Consulting Dollars and Sense

Geoscientists without Jobs, Part Six

“Are you STILL interested in geoscience jobs in Houston, Paul?” I get this email once a week from one of many job search sites I frequented over the last year. In that time, the number of open full-time jobs in the oil business has hovered just north of zero. While oil companies are still advertising intern positions (although one wonders who is left to mentor them?), those of us with experience wanting in the game have to do so under the banner of consultancy. If perusing the biographies of geoscientists on LinkedIn is any indication, the old trope about “consultant” being a euphemism for “unemployed” resonates with uncomfortable familiarity.

There are countless books, seminars and courses on starting your own business and defining your unique value proposition; the reader is encouraged to determine his or her own course as a consultant. On offer here are some practical guidelines for consultants about money; mainly, what to charge, tax implications, and getting paid in a timely fashion. (I’m neither an accountant nor a lawyer, so I disclaim all advice here. These are lessons learned from experience, and you should seek the advice of a professional before putting your skin in the game.)

It is nearly a truism that first-time consultants do not understand what they should charge r their time. If you’ve never been in charge of budgets and hiring, you may be surprised by what it costs a company to employ someone, and therefore what makes a consultant an attractive option to a potential client. If you’re employed in the US and want to know your fully-loaded cost, a good rule of thumb is to double your salary. A full-time US employee works 2,000 hours in a year, so your cost per hour is a simple calculation. Charging much higher as a consultant reduces your odds of securing a contract unless you have unique skills that command a premium. With over 70,000 oil and gas professionals on the streets in Houston alone, uniqueness is unlikely. Charging much less carries risks, too. Once you find out that actually billing 2,000 hours a year is a bridge too far and you’ve averaged out the feast-or-famine cycles of consulting, your annual income may not be as impressive as your hourly rate might initially lead you to believe it should be.

Once you set a rate, you have to stick with it. Charging different rates to different customers will cause trouble. Aside from the reputational issue, you create an additional ethical problem for yourself by creating an incentive to bill hours to one client over another. There are exceptions to the rule, though; if someone is willing to engage you for extended periods (a month or more), it is customary to discount your hourly or daily rates.

Taxes are also markedly different, and include such surprises as the so-called “self-employment tax”. As of 2016, the IRS codes state a self-employed person will pay an additional 15.3% on your first $181,000 of gross income in addition to the customary income taxes you pay as someone else’s employee. Since you have to pay estimated taxes on a quarterly basis as well, you need to keep enough on hand to cover those payments every 90 days to avoid costly penalties.  

Unlike employment where you get a paycheck every 14 or 15 days, you won’t get paid until you send your clients an invoice. If you’re not familiar with terms like “net-30”, be prepared to wait for your money. Payment terms and timelines should be included in any contracts. Keep time sheets, even if the client does not request them from you, so you have an auditable trail of your time and costs for a project. Keep track of all your costs and receipts; if the client is not willing to cover those expenses, you may be able to deduct them on your taxes. 

If you contract with companies based in your own country, your path to resolving contract disputes is well-established. If you sign a contract with a foreign entity that dictates legal actions must be filed in their home country’s court system, you are at a disadvantage. Since the most likely dispute you will encounter is non-payment, one way to mitigate this risk is to ask for a retainer for some portion of the contract. If your client routinely deals with contractors, this will not be an unusual nor unreasonable request. If the client is unwilling to consider this, take that as a red flag. You then have to weigh the risks of waiting months to be paid or possibly not at all. 

Remember your consulting contracts are, in fact, legal contracts. Your clients are bound to pay you, but you are also bound to deliver on your work. When you’re a struggling consultant, it is tempting to take any work offered, even if it exceeds your skills. Remember your reputation is the coin of the geoscience realm. From the last column, readers may recall the reputational benefit of altruism by referring potential clients to more qualified candidates. When one factors in the legal, financial and reputational risks, discretion is also the better part of contract work. Stepping outside your comfort zone is good for growth, but leaping off a cliff in pursuit of your contracting quarry may leave you feeling like Wile E. Coyote in that moment before gravity kicks in.

