Refiner vs Supermajor
Hey Guys,
I'm currently at a bank working as a FO quant and have been interested in breaking into commodities, so I applied like a madman and was lucky to get 2 FT offers from
1) Supermajor (BP/Shell): Nat Gas scheduling role
2) Big oil refiner (Phillips 66/Citgo/Conoco): Trading analyst (Financial)
Both pay about the same so that's not an issue. I'm leaning towards the scheduling role since I'm more interested in the physical side of commodities vs financial. My end goal is to become a physical trader, so what do y'all think is the better choice? I know some traders used to be schedulers but how "easy" is it to make that transition? Would it be better to become a financial trader and then try to go physical? Thanks!
Hi Associate 1 in S&T - Other, check out these links:
More suggestions...
Fingers crossed that one of those helps you.
I'd take the BP/Shell scheduling role. Think it'll be more interesting and will feel a lot more like you're in the thick of things. If you're coming from being a quant you should be able to pick up scheduling pretty quickly. Should keep you fairly engaged, especially at first, but can become mundane after awhile once you get it and depending on the shop/role. If you can leverage your quant background to improve on processes shouldn't be too hard to stand out, majority of schedulers lack anything beyond basic excel skills. If physical trading is your goal it'll help learning all the different pipelines/meters/hubs/constraint points. Once you're more comfortable i'd make friends with the analyst/s on the desk and start figuring out how they model supply & demand. Not sure the exact progression now a days at BP/Shell to cash trading but if they don't allow you to in a year or two just bounce to a shop that does, shouldn't be too hard with scheduling experience from either of those. From there work your way to a term/financial role or whatever you fancy.
In my opinion scheduling is definitely the "easier" of the two roles to make the transition to physical trading, especially gas if that's your goal. Kind of hard to trade physical when you don't know anything about the logistics behind what you're wanting someone to give you a shot at trading. You'll certainly pick up the different terminology required to trade physical while scheduling. Wouldn't say it's impossible to go from financial to physical but if you're dead set on physical definitely start out learning the logistical side first.
Wow, that was more detailed than I expected haha, I'll take the nat gas scheduling role for sure. Do you have color on what bonuses look like for scheduling nowadays? I've heard 15-20% of base is typical but that might be outdated. Thanks!
Current banker interested in going to physical, I was wondering if the amt of processes in scheduling that can be automated are decreasing? I'd imagine in the past couple of years, the supermajors have had their share of tech-inclined talent who can quickly automate those processes.
Depends on the shop and how much they've invested in their own internal systems and what 3rd party systems they're utilizing. The US physical gas space is very fragmented and not streamlined at all vs say Europe. While it's gotten a bit more consolidated there are dozens of different EBBs for different pipelines utilizing completely different systems for nominating, some more modern/user friendly and other as archaic as using windows 95. There's been more of a push with different pipelines utilizing similar white label style EBBs or through consolidation of several pipelines utilizing the same "ecosystem", but for the most part you will still be logging into separate systems to nominate on a daily basis for each pipeline.
There are of course several companies that have stepped up to try and streamline this process. Companies such at NatGasHub or utilizing back-end systems like Allegro that allow you to input noms in one place and then push them all out automatically to respective EBBs with one click. Bigger companies have also invested in their own internal scheduling systems that are much more streamlined than say random tabs on an excel sheet. Some of these still are not as automatic and do require you to manually input data over into several different EBBs.
In short, there's definitely still a lot of room for improvement when it comes to automation and a better user experience in the space on the ops front. Can say I don't envy still having to deal with it all.
I'd chime in and say bonuses are pretty structured at the majors for scheduling roles based on experience.
You should expect base 125k-145k and bonus 10-30% of that
Oh okay gotcha, that's around the base they provided. Thanks for the insight on the bonus!
I'd say this is probably accurate on the bonus front for ops/non-trading roles at most companies. Not sure on starting salary for completely green hires currently probably ~100k or so. The numbers here seem correct for a scheduler with a couple years of experience.
