Opinion: Oil Industry Needs Mindset Makeover to Weather Skills Storm

[Editor’s note: Opinions expressed by the author are their own.]

Since being made redundant in the oil downturn in 1986, I have listened to energy company CEOs extol the importance of their people, only to witness large-scale redundancies to cut costs whenever the commodity price collapses. Sadly, the majority are usually the youngest and most impressionable among the workforce. This is inevitably followed by recruitment freezes and training budgets being slashed.

When the brightest and the best graduates from the late seventies and early eighties became the decision-makers themselves, the conversation would often reflect upon the missed generation; the industry’s increasing inability to recruit graduates and the impending big crew change as the baby boomers approached retirement. Yet, the cycle has continued with hollow rhetoric followed by systemic inaction.

As the operators pushed former employees out into a rapidly growing freelancer world and increasingly outsourced large elements of projects to the services sector, new companies emerged to resource project work. Companies like Petrofac, Wood, Senergy and Xodus filled the gap and became essential, particularly to the increasingly acquisitive small independent operators who themselves were emerging, often backed by private equity, to develop and operate assets at considerably lower cost than the majors.

But the impending resource crisis, caused by continued talent erosion over three decades, was kicked down the road. After six years of one of the worst downturns, when the baby boomers have hit their early sixties and in excess of 400,000 people were let go across the supply chain, tomorrow’s crisis is now today’s. 

With energy prices languishing at near historic lows and oil companies slashing production and capital expenditure, perhaps some will say that it’s still tomorrow’s problem.

This intransigent recklessness is exactly why, if we don’t finally face up to the potentially unrecoverable destructive magnitude of the situation (entirely of our own making), there is no chance of the industry surviving, even in its current form, when post COVID-19 global demand returns.

It is almost impossible to remember that earlier time when the brightest and the best scrambled to join the most exciting industry in the world. An industry that relished enormous engineering challenges, relentless in our pursuit of finding and supplying energy to the world but one which has been hijacked and allowed itself, through lack of communication, to be appropriated and portrayed as the foremost environmental enemy of the planet.

Having fueled economic prosperity and enabled energy security for the world’s fastest-growing economies, we ignored the exuberant, disenfranchised youth and didn’t learn from them or from other industries.

So, here we are facing two crises: a self-induced fall in energy prices sustained by a global pandemic, which has overnight collapsed demand, and with an aging and disenchanted workforce exhausted by the incessant uncertainty in an increasingly demonized industry.

In a new spirit of cross-industry collaboration, we must communicate that we will take responsibility for the energy needs of our planet, delivering an energy supply that embraces and pioneers low and zero-carbon solutions.

By adopting a communication style that is open, transparent and collaborative and tells a story that is so compelling, through examples and actions that cannot be refuted, we can transform public opinion.

This best practice must come from the next generation and from outwith our industry and it’s not just about engineering technology but also about behaviors. Using digital technology and data in new ways to bring new talent to the industry will be key to unlocking our survival and winning the recovery. 

Our Proteus platform was originally developed to supply clients, post-recession, access to talent in a more cost-effective, efficient manner with reduced cost by using digital connectivity to eliminate the need for office infrastructure and support staff. 

What has emerged is a transformative digital technology that can bring about a permanent cure for the critical consequences of the big crew change by offering up a B2B and B2C platform that transforms how we can access intellectual solutions to meet need.

Extremely simple to use, Proteus facilitates the capture of invaluable knowledge from existing employees, sharing that knowledge with a newly recruited generation of talent from across the globe. Its talent database is, through the application of a fit-for-purpose Enterprise Resource Planning (ERP) platform, comprehensively rated by clients with open, transparent feedback on the transaction by the supplier.

It’s a platform where costs are regulated by an honest and direct communication between the customer and the end supplier and where the individual is able to access the software and competency tools needed to fulfill the obligations of the transaction.

By changing behaviors and building in optionality on skills, quality, location and cos, we seek to tap into a globally diverse young and mature workforce with very different but complementary desires on not just who they will work for but from where, when and how.

We need to emerge from this crisis having changed forever: not solely driven by cost but by a commitment to values way beyond a corporate statement, shown to be hollow by inaction. Through owning the energy transition and embracing digital transformation, we must communicate a story that not only engages with a new global audience of young stakeholders but inspires the brightest and best to once again join our industry and make them proud to be part of it.

Author biography

James McCallum is chairman of Xergy Group Ltd.—the company behind Proteus, a business operating software that combines a work management system with on-demand access to rated talent and pay as you go access to major engineering software in a simple-to-use platform.

With almost 40 years’ of upstream energy experience, McCallum is a serial creator of companies that have changed the way the energy industry and clients can access talent and deliver solutions to the most complex and demanding technological challenges.  
 
In 1988, McCallum was a founder of Keltec, an industry leading supplier of drilling specialists. Global Marine Integrated Services was next in 1992, taking on the full turnkey scope of the most demanding drilling projects as well as participating in the industry’s first government energy think tank, Pilot.
 
On successfully exiting GMIS in 2002 and after a three-year period advising government on renewable energy strategy and policy, McCallum co-founded the globally recognised upstream technical management consultancy Senergy Group in 2005. Senergy was successfully sold to Lloyds Register Group in 2013 returning significant value to the group’s investors.