Despite the recent decline in oil and gas prices, the energy industry has experienced phenomenal growth during the last decade. That growth has changed the industry landscape and led to a surge of people joining the industry. The changed landscape, though, means that even those previously employed in the industry are faced with technologies and financial and legal situations that didn’t exist until recently.

The question, then, is how does a company prepare its employees for the new world of oil and gas?

Some companies have answered this challenge by providing current employees, as well as new hires, with training specific to current industry conditions—and with training they’re discovering a world of possibilities for broadening employee skill sets.

Spectra’s program

Spectra Energy Corp. established a comprehensive in-house program focused on providing opportunities for development for every employee. Amy Grace, Spectra Energy’s general manager of talent management, told Midstream Business that the benefits the company has seen as a result of its training programs have been evident.

“From a source perspective, our roles [were] being filled at about a 50% rate with internal employees, and that’s really unprecedented with companies,” Grace said, referring to hiring in 2013 and 2014. “That is a strong indicator that our employees are receiving the training that they need to be successful, not only in their current role, but in future roles for years to come.”

The development program has been so successful, she said, because it offers, “first and foremost for every employee, an opportunity to complete a development plan.” The development plan is “a self-written, self-edited plan that the employee then reviews with their respective manager to get biannual additional feedback for other opportunities for development.

“We want to ensure that they are performing at their best in their respective positions, so [the development plan] may be supplemental training from a technical perspective for their role. But a comprehensive development plan would also include areas of their respective interests, which may be beyond their current scope of work.”

Once a Spectra Energy employee has a goal for future development, the company has several ways it helps the employee achieve professional goals. Grace noted that Spectra Energy approaches employee development from “70% experiential, 20% additional perspectives, whether that be through our mentoring or our coaching, and then 10% from coursework.”

Coursework offerings include both computer-based and instructor-led training from a catalog of courses.

Job rotation

To achieve its experiential training goals, Spectra Energy implemented job rotation programs. In addition to its policy of allowing employees to bid on other internal roles once they have been in their current roles for a year, the company has an engineering rotation program, a Commercial Associates Program (CAP) for recent MBA graduates and XFinance (pronounced “cross-finance”) for those in financial roles, she added.

The engineering rotation program provides Spectra Energy engineers “the opportunity to gain both field experience and engineering and construction exposure.” This gives engineers in the program a breadth of experience that benefits both the employee and Spectra Energy.

The CAP moves employees who recently acquired MBAs through different functions and business units in the company over the course of three years, Grace said. Those assignments “could include mergers and acquisitions, operations, investor relations and other areas.”

The program expects much more from employees than a typical internship would require, she said. “It is a very comprehensive rotational program where they’re exposed to complex business issues and actually get to contribute in a full contributor capacity.” Spectra Energy’s XFinance program works similarly, by giving employees the “opportunity to rotate from financial reporting into accounting into tax and into treasury, so you get a full exposure rather than just one siloed approach to the finance organization,” Grace said.

In addition to the employee development that all Spectra Energy employees participate in, Grace said that about 16% of employees take part in the company’s leadership training program.

There are several types of programs that full under the leadership training umbrella, Grace added. “There’s one for front-line supervisors; there’s one for middle managers; there’s one for officebased leaders and then we have executive programs as well.

“With each progressive course, the time involved increases as well. So some of our leadership training coursework concludes in a day, whereas the executive leadership program, which is called ‘Leaders Leading Leaders,’ is done in cohort style, and they would meet in a series over the course of a few months,” she explained.

Recently, the company has implemented a new type of leadership development at the senior leader level, Grace said, to make the training “a bit more flexible … to ensure that individuals have the opportunity to spend as much time focused on their daily responsibilities as leadership development.”

Off to class

Not all companies have the need to establish the large-scale program Spectra Energy put in place, however. Others may not have sufficient knowledge in-house to support such a program, especially if the company is in the process of expanding its services. In many cases, it makes sense for a company to find an outside expert to help with employee development, and consultants in all areas of the energy industry are helping those companies meet their training needs.

Steve Reese, president of Reese Energy Training Inc., told Midstream Business he has seen demand for training in the midstream grow exponentially during the last five years. One course he wrote three years ago, “Midstream and NGL Basics,” has “taken off like crazy,” he said, “and a lot of that has to do with all the sizzle in the midstream sector right now, from all the private equity chasing it, to all the MLPs, to all the new firms.”

Reese’s courses are aimed at giving people in the industry a total understanding of the midstream. He came into the field with a background in business, but aims to impress upon those who attend his course, as well as the leaders of the companies he works with, how much an understanding of the mechanics of the industry can benefit the company and its employees.

When he entered the industry with a business degree, he said, he and his colleagues were told, “Here’s the contract, negotiate it.” Without any knowledge of the field, he said, the general reaction to such a task was, “Cool. What’s isobutane? What’s a compressor?”

What does it look like?

