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Future Talent key to Long Term Success of Oil and Gas Industry

Future Talent key to Long Term Success of Oil and Gas Industry

The majority of headline news regarding jobs in the oil and gas industry over the last two years has been focused on the extent of cuts which have been felt on a large scale worldwide.  In the UK alone in 2016, over 60,000 oil and gas related jobs were lost as compared to a forecast of 40,000. 

In addition, despite a stabilising oil price and some prospects of the near term activity environment improving, further cuts may be seen in the wake of growing mergers and acquisitions.  However, what does the future hold for the industry and can it continue to attract, develop and retain talent for the upturn?  This was the keynote topic of an interesting panel discussion held at Offshore Europe.

Taking a medium/long term view, this will become a critical issue for the next phase of the industry.  It is easy to become distracted by the short term position but those businesses who have an eye to the future and develop strategies to engage with the next generation of talent will be most likely to succeed and prosper.

Looking at production figures through to 2035, assuming a natural 4% per annum decline from existing producing based upon published data, leads to estimates that the industry will require to replace this decline with 120 million barrels per day of new production.  That is a very large number.  It will also require an additional estimated 4 million additional head count in both technical and non-technical roles worldwide.  Added to this, there is a generation which is approaching retirement.  In the UK, it is estimate that there are currently 180,000 workers in the industry fulfilling all roles with nearly half of that number likely to retire in the next 10-15 years. 

The panel session led to an interesting discussion as to how the industry prepares itself for replacing this void and adding fresh talent particularly when it may be faced with perceptions of a “hire and fire” culture.  The themes which came through from the session and the areas where employers will need to focus to remain at the forefront of choice for the next generation were:

  • Flexibility – many industries have been adopting flexible and agile working practices/arrangements so that other lifestyle choices can be accommodated.  There is a view that the oil and gas industry has been slower to adopt these practices but there are clear opportunities.  However, flexibility works both ways.  Given the challenges of project planning, there needs to be open communication where employees also realise that flexibility means that their roles may change and develop. Equally "guaranteed" career paths with a sense of entitlement should be replaced with bilateral career "ownership".
  • Engagement and communication – businesses must have "buy in" from all levels of the workforce regarding its strategy and how all employees can contribute to success.
  • Mobility/internationalisation – the oil and gas industry still presents a great opportunity for those who seek international assignments/experience.  Looking to the future, the majority of new production is likely to come from overseas locations.  An example discussed was Mexico.  The country will require to produce new production of 3 million barrels per day by 2040, effectively an entire replacement of existing production.  It is estimated that to obtain this prize will require 114,000 new oil and gas industry workers by 2030.  There are key roles available for those who wish to assist in building that skill base to help achieve the aspirational goal.
  • Technology – many aspects of the industry will be changed by rapid advances in technology.  Embracing and selling those technological changes will be attractive to the digital tech savvy next generation.
  • Diversification – combined with increasing new production will be a greater focus worldwide to a transition to low carbon energy.  Businesses which are diversified beyond oil and gas and incorporate clean energy focuses will provide greater security and also alignment to the next generation’s vision of energy balance.

Looking to the future, the oil and gas industry will have many exciting, technologically advanced internationally focused projects that will require significant talent.  It is critical that businesses have an eye for that talent now in order to secure their own futures.

Sean Saluja
Partner

Burness admin