“Create some independence and diversity for yourself…”

All right Dave, tell us about your educational background and your work experience.

I have a B.Sc. in Applied Science in Geological Engineering from Queen's University (Kingston, Ontario) after which I decided to pursue graduate work. I went out to UBC in Vancouver, did a Master's Degree in Geophysics, and then made the decision in 1974 to accept a job with Chevron in Calgary.

Most of my original geology background was in mineral exploration. Queen's was a Hard Rock Geology School. During university summers I took jobs doing geological mapping in volcanic greenstone belts in the Canadian Shield in Northwestern Ontario.

My Master's thesis was in geochronology and I worked on metamorphic gneisses in the Shuswap Metamorphic Complex in Central B.C. I later acquired an MBA, specializing in Finance, from the University of Calgary.

I later acquired an MBA, specializing in Finance, from the University of Calgary.

How did you decide to pursue a career in geosciences, and why not anything else?

Good question. Why geology/ geological engineering? The way it works in most Engineering Schools in Canada is that the first year is a general year during which you decide what your specialty is going to be starting in Year 2. I was interested in two subjects – geology and physics – I like the discipline and the logic of physics and I like the uncertainty and the lack of precision of geology.

Very nicely put. So then, how did you make your way to UBC for your Master’s?

Well, “go west young man” was the mantra. I had actually been accepted in two other schools for Ph.D. programs – University of Toronto, and Cal-Tech; however, I wasn’t ready to make a decision about the Ph.D. option right away. The decision to go to UBC got me to the West Coast and it got me started in graduate work and I said, “Okay, I’ll try that out,” and then make a decision later on whether to go to Industry or stay in Academia.

Dave, how did you decide to pursue an MBA in Finance? Had you decided in your mind at the time that you would probably one day venture out on your own as a consultant or something like that?

No, not at all. I was with a major oil company and in the mid-1970’s when you joined a major oil company it was a different world. It was quite possible that you might stay with a large organization for your career. In my case my more entrepreneurial ventures happened later on (1990’s). At the time I started my MBA (1976) the decision was mostly for building career flexibility plus a keen interest in the subject material.

I have always been a geoscientist/ applied scientist but I like to combine that with practicality and usefulness, so I thought getting some background in economics/ finance would help me understand and frame how applied science could be practiced in a way that made sense from economic and financial points of view.

You joined Chevron in ‘74 and then stayed on until you decided to become a consultant. Obviously your background in geology and geophysics must have helped you. Would you say both are required to be a successful explorationist?

Oh, absolutely. Geophysics only makes sense when you transfer its implications into geology – part of the real world. Being a successful explorationist requires the integration of geophysics and geology. The detective work associated with the exploration field is a mixture of well-founded science, well-founded logic, and wellfounded art, together with questioning minds. I believe the combination of all is necessary to create a successful explorationist and / or exploration team.

What personal qualities do you think enabled you to achieve the professional status that you enjoy today? Was it hard work, ambition, or anything else?

I say this to everybody – every person that I hire – that having the skills to perform as a smart, intelligent individual is important. It is one of the boxes that I want to tick off when I hire someone. However, in my opinion, hard work and strong ethics are also very important and are absolutely the keys to being successful in one’s career. The willingness to work hard combined with the ability to work “smart” is a very strong combination.

Absolutely. Many geo-scientists, in Calgary and other places, once they have gained enough experience like to start working on their own. What are your views on being a consultant yourself? Do you think it is a good decision when you look back and how do you like your life as a geophysical consultant now?

I am a geophysical consultant and also a geological consultant and a business consultant. In the 1990’s I went out into the entrepreneurial world and started up my own businesses. I was midforties at the time. In retrospect, I sometimes wish that I had done it earlier. My background prior to this was working for a major oil company (Chevron) for 20+ years in Calgary and around the world. It was a wonderful training ground and Chevron was a great company.

The difference between consulting versus working as an employee in a large organization such as a major oil company is that in a large organization you are very inwardly focused in terms of the technical problems, organizational politics, issues and relationships whereas in the real external small business world you must be very outward looking. In the services business, such a consulting, it is all about helping your clients and working collaboratively to meet their needs and resolve their problems. Relationships and contacts are extremely important.