To avoid a similar situation with employees today, Reese said he tells his clients that there’s still good reason to allow office personnel to visit the field, “not necessarily for training, but to take a tour, to see what the equipment looks like.” And that goes both ways, he said.

“I go to the field and they want to understand how the contracts work, where the margins are,” Reese said. He advises his clients, “Bring field people in from time to time to intermingle in training … and let them meet that accountant that they talk to, or that gas scheduler, or that commercial rep they talk to every day, instead of hanging up the phone and going, ‘Well, they're probably headed to the golf course.’”

The real world experiences he relates in courses give attendees perspective on the industry, he said. “There is no black and white in the midstream. You can’t believe how many times I say during a course, ‘Most of the time.’ I never say, ‘Every time this happens or not.’ I think it’s real-life experiences, and I also think you’ve got to start out with a nuts-and-bolts primer of the whole industry.

“I think the smart companies are doing this type of training,” he said. “Not because of what I bring to the table, just how [the employee’s] perspective changes from their box to how all the boxes fit together.”

Global knowledge

While the North American midstream sector may be sizzling, it isn’t the only show in town. Angus Warren, principal of London-based Warren Business Consulting, told Midstream Business that most of his training work has been in Africa and the Middle East, with occasional work in North America, Europe and southeast Asia.

“I would say probably about 70% of our programs are emerging markets and 30% are mature markets, and by that I mean London, Houston, Kuala Lumpur,” he said. Education goals for employees in emerging markets are often notably different than in mature markets like those in North America, he said.

“In emerging markets they’re almost always, not always but almost always, working with production-sharing contracts, and so [in an emerging market course] there’ll be greater emphasis on production-sharing contracts, whereas in the western economies—developed economies like Australia, the U.K., U.S., Canada—the concession system, the license system is much more popular. So you need to allow for some specifics.


Warren Business Consulting’s “5 Day MBA in Oil and Gas” gives managers and senior professionals a deeper understanding of the industry from the perspective of investors and industry leaders. Principal Angus Warren, at the lower right, poses with students of a 2011 course in London. Source: Warren Business Consulting

“Another good example of that is in emerging economies, oftentimes local content is very, very important,” Warren said. “So you see that in Nigeria, they have a big push to encourage the use of local supplies, local equipment, local labor. They call this ‘local content,’ and that’s very common in emerging markets, so we might customize a course to cover specific issues like that.”

Warren often works with western oil companies in those emerging markets, he said, and those companies sometimes have made training commitments to the local government and the national oil company.

“They may be required to sponsor a certain number of local government officials as part of their commitment to the country,” he said. “In some parts of the world, you know, training is sometimes still treated as a reward for good performance, which is perhaps not the best way to view it.”

Part of that, Warren said, is due to the overall lack of experience in emerging markets. People are “desperate to enter the industry … but there’s no one within the country really to tell them about it because the industry is quite new to the country. There’s no one really to help them get started, so that’s where companies like ours can get involved.”

When an oil company knows what its strategic objectives are, Warren added, it often looks at its current capabilities and realizes it’s not able to meet its goals. Hiring an expert in the field to teach its employees is one way for a company to reach its goals.

“The role of training is to help the organization to reach its strategic objectives. And the company will need to have certain capabilities to do that. Training provides one of the options. It’s not the answer to everything, but it’s one of the options the company has.”

Down to the fundamentals

Kirk Boatright, president and CEO of Training Consultants International Inc., based in Tahlequah, Okla., teaches courses on engineering and tells the students in his class, “The intent is to understand the technology.”

From LNG to E&P and FEED, the energy industry doesn’t lack for its share of jargon, much of which can seem incomprehensible to someone entering at entry level or with an MBA but no industry experience.

“The terms in the oil business, that’s secondary,” Boatright told Midstream Business. “If I do my job correctly, you’ll be able to tell someone what something means because you’ll know what it means, not because you had to memorize some definition.”

When he began teaching his basic technology course in the early 1980s, it was mostly meant for administrative personnel as well as finance, legal and government workers, he said.

“Well, the secretaries found out after three days they could understand relatively complex technologies, and that surprised them,” he said. “They weren’t ready to stop after three days, so I went to a four-day course.”

He now teaches several five-day, technology-intensive courses that attendees find demanding but able to follow, even if they lack an engineering background. He developed those courses for people in the industry with only a few years’ experience.

“How wrong I was,” he said.

According to Boatright, more than 50% of the 14,000 people who have attended his courses over the years had several years of industry experience, “most at management or supervisory levels,” but still found tremendous benefit in the sorts of specific lessons and examples Boatright provides in his training.

Even with advances in technology constantly occurring in the oil and gas industry, there is really no replacement for employees trained for their jobs. “If you make the mistakes I show in the course, it doesn’t matter how much you spend on high technology,” Boatright said. “Fracturing, acidizing, 3-D, 4-D, seismic—you’ll never overcome the technical and therefore economic disaster you created.”

Caryn Livingston can be reached at clivingston@hartenergy.com or 713-260-6433.

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