Reciprocity, Altruism and the Search for Work

Geoscientists without Jobs, Part Five

In a previous edition of this column, I discussed strategies for growing one’s network. While it is necessary to expand one’s network to prosper, maintaining the network is the more important and difficult task, especially if you wish to remain in good standing within it. There will come a time when you need your network (as any unemployed professional will tell you) more than it would appear to need you. How your network responds will be largely determined by your actions as they relate to two basic moral principles: reciprocity and altruism. Most have an implicit understanding of these concepts, but taking the time to think about them explicitly in the context of the job seeker (whether you’re a consultant or someone seeking full-time employment) is a useful exercise. You cannot control someone else’s behavior or judgment, but you can model the behaviors you wish to see in your network and try to create positive feedback by doing so.

Most geophysicists know the term reciprocity as it applies to seismic experiments, but the relevant usage here is from moral philosophy. In Western societies, we call it the “Golden Rule”, and it is axiomatic that we should treat others the way we wish to be treated. We also expect people to help us when we are in need without apparent or immediate benefit to themselves. This is altruism.

I’m sure that each of us can cite numerous examples of fruitless efforts to make connections and manage our careers: emails and phone calls that never get answered, job interviews where you never hear from them again, or that headhunter who mysteriously disappears after three phone calls. While we are not always treated as we wish to be treated by HR personnel, recruiters, hiring managers, potential clients, or even our friends and colleagues, the only choice we have is to act as though we are.

After setting up a website for my consulting business, I have received a steady stream of inquiries and résumés targeting non-existent vacancies. Because the percentage of people who respond to my own inquiries is always lower than I hope, I have empathy for anyone who makes the effort to contact me. I know too well what it’s like to be on the other end of that conversation, and I know the effort to respond is minimal. Even if the response is not positive or encouraging, I always respond. If you don’t take any other lessons from my columns, please take this one: any response is better than none. Your time is not more valuable than anyone else’s.

Being altruistic as a job seeker is often a harder proposition because it can seem counter-intuitive. Sometimes, the best way to respond to a job opportunity is to decline. In one case, I was asked if I could perform a task that was well outside of my particular skill set. Being a bit desperate for the work, I seriously considered how I could study up in my “spare” time (a laughable notion to someone trying to grow a consulting business) and fake my way through it. I quickly decided to decline the work and suggested another consultant who I knew was better qualified. One does not have to believe in karma to realize that my value in the network grows by acting altruistically in this regard: one person gets a better result, another person gets more work, and they both can point to me as the enabler of that. This benefit far outweighs the risk of reputation damage likely to occur by me attempting that work myself. I may not ever derive any further benefit from this interaction, but I would rather live in a world where such behavior might not be rewarded than to live in one devoid of this possibility. 

In some fields (far outside the oil business), I have friends and family members who built careers by responding to job postings and never having known someone on the inside who could refer them to a hiring manager. The oil business does not work this way, so building a career in this business depends on your ability to grow and maintain a network of people with whom you can collaborate. I have no idea how long this downturn will last, but I recognize that when the time for growth and opportunity comes again, the first people to get phone calls will be those with whom someone else wants to work. If you can demonstrate your value to your network in the worst of times through reciprocity and altruism, you stand a good chance of getting one of those calls. Alternatively, you can view job searching as asymmetric warfare, but in my opinion, “The Hunger Games” should remain a work of fiction and not a model for how to succeed in business.

Virtual Networking and Social Media

Geoscientists without Jobs, Part Four

In the previous installment, I wrote about the importance of real-life networking for geoscientists. Our jobs require multidisciplinary competence, so few managers are willing to hire experienced professionals without direct knowledge of their abilities. The best path to a job is through a trusted network, and the Internet is now our primary form of communication. Social media is a great way to raise your visibility in the community, but social media can be both used and abused in the quest for self-promotion.

Sites such as LinkedIn, Twitter and Facebook have utility, but they can become virtual Skinner boxes. They condition you to repeat behaviors by rewarding the pleasure centers of your brain; instead of food pellets, they give out “likes”, re-tweets, profile views and endorsements. If you’re on the job hunt, this may not be the best use of time. My favored strategy is to contribute only when it has both positive value and a low probability of reflecting poorly on me. The lessons learned are divided into positive (i.e., good uses of time), negative (so don’t do them), or both simultaneously.

