This page reflects viewpoints on the political, economic, cultural, technological, and environmental issues that shape the future of the petroleum industry. Offshore
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BEYOND THE HORIZON
With the emergence of digitization, Big Data, artificial intelligence
and the increased use of automation, the oil and gas industry is examining how these advanced, and sometimes disruptive, technologies will
play a role in improving performance and securing a long-term future.
Albeit one that eventually will represent a very different industry
from today. Even in the interim, while hydrocarbons still represent a
large proportion of product, increased digitization is driving greater
innovation and improving productivity and efficiency in the field.
In any industr y, people are the most important commodity. When it
comes to implementing the digital strategies that oil and gas companies
are pursuing to improve operational efficiency and retain profitability,
people are even more important.
The trepidation for the industry is that the skills required for this
new age of digital oil and gas differs immeasurably from what has
long been the traditional skillset and largely resides with a younger
generation. Failing to elevate the skills of a workforce is the most
common pitfall in unsuccessful transformations. To advance the skills
needed in the oil and gas market will require a combination of recruiting fresh talent from outside the industry – including data scientists,
software engineers, and other digitally savvy professionals – as well
as recent graduates, plus updating skills for operational staff already
within the industry. Disciplines include digital risk security, cloud
architecture and infrastructure, control networks (SCADA), robotics,
and Progressive Web applications.
The requirement for younger, technologically savvy individuals is
compounded by the natural but significant attrition from the industry
of retirement-age oil and gas employees – or the “Great Crew Change”
– with the potential loss, not of digital skills, but of process know-how
that technology will enable and advance.
With impending knowledge loss and digitization gaining ground,
now is the time to recruit new talent from the vast amount of highly
capable people available but who may not have considered the oil and
gas industry as a potential employer.
Petroplan, an oil and gas recruitment company, produced its second
Talent Insight Index earlier this year. A key finding was that digital
natives may not be looking at the oil and gas market as a career choice,
verifying earlier indicators within the industry.
While attracting younger, digitally-conversant talent is undoubtedly
a challenge facing many industries, it is somewhat more of a concern
for the oil and gas industry. In 2016, Bob Dudley, chief executive of
BP, forewarned that the oil and gas industry was in jeopardy of fall-
ing behind in the competition to attract talented younger employees.
Citing a McKinsey research study listing the industry sectors where
digital natives (often synonymously referred to as “Generation Y” or
“millennials” and born between 1982 and 2004) would least like to
work, he announced that the dubious honor went to the oil and gas
industry – with 14% of respondents admitting they would not seek a
career in the sector, due to its perceived negative image. This negative
response was higher than for any other industry, including defense
– and considerably higher than banking. In a further study from EY
the news got worse with the generation after millennials, commonly
referred to as ‘Z’, rejecting the idea of oil and gas careers.
Millennials are often mistakenly considered to be recent university
graduates, but they are now occupying junior to mid managerial
roles and are beginning to ascend into executive ranks. According
to McKinsey’s report, millennials will constitute a majority of the US
workforce by the early 2020s. They have already formed their own
attitudes and viewpoints around a host of work-related issues from
sustainability, ethical work structures and accountability to diversity,
equality, and technology. In addition, they are not only very different
from those of the baby boomer generation, but will come to define
corporate culture going forward.
However, most oil and gas companies do not find themselves in this
position and need to take urgent steps to foster the internal changes
required to attract millennials. They also need to take a more proactive approach to specifically seeking out technologically advanced
candidates from other sectors.
The industry also needs to take a fully engaged, hands-on approach
to recruiting IT-based technology graduates in addition to the latest
engineering high flyers. It needs to direct its recruiters to do the same,
reaching out to universities and colleges to communicate that the oil
and gas industry is a vibrant, relevant, and rewarding industry. Some
academic institutions based in oil and gas hubs such as Houston are
looking to expand their offerings around data science. Rice University, for example, has an initiative to significantly grow its faculty in
this discipline with a view to supporting Houston’s major industries.
Millennials will be a powerful generation of workers and that those
with the right skills will be in high demand. As well as commanding
strong remuneration packages, they will have influence over how and
where they participate in the workplace.
However, to attract and retain the next generation of engineering
and leadership talent, oil and gas companies need to work harder on
understanding their motivations. They will also need to make deeper
changes to their organization and cultural constructs to meet the
younger generation’s needs for meaningful work and social responsibility - and they will need to actively seek candidates from beyond
the usual energy-based hunting grounds.
There is a significant amount of transformation and innovation
happening in the oil and gas industry which if harnessed and well
communicated should engage millennials, but companies need a clear
and attractive storyline.
Oil and gas companies need
to adapt to attract digital natives