One of the things I’ve learned over the years is that the soft skills – relationships, psychology of person-to-person interactions, etc. – are much more important for success than the hard skills – the scientific/ technical skills. The technical skills are necessary, but it is the soft side skills, often learned through living, that help one be successful as a person and help one to be successful in business.

While at Chevron (~ 23 years) I got the opportunity to travel all over the world – worked in Canada, worked overseas in Indonesia, worked in the US at their Research Lab, worked in the Technology Centre – again wonderful people and wonderful organizations. Like many of the majors Chevron was struggling in terms of their projects in the Western Canada Sedimentary Basin in the mid ‘90s. I had some opportunities to go to places like Kazakhstan and Sudan. However my children were at ages where it wasn’t appropriate to go oversea, so I exited and ending up out on my own. At the time I said, “I am never going to work for somebody else again. I am going to work for myself.”

I started off doing management consulting. Management consulting is an art form whereby one uses all of one’s aggregate skills and experience as both a business person and experienced industry professional to assist clients solve problems/ issues that they have. I worked at it for about 2 years, but decided I wasn’t having enough fun. I then went back to my technical roots and got into technical geosciences/ exploration consulting. I started up GEOSEIS in 1997 with a couple of ex-Chevron colleagues and it is now in its 14th year today. We have a staff of 20 professionals.

Quite interestingly, GEOSEIS and Alconsult don’t have a single G&G project in Canada at the moment. We are in Calgary but our clients’ projects are all over the world. There is of course lots of opportunity for natural gas in Canada but in an environment of historically low gas prices activity is low. Right now a lot of companies are outward looking in terms of the international arena and oil opportunities.

What are some of the challenges one could face if one would venture out as a consultant? I know many of our experienced geophysicists in town would like to hear what you would say...

Well, first of all is the challenge of developing as a small business person. When you run your own business, you have to understand the fundamentals of, and management of, dollars-in-thedoor and dollars-out-the door. One has to learn and understand the basic principles of accounting, finance, and contractual agreements. One has to build that knowledge and be competent in doing that work. You can’t farm it out; you can get assistance with it, but you have to learn how to do it.

The next key skill is learning to network and build business relationships. It helps if you are an extrovert and if you enjoy meeting and talking to people. I always used to tell people that whenever it was slow at work, all I had to do is to take a stroll around the Plus 15 level and I would meet five or six people – I would come away with three lunch invitations and one job. So whenever business is slow, take a lunchtime stroll!

Calgary is a great place for that.

And in the services businesses, it is all about relationships and taking care of your clients. Sit in their shoes and look at the world from their prospective.

That’s very important, you are right. Tell me about Dave Birnie, the person, your habits, your likes or dislikes and all that.

I enjoy the outdoors. Traditionally I have enjoyed hiking and skiing. I have a place in Canmore which I get out to as much as I can. As I get older I am struggling a little bit with knees and arthritis and whatever. I am learning how to adapt, but maintaining some physical activity level is really important to me.

I really enjoy music. I am a singer, and I also play some musical instruments, so a certain amount of my life is devoted to music and singing. Throughout my life I have volunteered and done a lot of work with musical groups.

I also do a lot of traveling, both personal and business, all over the world.

Does that mean it is a passion?

Yes it has been. These days I tend to be a little bit more of a homebody for relaxation as I get enough travel all the time business-wise. I am also an avid reader. I can often read a book a week and I go to sleep at night by reading. So that’s a little bit about me.

Very nice, thank you. What have been some of your most memorable moments in your professional life? Also tell us about the successful landmarks in your geophysical career.

Some of my most memorable moments are about the journeys of exploration wells and prospects.

In the exploration business (R&D) we use a limited amount of available data and information to make logical deductions on behalf of our clients in order to give them the best advice and recommendations possible. A very high percentage of the time our general directional advice leading to decisionmaking is very good; however, we can be wrong with respect to specifics such as the outcomes of particular prospects or wells that are drilled. Anybody who is in this business is humble because throughout our careers each of us has been sprinkled with a handful of good successes; however, we also have a bunch of unsuccessful prospects (although the journey was enjoyable).