Things Positive

For me, social media’s best use is maintaining connections to my real-world network of classmates and colleagues scattered across the globe. With the exception of chance meetings at conferences, I would lose touch with most were it not for the Internet. Some friends have directed me towards job prospects, offered advice, arranged introductions, and even referred me for consulting contracts. For such efforts I am truly grateful, and I reciprocate in whatever ways I am able.   

If I’m looking for technical discussions and expertise, I spend time in places like Stack Exchange. The model here is egalitarian, whereby people pose questions to a community of experts, anyone can answer, and then peer review determines which answers rise to the top. Status and visibility are based purely on the value of your contributions to the community. If you have knowledge and experience, this is a great way to demonstrate it.

If you are willing to put in the time and learn the tools, social media sites provide ways to connect with people, do background research on companies and personnel, and showcase your knowledge and skills.

Things Negative

By contrast, you can easily spend your social media time in worse ways. Just because you can do something online, it doesn’t mean you should. Activities to avoid include:

—Commenting on everything to boost your activity ranking. This only demonstrates you can game the system. The same can be said of endorsing people for skills without basis.

—Posting your political views (unless you are a career politician). You are guaranteed to alienate many potential clients, employers and co-workers.  

—Commenting on anyone’s appearance. No matter how you intend this, you will be seen as a cretin.

—Posting or commenting on irrelevant fluff. When Selena Gomez’s Instagram was trending in the oil and gas groups this summer (yes, this actually happened), it made me weep for the future of humanity, and a small part of me wished for a giant asteroid impact.

Things Indeterminate

Some lessons are simultaneously positive and negative. After posting columns like these online, I receive comments and emails from people in similar situations for whom these ideas resonate; this is encouraging. Other comments are horror stories about people who lost everything, who have no hope, and suffer debilitating bouts of depression resulting from job loss. I can only hope to offer encouragement, but secretly fear this same abyss. After setting up a consulting website, I began receiving résumés, which is both flattering and heartbreaking. I always respond and try to point applicants in a more useful direction.

A final caveat should be made about interacting with professional contacts on sites where one typically interacts with friends and family (like Facebook); this is a double-edge sword. You may learn something that helps you connect to a colleague, or you may want to bathe in Lysol after peering inside their stream-of-consciousness. The risk one takes here is to completely alter your working relationships.

Conclusion

I’m old enough that I still view a computer as primarily a number-crunching device, so I marvel at how the device that once alienated me from society as a computer nerd is now the thing that connects everyone in a hyper-Darwinian social network. Social media is a tool, and like all tools with sharp edges, you must handle it with care. It is a particularly sharp tool when one considers how our digital footprints remain fossilized online for all to examine for eternity. Even if you’re not looking for a job right now, your record is there for all future employers. Proceed with caution, and do your best to create value and increase the signal level rather than contribute to the noise.

Networking IRL and Growing your Comfort Zone

Geoscientists without Jobs, Part 3

You’ve heard the adage, “It’s not what you know, but who you know.” Being a professional geoscientist for more than 20 years, I can say both are important, and discounting the latter is something one does at their own risk. The geoscience community is on the cutting edge of technology in many ways, but has not yet made substantial use of social media. Perhaps this is a reflection of our demographics, but there is no denying the majority of us only do professional networking IRL. (For those unfamiliar with web shorthand, that’s “in real life”.)

Geoscientists seeking jobs can glean a great deal of information from the Internet—and we’ll get to that in a later installment. For casualties of the downturn, real-world networking is far more valuable. An intelligence agent will tell you human intelligence is more important than chatter on the Internet. Perhaps more important than keeping tabs on the industry is the need for you to be marketing yourself, and nothing beats doing that in person. When the time comes for a manager to make a hiring decision, the best way for you to be top of mind is to have been in front of his or her face.

The hardest thing about networking when you’re unemployed is getting over the initial embarrassment of advertising your status. Let me be frank about this: it sucks, it’s hard, and yet it’s absolutely necessary to do. The good news is that it gets easier, and if you struggle with networking skills and suffer from anxiety when meeting new people (as I do), you may want to grow your networking comfort zone with some progressive steps.  