I think the refiner is more interesting. A refinery is essentially a spread option. With your experience seems like a good fit and your will be in front office role pretty quick vs gas scheduling for 2-3 years then trying to take some test to become a cash trader to move onto trading paper after 2-3 years.
Shell has lost a lot of people recently, schedulers and traders, ICE lighting up with new people every week.
That being said that seems like a good thing for you. When you start scheduling, it will be whack, you will feel like you’re utilizing 3% of your brain only doing data entry. You won’t know the systems, learning where to fucking click, what you can and can’t do etc is half the battle…
Once you can get a hang of the systems, will take a month or so, then you can start to learn the ‘why’ and the pipe(s). Can’t flow here cuz X, but we can flow here timely and change eve, etc…. TGP maintenance season is here and we’ve already had to change the way we are nominating gas.
After that, start automating. A lot of the systems are archaic as shit idk if you’ll be able to leverage your programming on that end (you probably will be but I’m ignorant). An above user mentioned excel, I just wrote some quick VBA that scrapes the sheets I need after trading is done for timely, and plugs it into a view that allows me to nom everything in a minute or so. We manually nom so this makes life a lot easier.
Happy to provide more color if you’d like, drop me a PM
In the merchant world yes not the supermajor world. If you do any of this before 3-6 months your boss will ride your ass so hard, your job is to have every nom in before everyone else and pipes flat as a pancake. You need to be the ideal employee for a head of scheduling before you want to impress anyone.
Your manager does not report directly to trading, only for the TDP people they manage or when the head trader says wtf is going on. Their main report is head of scheduling who reports to the operations side of the business (not head head trader). Your bonus is based on how the corporate team does as a whole and not just trading, like every other engineer and hr employee.
Oooof, maybe don’t listen to me then. My manager reports directly to the head trader, so excuse my ignorance.
Unfortunately this is a tough one, BP/Shell is probably some of the worse places to go as a scheduler coming from your current role. Lots of people will not want to teach you or allow to move forward fast cause you came from a FO bank. Then you have the TDP people to deal with and so on.
Merchants and some more lean marketers treat scheduler way different the two behemoths really stall your career.
If you really really enjoy gas…just prepare for the environment you going into. But also a year into scheduling if you can find a role at a merchant (which pay higher for scheduler) seriously consider it.
As for #2 not sure why its being pushed out. Oilquant or someone from that world should chime in. Those are very strong shops and it seems you will be doing analytical front office work day1.
Would definitely agree that there is going to be a cultural shock going from a quant role at a big bank to an operational role at a big oil company. I have been at both firms. Literally no one with your background will have been at that job in recent memory, perhaps ever. If you had an Ivy League type math education, you are going to stick out in a crowd of Texas state school business major guys. And in my personal experience, I have never actually seen a scheduler move to a trader role directly. Usually it’s a TDP or an analyst who did a scheduling rotation. Maybe it’s a bit unfair for operators, but when you are actually doing business critical things that have to run, you can’t just “rotate” yourself out to pick up other skills and be more attractive as a candidate. It is still great experience, but there is really not this natural pipeline of talent that moves from non TDP ops experience into trading at least from what I’ve seen at the bigger oil majors. So would definitely agree on that one.
For the analyst role at the refiner, it really depends on what that is. Just be aware that analyst at an oil company is not the same thing as analyst at a bank. Analysts at oil companies can very well be full time deal entry, exposure management, pnl reporting roles. Whereas a lot of those functions are covered in back office roles at banks. You will still be working with traders at the refiner in such a role, but just be aware that it can be quite unglamorous (though essential to learn if you want to trade). It is a lot more interesting in my view if you are more focused on market analysis (and that skill set makes you more attractive to financials hedge funds as well. You can be a financials trader more easily either way in my opinion as you are in the same reporting line vs BP/Shell as a scheduler, but once someone becomes a financials trader they don’t really go to physical (maybe it could be done but I haven’t seen it). I have seen physical traders go financial though.
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