Foreign investors play large role in U.S. shale industry

April 8, 2013

By PennEnergy Editorial Staff 

Source: U.S. Energy Information Administration

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In early 2013, Sinochem, a Chinese company, entered into a $1.7 billion joint venture with Pioneer Natural Resources to acquire a stake in the Wolfcamp Shale play in West Texas. This investment highlights a renewed trend toward foreign joint ventures. Since 2008, foreign companies have entered into 21 joint ventures with U.S. acreage holders and operators, investing more than $26 billion in tight oil and shale gas plays.

Investment in shale plays in the United States totaled $133.7 billion between 2008 and 2012, as part of 73 deals. Joint ventures by foreign companies accounted for 20% of these investments. The rest of the investments were either part of outright acquisitions—such as the Australian BHP Billiton oil company's acquisition of Petrohawk Energy Corp.—or were joint ventures among American companies (such as Hess and Noble Energy with Consol Energy) and financial institutions.

Most of the foreign investment in these joint ventures involved buying a percentage of the host company's shale play acreages through an upfront cash payment with a commitment to cover a portion of the drilling cost. Foreign investors in joint ventures pay upfront cash and commit to cover the cost of drilling extra wells within an agreed-upon time frame, usually between 2 to 10 years. Both U.S. and foreign companies benefit from these deals. U.S. operators get financial support, while foreign companies gain experience in horizontal drilling and hydraulic fracturing that may be transferable to other regions. Plus, foreign companies can operate in a stable market with a sound legal system and low political risk. In addition, exploration and development opportunities are decreasing in much of the rest of the world. While foreign companies may pay sizable initial costs through joint ventures, these deals can be considered a cost of entry to the development of hydrocarbons through the latest technology.

Most of the recent joint venture deals with foreign companies shifted from the dry natural gas plays to more liquids-rich areas such as the Eagle Ford, Utica, and Wolfcamp—a trend similar to domestic operations. All shale plays contain some liquids, but those with a higher liquid-to-gas ratio are more attractive because of the higher value of hydrocarbons that have crude oil and petroleum liquids in addition to natural gas.

http://www.pennenergy.com/articles/pennenergy/2013/04/foreign-investors-play-large-role-in-u-s--shale-industry.html?cmpid=EnlWeeklyPetroApril122013

Men, Women, and Status in Negotiations

EDITED BY PON_STAFF ON MARCH 21ST, 2013 / BUSINESS NEGOTIATIONS

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A growing body of research suggests that status concerns vary depending on the gender of interested parties.

First, men tend to care more about status than women do. Using a university sponsored fundraising campaign, researchers Bruno S. Frey and Stephan Meier of the University of Zurich examined how social-comparison information affected contribution rates.

• Male students who learned that a high percentage of students had contributed to the campaign were more likely to make a contribution than were female students who received the same information.

In the context of negotiation, professors John Rizzo of Stony Brook University and Richard Zeckhauser of Harvard University asked a group of young physicians about their reference groups and salary aspirations.

• Male physicians compared themselves to reference groups that earned higher salaries than the ones female physicians selected. 
• In addition, men’s salary reference points were more indicative than women’s of how much they earned later.
• Finally, women tend to compare themselves to particular individuals whom they know, while men tend to assess themselves according to information about typical behavior.

For this reason, when negotiating, consider offering different social comparison information to men and women. You might tell a male prospective hire that you’re offering him more than you’ll give others with his qualifications (assuming that is true).

When negotiating with a female prospect, you might be more specific:

“We recently interviewed someone similar to you, a Kellogg MBA with several years of consulting experience. To signal how much we want you to work for us, we’re offering you more than we offered her.”

http://www.pon.harvard.edu/?p=34147/?mqsc=E3486922&utm_source=WhatCountsEmail&utm_medium=PON%20Harvard+Negotiation%20Insider%20Tuesday&utm_campaign=Negotiation_Insider_03262013

To Improve Your Negotiation Skills, Learn from a Pro

EDITED BY KEITH LUTZ ON MARCH 26TH, 2013 / NEGOTIATION SKILLS

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On February 16, in the midst of the National Basketball Association’s (NBA) All-Star weekend, members of the National Basketball Players Association (NBPA) unanimously voted to oust Billy Hunter as the union’s executive director.

“This is our union and we have taken it back,” National Basketball Players Association president Derek Fisher said, as reported by ESPN.com. Fisher said the union had been “divided, misled, [and] misinformed,” by its leader. Hunter hinted in a statement that he might contest his firing in court.

As the union’s leader since 1996, Hunter negotiated three collective bargaining agreements for NBA players, contributing to raising their average salaries to more than $5 million, the highest in team sports.