I make it a point to go out to lunch at least one a month with different colleagues in small groups, anywhere from one to three people. These are people I’ve worked with at various times over my career, and I consider the primary function of these meetings to be social. Yes, I’m staying connected to the community, and I’m also learning about their companies and their challenges, but I treat these as primarily social occasions and an excuse to get out of the house. There’s no pressure to be “on” in these situations.

The secondary purpose of these interactions is to sharpen how I present myself to strangers. Talking with a colleague from five years ago forces me to talk about what I’ve done since we last worked together, and it gives me raw material for my “elevator pitch”. I’ve found that I’m not always the best judge of what makes my knowledge and skills unique, and insights from my friends have been both surprising and useful. This is a form of peer review, something we appreciate in the technical aspects of our careers and often under-utilize in other arenas.

After a few of these smaller gatherings, I felt it was time to go up to something bigger, like a GSH (Geophysical Society of Houston) luncheon. As someone who is incredibly socially awkward, these events are terrifying, as I do not handle large gatherings of people well under the best of circumstances. Interestingly, I found these events to be both terrifying and supportive. It’s a bit like attending a survivors’ support group; many of these people have been there before. After attending a few GSH events and working on my introductions with colleagues who were not as familiar to me, my confidence grew a bit, and I decided to take another step outside my comfort zone.

A few months back, the Houston Geological Society held a workshop on geoscience consulting, and I had never attended an HGS (not to be confused with GSH) event. There were over 100 people at this event, and only two I recognized. I was now forced to meet new people! It turned out to be one of the most productive days I’ve spent in a long time. I felt a bit like an anthropologist among the natives, as I was one of the few geophysicists in the room. Being something of a novelty, it sparked many interesting conversations, including a few which led to some consulting opportunities about which I would have not otherwise known.

All learning takes place by understanding the boundaries of your comfort zones, and then working to slowly expand them to encompass new knowledge and experiences. Learning to network is no different. For many of us, this is the most difficult aspect of maintaining our careers, but if we take careful steps outside our comfort zones (taking care not to leap off cliffs), we can develop these skills just as we do our technical knowledge.

Career Choices and Suffering Minimization

Geoscientists without Jobs, Part Two

If you’re one of the growing numbers of recently laid-off geophysicists, the question of career change is obvious. If you’re gainfully employed watching countless colleagues being shown the door, you may also be pondering the same point: should I stay or should I go? Neither Mick Jones nor I can answer that question, but I can offer a way of thinking about the problem.

I’m a geophysicist by training and a pragmatist by nature, and since we spend much of our time working on inverse problems, this seemed a logical framework for analyzing the problem. For those not familiar with the concept, it’s worth taking a brief aside to describe inverse problems as geophysicists see them.

Inverse problems are those in which one attempts to define a model that would predict a set of data. Curve fitting a line to data by tweaking the terms of the equation for the curve is a good example of this. The way we determine how good we fit the model to our data is by minimizing some metric (usually a least-squares error) that measures the misfit between real data and those the model predicts. As we change the terms in our model, the error will get larger and smaller, creating many hills and valleys in our misfit function. These valleys are local minima, and we may cross through a number of them on our search for the overall lowest point, the global minimum.

In geophysical problems with many variables, that misfit function is a surface in a multidimensional space, containing many peaks and valleys. We are forced by mathematics to admit that there are several different models (i.e., several different places on our surface) that can achieve the same fit to our data. That solutions to inverse problems are non-unique is both counter-intuitive and fundamental. Some models may be mathematically possible, but the combination of terms that arises from them might be physically impossible or otherwise unreasonable. This is where experience and guidance from the scientist enters the problem, where we try to constrain our search for solutions to those with some plausible basis.

So, in thinking about the complex interplay of costs, limited income, financial obligations and career objectives, I decided to treat this as an inverse problem.

I define the variable to be minimized as my personal suffering (or that of my family, discounting their suffering for having a geophysicist in their midst). Like all inverse problems, there is no unique solution. I assume there are a number of possible “happy valleys” in the dimensions of this space, and the goals of this exercise are to determine what variables drive the path from one local minima to the next, to measure relative costs, and decide how to decrease overall suffering.