I have had some success on behalf of clients in India, Egypt, Indonesia, Canada, and the US where my clients have drilled successful wells. The more memorable events are exploration prospects that I just believed in with a passion, but had unsuccessful outcomes (“the ones that got away”). One particular project, a reef prospect here in Alberta comes to mind, and some international stuff.

What are your aspirations for the future now?

To live the next 25 years and keep my health, have some grandchildren, continue working for another 15 years, into my 70s and to have fun doing it and to contribute to my family and community in the process with all that happening.

Dave in your CV you mentioned that you like to get involved with special studies to try and do different things to get better data for interpretation and risk reduction. Tell us about some of these in terms of examples and how you do this.

In the international oil and gas business the first thing you have to do on behalf of your client is to build a data base. In Western Canada we have Government data bases and commercial data vendors who do a lot of that work for us.

In our business we sift through that data, manipulate it into information and then, with logic and deduction, build knowledge to help make decisions. It starts with the data. We build databases from a variety of public domain data, from data that’s purchased from commercial data providers or acquired from Governments, from academic journals, and of course from data acquired through our clients and our own collaborative professional activities.

From that data we do analysis and detective work to construct logical deductions and recommendations. We then tell stories. People sometimes ask me what I do for a living. Rather than telling them I am a geologist or geophysicist, I say instead that I am a “story teller”. Most times people believe the stories (sometimes they don’t). Often the stories make money for my clients (sometimes they don’t). It is wonderful fun to engage with people and to walk them through the logic of the story.

One of the things I like about being a consultant is it is your job to speak your mind and tell your client what you really think as a professional geoscientist, even if it is not the answer that they want. As somebody who is external to the organization it is easier to do this. One advises the client based on story of the data.

You also report to re-thinking technology strategies to add value to the upstream oil and gas. Could you elaborate on that for our readers please?

Technology strategies – as applied scientists what are each of us is trying to bring to the table? We, of course, bring to the table our specific areas of expertise in the geosciences.

How are we going to approach a problem today in 2012 vs. how we approached it five years ago or ten years ago? As you know in seismic business the rule of thumb is if the data is more than five years old, reprocess it; if it is more than ten years old, re-shoot it. I will tell my clients with 90% certainty that I can improve their seismic data and improve the geological information and knowledge that we can get out of their data by re-processing.

It does not mean we can solve all our clients’ questions and problems, but we can definitely make headway. You yourself are involved in the developing geophysics world and some of the leading edge things that are happening in reservoir geophysics. There are some really quite remarkable things we can do today. In the spring of 2012 what can we do better than we could do one year ago? In the services business I believe it is our responsibility every year to do things faster, better and cheaper for lower cost than we did a year ago. If we don’t do that we are not doing our job. We have to bring more to the table for less. Our clients expect that. Our clients deserve that in my opinion.

Very true. I agree with you when oil and gas prices are lower.

You know it has been a bit of a struggle since 2007 in the services business and we’ve all had to re-work our business models.

Be more aggressive in whatever we do and be as reasonable as possible because of the costs. All right, that’s good.

Dave you have worked on many international projects and to name a few areas you’ve worked in: Ukraine, Brazil, Middle East, Guyana, Cuba, India, Indonesia, etc. Could you please share with us your experiences in terms of the peculiarities of different projects in different areas and aspects that set them apart from the normal type of work that is done in Western Canada for example? What were some of the challenges that you were facing at the time of pursuing these projects?

In the international arena a challenge you are always pursuing is getting enough data. In particular, have you located the data in the right place on the ground (e.g., wells and seismic data)? This is a challenge everywhere I’ve worked internationally

Second challenge as we’ve covered earlier is actually building the data base. No one is giving you the data on a platter.