Divided Union

Conflicts between Fisher and Hunter divided union members during the 2011 NBA lockout. According to ESPN.com, “agents didn’t like [Hunter], questioning his bargaining strategies, and they were frustrated they didn’t have a bigger role in his union.”

After Hunter was accused of numerous indiscretions, Fisher pushed for a review of him. In its review, an independent law firm criticized Hunter for various conflicts of interests and poor decisions, such as hiring family members and friends and billing the NBPA for questionable travel and gift expenses. The review did not find Hunter guilty of any criminal activity, but three government investigations of Hunter are ongoing.

After the review was released, the members of the NBPA put Hunter on a leave of absence. About 35 NBA players attended the union committee’s annual meeting in February to discuss Hunter’s future.

Hunter’s Dismissal

NBA superstar LeBron James and longtime player Jerry Stackhouse reportedly took the lead in arguing for Hunter’s dismissal, according to the New York Times. James’s involvement was unusual: league superstars rarely get involved in the nitty gritty of labor negotiations and union management.

James “practically cross-examined the lawyers to prepared the report on Hunter,” the Times reports. And he and Stackhouse demanded explanations from committee members who previously had sided with Hunter rather than Fisher.

NBA players widely respect James for his business savvy and interpersonal skills. So it was not surprising, given James’s forceful arguments against Hunter, that the committee voted unanimously to release Hunter from his duties.

The situation speaks to the power of convincing influential parties to lead important negotiations. One well-respected and admired leader may be uniquely posited to wrap up a negotiation that took many behind-the-scenes players to engineer.

http://www.pon.harvard.edu/?p=34268/?mqsc=E3486922&utm_source=WhatCountsEmail&utm_medium=PON%20Harvard+Negotiation%20Insider%20Tuesday&utm_campaign=Negotiation_Insider_03262013

Report: World Industrial Robot Demand Up 38 Percent

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Ann R. Thryft, Senior Technical Editor, Materials & Assembly
2/4/2013   10 comments

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The International Federation of Robotics reports that global sales of industrial robots increased by a whopping 38 percent in 2011 over 2010. In this blog, we'll look at some of the results of the IRF's" World Robotics: Industrial Robots 2012" report. In a later blog, we'll examine the IRF's report on service robots, "World Robotics: Service Robots 2012."

Although the largest users of industrial robots are Japan and Korea, the biggest increases in 2011 occurred elsewhere. For example, shipments to Germany grew by 39 percent, to the US by 43 percent, to China by 51 percent, to Canada by 72 percent, and to Brazil by 125 percent. Robot sales increased in the Americas overall by 53 percent, compared to Europe at 43 percent, and to Asia at 27 percent.

Like a similar study we reported on from The Freedonia Group, the IRF's report shows that the two largest users of industrial robots are the automotive manufacturing sector, followed by electrical/electronics manufacturing. These two sectors are also the ones that the IRF expects to continue driving growth in industrial robot sales during 2012.

The International Federation of Robotics reports that global sales of industrial robots increased by 38 percent in 2011 over 2010. Although Asia is the largest regional user, the biggest increases happened in the Americas.
(Source: International Federation of Robotics)

The biggest increase in a sector occurred in automotive, at 55 percent, but the second biggest was a 54 percent jump in the metals and machinery industry. Automotive can be expected from, among other things, the fact that processes as complex as the placement of composite fibers is being automated, as we reported previously. But the increase in the metals and machinery category is intriguing.

Between 2013 and 2015, the report says the electrical/electronics manufacturing sector will continue to increase its use of robots. That also makes sense, since this was one of the earliest manufacturing sectors to become automated. During this time period, although automotive manufacturing will continue to be the main sector that comes up with new robotics technology, it will experience what the IRF calls a cyclic decrease in robotics investment in 2013 and 2014. The previous decrease in this cycle happened between 2006 and 2009, during the global economic downturn.

China's increase in the use of industrial robotics is exceptional. The IRF report said China is on track to become the biggest user of robotics worldwide, and it's only a matter of when. This nation's installations of industrial robots quadrupled between 2006 and 2011, and grew every year except during 2009.

The IRF also predicts that, between 2013 and 2015, industrial robots will get lighter and more energy-efficient, and will be better able to collaborate with humans. Industrial robots will also become easier to integrate into existing manufacturing systems. It expects an annual growth rate of about 5 percent worldwide for industrial robots, which is close to Freedonia's predicted growth rate of 6 percent per year through 2016.

http://www.designnews.com/author.asp?section_id=1386&doc_id=258342