In Part One, I described the steps of a basic plan for the immediate aftermath of a layoff, summarized as:

1) Determine your burn rate for fixed expenses.

2) Estimate the time gap between now and full-time employment.

3) Determine the possible scenarios that will cover the gap.

4) Define an end goal.

5) Work your plan but remain flexible.

This gives you a description of the immediate vicinity of your “suffering landscape”. If you have contingency plans for setbacks such as layoffs, then hopefully you are in a local minimum that will not disappear before you identify the next valley over. If you’re already on the slopes, though, your path to the nearest local minimum might be predetermined for you.

Depending upon your position on the landscape, the Lagrange multipliers might negate the effects of every variable except career change. In other parts of the landscape, other variables might increase your well being just as effectively; for example, maybe you can ride out the downturn as a consultant and have a modest retirement at age 65, but those plans for world travel and a summer home will need rethinking. Perhaps the choice between paying your mortgage and investing in your children’s college fund is a no-win situation that forces career change.

There are two useful insights I gained from treating my choices as a “suffering minimization” inverse problem. The first is that moving between any two local minima will temporarily increase one’s suffering. The nature and extent of that suffering will vary, but at least you will have some sense of what to expect on that journey. The analogy is imperfect, though, because stresses of different types can feed off one another, and once you’re trekking across the landscape, the combination of financial and emotional stresses will make any slope harder to climb.

The second is that the topography of your suffering landscape will vary with time, so take note of the how fast the landscape changes. The safe haven of a local minimum may disappear when financial resources are gone; your hopes of selling your house and moving elsewhere might disappear with a softening real estate market. Steady ground can become quicksand, or a new valley may appear close by. Time can work for or against your depending on your options.  

Sticking with a career in geophysics may be an active choice or it may be beyond your control. Of the out-of-work geophysicists to whom I have spoken about this, there are two reasons why they don’t change careers: they don’t need to change, or they don’t think they can. If you’re in the former category, you’re in an enviable position. If you’re in the latter, I have good news.

A well-trained geophysicist possesses a number of highly marketable skills. Computer programming, signal processing, data analysis and mathematical acumen are individually desirable skill sets. If your career has largely been driven by your interest in these skills and their connection to geoscience is only peripheral for you, a career change may be a natural progression. In the exploding world of data science and “Big Data”, there is an ever-increasing demand for people who can combine these skills to analyze large, complicated data sets and derive a set of model parameters to make useful forecasts. Call me crazy, but that sounds like an inverse problem. Geophysicists are arguably more prepared for the coming data-driven revolution than any other discipline, so opportunities abound.

It’s important to realize a career change is rarely a binary yes-or-no decision. You may explore the other valleys in your vicinity for a time, and later decide that your personal Shire is the world of geoscience. Presently, though, that valley is being scoured. No one will fault you for leaving with all those orcs roaming about.

So You've Been Laid Off

Note: This is the first in a series of eight columns written for the Geophysical Society of Houston (GSH) monthly journal on the subject of surviving the downturn. This first appeared in the September, 2016 issue.

Geoscientists without Jobs: A Guide to Surviving the Downturn, Part One
So You've Been Laid Off

As a former boss once explained, you move up when times are good, and hold on when times are bad. For many in the GSH, times are indeed bad. If you’re of or over the median age of SEG and GSH members, this is not your first downturn. If you’re experiencing the cyclical nature of the oil business for the first time in your career, though, it can be traumatic and depressing.

I finished graduate school in 1999, so I missed the major downturn of the mid-1980s.  Older colleagues would talk about it in hushed tones, like Obi-Wan Kenobi speaking about the heyday of the Old Republic before the Dark Times—before the Downturn. Like Obi-Wan, though, they spoke in vague generalities, never imparting anything specific or useful about how they survived layoffs, economic hardships, or what led them to ultimately stay in this business to possibly do it all over again.

 As of June 2016, more than 350,000 oil and gas workers have been laid off since November 2014 when the battle for market share among oil producers began. Of those layoffs, 118,000 have been in the US, and 99,000 of those have been here in Texas alone. The Houston professional geoscience community has been hit especially hard by the downturn, yet there is scant discussion in the publications of the SEG or GSH about what to do if you’re one of those 99,000. Technical societies are intended to encourage professional development, and these cycles are basic facts of life; therefore, we have an obligation to prepare our members for this reality. That median age demographic I mentioned above? That’s a direct consequence of our failure to prepare geoscientists for the last cycle, and we’re still dealing with the repercussions.

