The oil and gas industry has many concerns about its future, particularly in light of recent events in the Gulf of Mexico. These include: adaptation through the recession, technology's impact on producing environmentally friendly energy, and industry's ever-changing workforce.
The state of the industry is improving overall, some say. Steve Knowles, president of Mustang Engineering, spoke earlier this month at the Offshore Technology Conference in Houston on managing through the tough times (OGJ Online, May 10, 2010). He said there is a "silver lining" to the recession and companies need to examine their internal and external culture and focus on what works for them.
Earlier this year, Grant Thornton released its annual upstream energy survey (OGJ, Feb. 22, 2010, p. 16). The direction for employment had turned upward and the overall results of the survey were optimistic.
This month, Maxwell Drummond released the results of its annual energy survey. It revealed a strong industry focus on strengthening the workforce, preparing for economic recovery, and developing unconventional resources.
The global executive search firm works exclusively with clients in the energy industry.
The participants include a sampling of leadership from all energy sectors including upstream, midstream subsea, oil field services, EPC, and seismic and subsurface. Nearly two thirds of the companies have international operations and the majority of headquarters were in the US, followed by Europe. Companies in Canada, Latin America, Asia-Pacific, and Africa were included in the sample. The companies' annual revenues ranged from less than $500 million to more than $10 billion.
Energy mix and industry
Over the next 5-10 years, survey respondents believe shale gas, coal seam gas, and coalbed methane will continue to dominate the energy mix. In the next 15 years, alternative, renewable, and nuclear sources are expected to significantly increase.
The main focus for unconventional resources at the moment is North America. Thirty-one percent of respondents believe the next wave of unconventional resources will be brought into production in Eastern Europe, followed by China at 24%.
Hiring personnel for specific skill sets tops the methods for capitalizing on potential future sources of energy at 53%. Forty-eight percent are focusing on mergers and acquisitions in key areas, while 44% are increasing technology with a focus on research and development.
Companies with revenues less than $500 million believe economic recovery to be at least 12 months away, while companies with revenues between $5 billion and $10 billion believe recovery is 3-6 months away.
Technology and people
About 54% believe appropriately trained and experienced staff dominates industry concerns. The topics of economic and environmentally friendly production of unconventional oil and gas and the rising price of energy were selected by 50% of respondents.
Thirty-nine percent of respondents said the cost and ease of extraction of unconventional resources will have the single most dramatic impact on the way energy is produced with regard to technology application in the industry. Drilling in high-temperatures, high-pressure environments as well as more infrastructure and better connectivity for alternative energy were selected by 13% of respondents.
When the firm asked respondents if they've been able to capitalize on opportunities created by economic conditions, the responses were divided into four categories. Regarding upgrading skills or talent acquisition, 42% said they have or somewhat have been able to succeed in these tasks. Fourteen percent have completely been able to acquire equipment or assets. Also, 14% of respondents have been able to completely acquire another company. Twenty-three percent have or somewhat have been able to sell noncore or less-productive assets.
Some respondents were able to add and upgrade staff. Forty percent of respondents said their employee base was stronger as a result of the recent global economic changes. Twenty-eight percent reported they were weaker and had to cut staff. Twenty-seven percent of respondents reported no change.
Sixty-eight percent said the lack of knowledge transfer from management and retirees to new and less-experienced employees is the most acute human resource gap in the short to mid-term.
In 2009, the firm asked respondents if they would recommend a career in the energy industry. Only 46% answered in the affirmative. In 2010, when asked the same question, 92% said "yes."
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