My teams work about half time on onshore projects, half time on offshore projects. For offshore projects I believe that we should take every seismic section from time to depth – not through depth migration but via velocity model building and depth stretching seismic. It’s wrong because we don’t know the velocity of the earth but it’s directionally correct. I like to build velocity models based on seismic velocity information, well data, models, etc. and then stretch seismic data to depth because the real world is in depth, not in time.

Another challenge in international projects is not having enough well and well log data to calibrate available seismic data. Think of the hundreds and thousands of wells that we have here in Western Canada. We are very privileged. In most other land basin areas outside North America the quantity and quality of well data is typically poor. We often must get log data digitized such that we can integrate it properly with the seismic.

Dave, you are an expert in exploration methodologies, exploration risk management and assessment, and exploration resource probabilistic modeling. Could you tell us about these? You have taught a number of courses on these topics and it should be easy to explain to the layperson in an easy way to grasp.

On every project that we want to do in the upstream oil and gas business, we have to explain the chance or probability of success; e.g., the geological chance of success. Geologic risk is one minus the chance of success, the chance that you will discover something.

Uncertainty represents the range of possible outcomes of an event such as drilling a well. A range of outcomes is possible if you drill a successful well. It has been the accepted practice since the mid 1990s to express uncertainty of outcome with probabilistic reserves or resource analysis. The term resource is used when you have not yet discovered hydrocarbons. We express our opinion regarding outcomes in the form of probabilistic modeling results. The methodologies were pioneered in terms of decision theory in many of the large major oil companies. The approach is now widely utilized industry-wide.

Risk assessments and size-of-the-prize modeling are important deliverables on every project we do everywhere around the world. Their usefulness is in helping to guide good decisions. One typically has a portfolio of opportunities – ready to drill prospects, exploration leads, and some simply good ideas in our heads. We try to make the best decisions possible by understanding the background to chance of success, uncertainty of outcome, and “project upside”.

What is your take on the unconventional sources of hydrocarbons such as heavy oil, shale gas, light gas, gas hydrates? I think it is an obvious question to ask. Do you think they really hold the future and how soon do you think we will get there?

Well we are there now in the sense that we are all working in the “energy business”. The role of technical industry professionals is to find the cleanest, most cost effective sources of energy at the lowest cost of supply for a world that needs energy.

We are now entering the age of gas in terms of the foreseeable future as natural gas is most available cleanest hydrocarbon fuel. When people ask me what I do for a living I say, in addition to telling stories, “I help find energy for people around the world so they can do the activities that they need to do.”

We are working to find as much of the cheapest energy that we can for them and the cleanest that we can for them. The cleanest of the hydrocarbon fuels is natural gas. It beats bitumen, heavy oil and coal. Given the recent nuclear accident that happened in Japan we are seeing areas of the world that are now canceling out nuclear as part of their near-term energy future (for example, Europe).

We know that there is still a lot of natural gas being found worldwide and while people in our business deplore the current low prices for gas here in Alberta, it has some great benefits for consumers. Our job, on the supply side, is to lower the cost of supply. That means that we are being successful. I remember when John Masters of Canadian Hunter explained his resource triangle, where at the peak of the triangle one found the best quality, lowest cost gas and as you went down the triangle you went to lower quality and higher cost of supply resource.

The absolutely insatiable need and desire of the world for energy requires us to exploit available resources in an intelligent, environmentally acceptable cost effective way, using the best quality, people, ideas and technology to bring that gas (energy) to the table for every one of us, for our kids, for society for the future. That’s not just for the developed economies, that’s for everybody on the planet.

Absolutely, even though the cost of getting gas cleaner and environmentally friendly is high, and the price of gas is currently low.

One of the things that has to change in terms of project economics is that we need to factor in on the cost side, the cost of pollution and the cost of greenhouse gas emissions. We need to factor these into the cost side so that society in general in their economic decision making includes these “external factors” as an integral part of their decision process.

That does not happen and doesn’t look as if it will be happening any time soon.

Well, there are certainly a lot of bright, intelligent minds working on that problem. Unfortunately, to make progress there needs to be political will in terms of agreements across countries to achieve concerted action and a level playing field. It is very difficult for one country to do something and to have the next door neighbor do something that’s inconsistent. We have a few heroic people taking tentative first steps. The question is whether we can muster the political will globally to make progress.