 I was laid off in December of 2015. Since then, I’ve had to learn a number of lessons about planning what to do next, developing my skills, maintaining my professional network, looking for jobs (and avoiding scams), building a consulting business to keep the lights on, and managing the stress. What follows is a series of columns on these lessons in the hopes that someone else doesn’t have to learn them all the hard way.

 If you’re one of the 99,000, or you think you soon will be, I hope you find something of value here. If you’re an older colleague for whom these lessons resonate with your own past, please take that as a cue to share your insights with your friends struggling in the present.

Part One: So You’ve Been Laid Off

Once I was unemployed, one of my first calls was to a former boss and confidant, Bob Hardage at the Bureau of Economic Geology. He related the story of how he was cut from Phillips in 1986, where he was then Chief Geophysicist. When his manager told him he was out, the paradoxical reasoning was, “You’re our best geophysicist, so we know you’ll be able to find a job quicker than anyone else.” The subtext was clear, though; this was purely a cost-cutting measure. I felt a little better after hearing that.  

As weeks went by and I heard about more colleagues being let go, I marveled at the people with years of experience, incredible publication records and amazing technological achievements to their names all being shown the door. After countless conversations which included the phrase, “You mean they let him go?!?”, something which had been repeated to me ad nauseum finally sank in: it’s never personal.

In that moment when your manager comes to your office, says, “Come with me,” and sits you down with someone from Human Resources, the only thing you will be able to think is, “What could I have done differently?” Unless you have a time machine, it’s a pointless question because the answer is always nothing. It was never about you, your skills, your sociability with co-workers, that time you had to re-run a migration that put the project behind schedule, or if you ever picked a bad prospect. Personalizing someone else’s cost-cutting decision is a natural first reaction, but it’s counter-productive. The best advice on offer is to let it go. In this moment, you need clarity for the important work of planning what to do next.

So what do you do next? Do you stay or leave the oil business? Do you look for part-time work or try to be a self-starting consultant? The specifics of anyone’s situation will vary, so here is the basic algorithm I used to constrain my choices with some practical boundaries:

1) Determine a budget to fix a timeline. Take everything out of the budget you reasonably can, figure out your fixed costs, count your available cash and decide how long can you last with a reduced income. It’s important to remember there will be unexpected costs that always come up, like a new set of tires, or that water heater that needs replacing. (Looking back over the last few months, my unexpected costs added 10—15% to my monthly expenses.) Also remember to factor in fixed costs that occur once or twice a year, such as property taxes, auto insurance and vehicle registrations.

2) Estimate how long it will be before you find full-time work doing your previous job. The marketplace for field personnel is different than that for a researcher, and the speed at which each will be hired back is going to be different. There is only so much intelligence one can gather from news sites and trade journals, so it’s important to keep in personal contact with reliable sources of information within the industry. (We’ll talk more about networking in Part Three.)

3) Determine the space between your financial resources and when you think full employment is possible. If there is a shortfall, you have to formulate a plan to cover the gap. Can you work part-time, or do you and your spouse/partner both need to work to make ends meet?  How you define “make ends meet” is critical. For example, can you cover 100% of your fixed costs and go indefinitely, or are you only able to cover half? Multiple scenarios are possible; think like a geophysicist and consider the degrees of freedom and underlying assumptions in your financial model.

4) Define an end goal. Facts are facts, but don’t discount your emotions, either. It is important to weigh your satisfaction with your life and career along with the practical choices you face. Are you proud of the work you have done in your career and want to continue in the geosciences? Do you enjoy the challenges and problems you face on a daily basis, or are you disengaged? Maybe you enjoy the technical work but not the circumstances, but you don’t think you have the skills to do something else. (You do, so if you’re thinking about leaving the oil patch, be sure to watch for Part Two.) In any case, you have to define your goal.

5) Work the plan until the plan doesn’t work. Your circumstances will change. Be willing to adapt, but also recognize that you need to hold your nerve if your plan is to succeed.

