gas, minerals and timber that their countries export. Some clearly want to keep it that way.

It is a common theme amongst the political left that citizens – or rather, governments – of countries which export natural resources should be the main beneficiaries of any subsequent wealth, as opposed to the companies (and their shareholders) involved in doing the actual work.

Now, consider a case whereby the great-grandson of a Victorian industrialist finds himself sole heir to a run-down but huge residential building in a nice area of London.  He rents it out to some people, mostly immigrants and students, who work in the city doing menial jobs, and who are attracted by the relatively low rents due to the place being badly in need of repair.  Over the course of 2-3 years, the landlord (who up until the time of his inheritance was skint and living in a mate’s spare room smoking weed and playing Playstation all day) collects enough cash to refurbish his property to a higher standard.  At this point he whacks up the rent thus putting it beyond the means of his current tenants, and rents his place out to high-earners who work in the City.  For the next 20 years, our landlord becomes astonishingly wealthy as a result of his rental incomes.

So, how many people on the political left would consider the landlord’s wealth to be “unearned” and therefore subject to hefty taxes?  And how many would consider his behaviour to be parasitical on the hard-working folk who effectively paid for him to refurbish his property?  A cursory glance at contemporary political debate, in which the terms “unearned wealth” and “mansion taxes” have become commonplace, will give you the answers.

But let’s compare our landlord with the government of a country which sits on a sizeable mineral wealth which it has no idea how to extract.  For hundreds of years this wealth remains unrealised as it sits beneath the ground, whilst the people living above it barely know it exists.  Then some foreigners turn up and spend years (sometimes decades), millions if not billions of dollars, and the lives of thousands of individuals working in pretty dire conditions to figure out how to extract this resource and make it worth something.  Eventually these efforts pay off, and the foreigners start making some money.  Thus far, the locals have contributed next to nothing.  So what share of the proceeds are they entitled to?

According to the likes of Richard Murphy, they are entitled to most of it.  After all, they happened to be born sitting on top of an oilfield.  Yet the same justification is not applied to our fortunate heir in the example I gave above.  He is exploiting the workers and reaping the rewards of unearned wealth, whereas the governments of oil exporting countries are reaping the rewards of what is theirs by right.

The two positions are somewhat inconsistent, aren’t they?