That’s right; you put it in a very nice diplomatic way. Dave what are your other interests?

Well I have to tell you that everything I have just talked about keeps me going 24 hours a day, 7 days a week. I mean other than trying to be a good parent and a good husband to my wife, and to support my family. Running your own businesses these days is not a nine to five job. You work seven days a week, twenty four hours a day. Because half of my clients are on the other side of the world, I often tell my staff, you have a choice of working the day shift, the night shift or the week-end shift or you can work all three like I do.

I completely understand because if you have a meeting that goes on the other side of the globe, you have to be available to all those meeting.

Absolutely. So I routinely have web meetings at midnight Calgary time with web meeting tools and video. It is the way business is done these days.

Dave, I notice that you have not been actively participating in professional society activities. I know what your answer will be, but I am still going to ask you this! Is there any particular reason for doing this, as I do know that there are other consultants who are active in their professional societies?

Well, I am a Professional Geophysicist. I am also a geologist. I am a member of the CSEG, a member of CSPG and a member of APPEGA. The activities that I have participated in during the last five to ten years are publishing papers at conferences, and the international section of the CSPG.

I subscribe to the inference behind your question that it is our responsibility as members of our professions to contribute back either to our profession directly, to our community, or to the new entrants in our profession.

My major professional activity for the last ten years, and the one that I absolutely enjoy, is mentoring young people. In my company I have deliberately targeted a number of young people in their 20s to 30s who are early career entrants to the business. It is so much fun for somebody who is in the last 25% of their career to be working with somebody in their first 25% of their career, working arm-to-arm, mentoring and teaching them. I find it to be a wonderful symbiotic relationship and that’s where I have chosen to spend my professional hours.

So you are contributing in your own way?

I am trying; it doesn’t mean I couldn’t do more.

Dave, what would be your message to young entrants who have just taken geophysics as their profession?

Find and utilize mentors. Learn as much as you can from him/ her. In fact you will find, over your career, you will have multiple mentors.

A mentor doesn’t always have to be older than you, but as a young person they generally will be. At 30 years plus of experience we also have mentors, some of which are younger than us – such as our kids. They are good mentors.

In our business our science is still expanding and developing and achieving breakthroughs of new ideas. Occasionally there is a disruptive step function change; more often it is a gradual evolution of our science. The geophysics profession is an investigative, applied science profession. If you are a curious person, it is a wonderful, wonderful profession.

Now, I was told that when I started this profession in 1975 that within 20- 40 years most of the people in the geosciences would not be looking for oil and gas. Rather they would be looking for clean water. That’s still a real area for the future – the issues of clean water, water distribution and climate change. How do you define the economics of that? I don’t know.

Somebody once told me that a litre of water even today costs more than a litre of gasoline. Certainly if you go to the grocery store and buy it only as a litre that might be true, but if you buy any large quantities that’s not true.

In the Middle East it is true.

The world population issue is not going away. It scares the hell out of me how fast the world’s population is growing and what that population is doing to our planet. I am really concerned about that. I expect my kids and grandkids to say, “Look at the world you left us and what was your responsibility in helping leave that?” You know that is a tough question to answer.

Certainly you know I fully agree with you. Okay, one last question, do you think in the set of questions I asked you I missed out on any questions that you expected me to ask?

Not really, the only issue that I think might be of interest to members of the Society is creating flexibility for individual futures. Have a Plan B. Everybody needs a Plan B in case you are cast out as an employee. Create some independence and diversity for yourself as an option to the employee situation if it does not work out for you. As an employee you are placing yourself in the hands of someone else. Often those are very good hands where there are considerate and careful employers. However our industry in the last twenty years has also been heartless and cruel in the way it has thrown off long-time, loyal, hard working individuals and thrown them out into the cold world.

Always. That’s good. Well David, thank you very much for giving us this time and this opportunity to sit down and chat with you. I appreciate that.

It was a wonderful time and thank you for giving me the opportunity.