Remember, too, losing your job is a trauma that requires grieving. How and when you experience the strains of denial, anger, depression, bargaining and acceptance will be based on your own psychology and circumstances. Douglas Adams penned the best suggestion for these circumstances: “Don’t panic!” Use your analytical skills as scientist to assess your situation, make a plan, and give yourself time to adjust to your new reality. Just in case, though, you might want to hold on to your towel.

Defining Big Oil

There was a time when the term "Big Oil" meant something. One hundred years ago, "Big Oil" was Standard Oil. In the 1950s, the Seven Sisters would have qualified for that name. Today, most people in the U.S. think of "Big Oil" as the companies they can name based on the logos they see at the gas station of the so-called "supermajor" international oil companies which are publicly traded and/or privately owned, such as ExxonMobil, Chevron, BP, ConocoPhillips and Shell.

But are any of these companies truly "big" in the oil business in 2016? That depends entirely on how you measure big: by revenue, amount of oil produced, or the amount of proven oil reserves a company controls. I would argue that the last is the most important measure, but let's see how companies stack up on each of these metrics.

Oil Companies by Revenue

In October of 2015, Rig Source published an infographic of "10 Largest Oil Companies*", with the asterisk denoted their metric as gross revenue (not their actual profit) for 2014 in US dollars. Here is the breakdown:

1) Sinopec (China)  - $455.06 billion
2) China National Petroleum - $432 billion
3) Royal Dutch Shell - $422.11 billion
4) ExxonMobil - $394.11 billion
5) Saudi Aramco - $378 billion
6) BP - $358.7 billion
7) Total, S.A. (France) - $266.02 billion
8) Kuwait Petroleum Corporation - $251.94 billion
9) Chevron - $192.31 billion
10) Lukoil (Russia) - $114.17 billion

4 of the companies on this list (Sinopec, CNPC, Saudi Aramco, and Kuwait PC) are NOCs, or nationalized oil companies, which the government either owns a majority stake in or controls outright. 

Oil Companies by Production

If we look instead at the amount of oil produced by companies in 2013 according to Forbes, the story is slightly different:

1. Saudi Aramco - 12.7 million BOE (barrels of oil + natural gas equivalents) per day
2. Gazprom  (Russia) - 8.1 million BOE per day
3. National Iranian Oil Company - 6.1 million BOE per day
4. ExxonMobil - 5.3 million BOE per day
5. Rosneft (Russia) - 4.6 million BOE per day
6. Royal Dutch Shell - 4 million BOE per day
7. PetroChina - 3.9 million BOE per day
8. Pemex (Mexico) - 3.6 million BOE per day
9. Chevron - 3.5 million BOE per day  
10. Kuwait Petroleum Company - 3.4 million BOE per day
11. BP - 3.1 million BOE per day
12. Total - 2.6 million BOE per day
13. PetroBRAS (Brazil) - 2.5 million BOE per day
14. Qatar Petroleum - 2.4 million BOE per day
15. Abu Dhabi National Oil Company (UAE) - 2.4 million BOE per day
16. Lukoil (Russia) - 2.3 million BOE per day
17. Iraqi Oil Ministry - 2.22 million BOE per day
18. Sonatrach (Algeria) - 2.19 million BOE per day
19. PDVSA (Venezuela) - 2.1 million BOE per day
20. Statoil (Norway) - 2 million BOE per day

By this metric, 7 of the top 10 are NOCs, and 13 of the top 20 are NOCs. 

Things start to get a bit complicated here when we start comparing production by individual companies versus production by countries as a whole. The United States, for example, is a country that allows individuals and companies to own mineral rights, whereas most countries nationalized such resources such that they are owned by the government. So if we compare the output of countries as a whole for 2014, we see there is some nuance to this story:

1. U.S.A - 14,021 thousands of barrels of oil equivalent per day ( or MBOEBPD)
2. Saudi Arabia - 11,624 MBOEPD
3. Russia - 10,847 MBOEPD
4. China - 4,598 MBOEPD
5. Canada - 4,383 MBOEPD
6. United Arab Emirates - 3,474 MBOEPD
7. Iran - 3,337 MBOEPD
8. Iraq - 3,364 MBOEPD
9. Brazil - 2,966 MBOEPD
10. Mexico - 2,812 MBOEPD
11. Kuwait - 2,767 MBOEPD
12. Venezuela - 2,685 MBOEPD
13. Nigeria - 2,428 MBOEPD
14. Qatar - 2,055 MBOEPD
15. Norway - 1,904 MBOEPD
16. Angola - 1,756 MBOEPD
17. Algeria -1,721 MBOEPD
18. Khazakhstan - 1,719 MBOEPD
19. Colombia - 1,016 MBOEPD
20. India - 1,011 MBOEPD

Countries such as Saudi Arabia, Iran, Iraq, Algeria, Norway, and Kuwait have only a single nationalized oil company, so it's quite easy to compare the financials of their NOCs to the total output of the country. Countries such as Brazil and Mexico have a few smaller players but the NOCs are by far the largest players in those countries. In Russia, there NOCs (Rosneft and Gazprom), private companies (Lukoil), and up until recent sanctions, international supermajors . Others, such as the U.S.A, have literally thousands of exploration companies operating there. An additional complexity is trying to separate the finances (revenue and profit) from the source of production for the international supermajors. Companies like Chevron produce oil in West Texas, but they also have contracts in many other countries and partnership deals to produced nationalized resources in other locales, so the relationship between production, reserves and ownership becomes a bit murky.

Oil Companies by Reserves

Another metric (and arguably the most important) is the total reserves a company controls. How much an oil company produces on a daily basis can clearly affect the market price of oil, but this strategy is useful only when put into the context of how much a company (or country) could put on the market. But getting a complete picture of simply what the reserves are is a complex and and even murkier situation than production numbers, which are quite reliable by comparison because the vast majority of oil is bought and sold in highly regulated financial markets. 

For example,  according to the most recent Wikipedia entry on the topic, the top 10 would break down like this: 

1) Saudi Aramco (~303 billion BOE)
2) National Iranian Oil Company (~300 billion BOE)
3) Qatar Petroleum (NOC) (~170 billion BOE)
4) Iraq National Oil Company (~134 billion BOE)
5) PDVSA (Venezuela NOC) (~129 billion BOE)
6) Adu Dhabi NOC (~126 billion BOE)
7) Pemex (Mexico NOC) (~111 billion BOE)
8) Nigerian NOC  (~68 billion BOE)
9) NOC Libya (~50 billion BOE)
10) Sonatrach (Algeria NOC) (~39 billion BOE)
 

It has been argued that since the technology exists to extract oil directly from oil shales, heavy oil bitumen reserves and other "unconventional" reservoirs, the total reserves of the US now exceed that of Saudi Arabia. But this depends on how reliably one can estimate:

1) How much oil is in the ground
2) How much of it can be recovered
3) How much of the reserve numbers are validated facts and how much is political brinksmanship. 

For publicly traded companies that require complete transparency for their shareholders, #3 is not a legitimate concern. But for NOC for countries like Saudia Arabia, it's a different story. The entire economy of the nation, as well as all of the government services and infrastructure for their society, are paid for by the sale of their single valuable asset: oil. Because of the political implications, NOCs tend to keep their actual reserve estimates as very closely-guarded secrets. From the their public statements, as well as their activities with global contractors, we can make some estimates of their reserves.

Reserve numbers are also a moving target, driven largely by both technology and cost. The aforementioned shale reservoirs and unconventional plays in the US were not even considered part of our reserve estimates 20 years ago, but the enabling technologies (such as hydrofracking) changed this. Similarly, as we improve techniques to remove more oil from existing fields and reservoirs (a practice known as enhanced oil recovery, or EOR) allows us to extract a greater percentage of oil from a field. A "good" reservoir is one that you might be able to extract 30% of the oil from using conventional pumping techniques, but you might be able to bump that to 40% using steam or CO2 injection. These EOR techniques are more expensive, so the relationship between cost, technology and recoverable reserves.
 

Conclusion

So, who is Big Oil? The answer is, "That depends". But it's quite clear that when the average man on the street thinks or hears the words, "Big Oil", he's probably thinking of a logo for a company that he knows rather than the flag of a country he probably can't identify.