The fortunes of the energy sector have shifted considerably as the business has transitioned from decline to growth and opportunity. According to the American Petroleum Institute, the oil industry gained more than 600,000 new employment between 2009 and 2011, accounting for 6.3 percent of total U.S. labor income in 2011.
Since Russia's invasion of Ukraine on February 24, crude oil prices have risen twice as high as $105 per barrel, a level last seen in 2014. And it's possible that things will only grow worse from here. Even if the present sanctions against Russia do not specifically target the energy trade, sanctions against banks and other businesses would stymie Russia's oil, natural gas, and coal exports, disrupting global energy markets. The reduction in Russian oil and natural gas supplies to markets will have spillover effects, raising coal and liquefied natural gas (LNG) prices even higher and adding to inflation.
Aside from commodity price changes, energy businesses must contend with longer-term trends in labor capacities and talent development. How do leaders manage these fluctuations while simultaneously anticipating the longer-term trajectory of energy innovation, sector development, and anticipated workforce supply gaps? Here, we have compiled industry experts’ perspectives on the eight biggest trends affecting the oil and gas business, as well as some of the most significant strategic implications for workforce management.
The Ukraine conflict is reigniting a decades-old debate over the importance of energy independence and the role renewable energy sources like solar and wind should play in achieving it. Those involved in the debate in the United States have essentially divided into two factions. On one hand, there is a push to increase domestic oil and gas output to replace Russian energy imports.
On the other hand, some climate activists are suggesting alternate legislation that would prohibit Russian imports as well but would force the US to gradually replace them with renewable energy.
Similarly, in Europe, which is significantly more reliant on Russian oil than the United States, climate activists are pressing legislators to speed up the transition to renewable energy and not to expand oil drilling in the Northern Sea as part of new Russian energy limitations.
Is there a chance that this dispute will hasten the adoption of clean energy solutions?
The hunt for oil reserves has intensified, requiring corporations to drill in increasingly remote and hostile regions, making it even more difficult to recruit and retain people.
This is what to consider:
Links between the private sector and NOCs are becoming increasingly significant. NOCs hold over 90 percent of the world's oil reserves and 75 percent of production, according to the World Bank, with comparable figures for gas.
The oil and gas industry is confronting new hurdles as it moves to more efficient operations and lower-carbon business models in this complicated energy market. Automation technology has the potential to provide efficiencies that are both environmentally and financially beneficial across the whole oil and gas lifecycle, from the wellhead to the gas station.
While automation is nothing new, the advancement of powerful data analytics, machine learning, and artificial intelligence is allowing businesses to automate previously inaccessible procedures and operational areas. Back-office functions were thought to be particularly vulnerable to automation.
Automation can also improve supply chains, labor deployment, spare parts management, and a variety of other organizational inefficiencies. By automating routine processes, technology can free up important staff time, allowing them to focus on more specialized and knowledge-intensive work.
As certain jobs become automated, new possibilities will arise that will necessitate the acquisition of new skills. For example, automation and digital initiatives have increased the amount of data produced by oil and gas businesses. That data has the potential to reveal a wealth of information about your company's activities – but only if you know how to use it.
The more advanced deployment of the so-called digital oil field is one of the ways O&G majors are beginning to look outside the box (DOF). This is a wide phrase that refers to the application of connected technology and big data developments to improve E&P operations and enable remote monitoring and decision-making support.
As automation and new technology bring new methods of working, it's not simply digital and data skills that are becoming more important. Interpersonal and problem-solving abilities are becoming increasingly important, and they must be prioritized.
To achieve safety standards, oil and gas corporations spend millions of dollars on educating new employees and contract workers. Employees can engage with facility equipment and experience probable emergency situations in a safe environment using virtual reality and 3D simulations.
Previously, a significant amount of classroom-based knowledge was required for highly technical jobs. However, the oil and gas business has embraced virtual reality and other digital tools to provide workers with more relevant and memorable training than a classroom-based approach. This virtual and on-demand approach to training can also help you save money.
Oil and gas businesses’ traditional business model was to develop and nurture people from within. The industry necessitates a high level of specialized knowledge as well as exceedingly complicated processes. However, in recent times, the industry is being forced to turn outside the field for fresh hires as the industry transforms to require fundamentally new skillsets and existing workers retire.
At this point, it is evident that the labor shortage in the oil and gas industry is a concern for today, not tomorrow. According to a PwC’s study, the sector will need to hire 120,000 new workers over the next ten years to prevent a disruptive skills deficit, and the repercussions of that demand are already being felt.
According to the Society of Petroleum Engineers, up to 50% of experienced professionals in the energy sector could retire in the next five to seven years, posing a significant challenge to the business.
Now, these are the questions you should ask:
Technology innovation is essential for achieving and maintaining leadership in all energy sectors, from wind and solar to petroleum exploration and production. For practically all professional roles, the development of upcoming technologies and the integration of existing technology into the energy business are game-changers.
Rapid technological advancements have an impact not only on the talent required but also on how organizations compete for available talent.
How are you preparing employees to move to emerging and unconventional technologies by teaching them “cross-platform” skills?
As the oil and gas industry continues to face uncertainty, whether as a result of unanticipated wars or support for more ecologically friendly options, such as clean energy, the industry must adapt to stay afloat by going digital.
Digital technology has aided oil and gas firms in managing turbulence to some extent by enabling new ways of working that boost efficiency, dependability, and production while lowering costs. By enhancing everything from machine diagnostics and maintenance to offshore drilling, these new technologies are drastically altering the way the sector runs.
Oil and gas firms can operate with fewer employees because of technological advancements. However, it is having an impact on the types of occupations and skills that are necessary.
The President of Manup, Dimeji Bassir, stated in his keynote address, Ahead of the Hunt, that digital is the secret sauce to staying ahead of the job or talent hunt. The energy and climate crises have triggered a labor crisis, leaving the energy business in desperate need of remedies, as seen by the preceding experts' overviews. Legacy workflows must be digitized, not only to gain cost and operational efficiencies but also to better align the business with current operational realities and future workforce demographics, as the Oil & Gas sector continues to struggle to attract talent due to its poor reputation as a reliable employer.
Manup takes advantage of cloud computing’s ubiquity and affordability to automate the complex and antiquated procedures of lifecycle workforce management. We created technology that allows energy professionals to remain on top of their training and certifications, discover new projects faster, and take home more money.
Energy firms must adapt to changing conditions in order to gain or maintain competitiveness. Manup, a company founded on the principles of sustainability, inclusion, and diversity, employs digital-powered technology to help businesses streamline procedures, lower costs, and ensure that their projects are carried out by a trained, safe, talented, and diverse workforce.
Manup has a big vision: to be the go-to digital destination for every energy worker looking for a job and for businesses wishing to connect with professionals all over the world.
Henry Bassey. Published Mar. 2022.