The Great Crew Change used to be a phenomenon that everyone in the oil and gas industry could easily describe. When it was referenced, people knew it referred to the large age gap in the oil & gas workforce, where most engineers and geoscientists were either over 55 or under 35. Seems simple enough, right?
The Great Crew Change Before
If you peel back the onion a bit, you’ll see the implications of the great crew change. The older crew, comprised of nearly 50% of the industry’s employee base, would be retiring in the next 5 to 7 years. Imagine what losing that invaluable experience would do to any industry? Real world experience that can’t be taught in school or by reading a book or studying a report. The skin-in-the-game type of struggle that requires engineers and geoscientists to take into account all the variables, risk, investment, and geologic factors that E&P companies face every day.
On top of facing a huge talent shortage, there were other elements that complicated the great crew change concern. First of all, a lack of technological innovation plagued the industry. Secondly, the Internet drove a digital wave that pushed incoming workers to online technologies, leaving the oil & gas sector largely ignored.
The Great Crew Change After
Now, enter the drastic decrease in oil prices. Oil lost almost half of its value in just 6 months and now hovers between $50 and $60 dollars a barrel. With the downturn of WTI, many of the super majors started tightening their belts, looking for efficiencies and laying off thousands of employees. Factor in oilfield services giants like Halliburton and Schlumberger and the decline has claimed 100,000 jobs or more. The reductions flooded the market with talent from all ages and now the great crew change is not as easy to define as it used to be–if you could have ever called it easy before.
New technology offerings had already entered the market to attract the younger workforce and make up for the experience gap. Before the slump in oil, data and tools were gaining adoption domestically. Unfortunately, in this current climate, technology can seem like a nice-to-have to those decision makers scrutinizing budgets.So when given a choice between paying the bills and keeping the organization in the black versus having the latest and greatest technology, what will be chosen?
Thus far, we’ve seen Drillinginfo’s customer base fall into two camps: (1) those that are in such dire straights left with no other choice, and (2) those taking this opportunity to double down.
And why not double down?
The Opportunity to Double Down
The industry as a whole has shifted from drilling any available land that had potential to pausing and being more efficient and selective.
Current commodity prices are forcing the hand of many E&P decision makers to find ways to do more with less, identify opportunities faster and succeed at $50 oil. So how can they do that? Technology. Think of many of the technological innovations, from the light bulb to the Internet, that you can’t live without. Before they were invented you just made do without really appreciating the power it had to make daily tasks easier and faster.
With the data, intelligence and tools now available to the market, those companies that invest in their business and look at ways to be more efficient and increase return-on-investment will win when oil rebounds. Current technology can collapse years or months of work into days or hours. Not only is now the time to be proactive with planning, processes and technology, companies can take the time to hire the right candidates, in order to find the perfect balance of both experienced and technology savvy.
Once oil prices rise, those companies will be already operating at optimal performance and the increase in revenue will be icing on the cake. So what will happen when oil is at $75 or higher? Will your company be primed and ready to capitalize on the upswing?
There are unanswered questions and there is uncertainty, but this situation can be looked at as opportunity. Before, oil & gas was living large and did not have to focus on efficiencies, accuracy and finding the perfect opportunity. Now it does and that is okay. The Great Crew Change 2.0 will continue to unfold, and it will be interesting to see who comes out on top in this dynamic environment.
Martha Aviles
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This is unfortunately true in a number of industries…..and is a trend line I’ve discussed numerous times to my industrial gas audience….those that listen ! The industrial gas producers are those that make and supply the products of “air” ( namely nitrogen, oxygen for the most part…also argon and the “rare” gases.)
When times were good and money was flush, there was little incentive here and in most industries to do anything else but “milk” this age-category for all it was worth, without a thought given to the eventual “baton-pass” to the younger, up-and-coming generation. Like the oil-and-gas guys….there was a hiring lapse in the middle years….and now we have nearly a generation ( 20 years) dividing these two groups…above 55 and under 35. The simple answer would be to mentor at the design offices…and to “double-up” for the field-technicians and engineers. But of course….this was never done as the timeline was “too far out”….and also that cost constraints and the necessity to sell internal work functions to internal “costed” budgets….never allowed this necessary mentoring and doubling. The end result is that many of the “mistakes”…..or “avoidances”….that the old guard know about must be learned again…sometimes at great cost to equipment failures and (unfoirtunately) personal injury ;potential including possible loss of life. This is unfortunately a “way of the world” in some sectors of the business community…and something that will certainly play-out with interest over the next 20 years.
This is unfortunately true in a number of industries…..and is a trend line I’ve discussed numerous times to my industrial gas audience….those that listen ! The industrial gas producers are those that make and supply the products of “air” ( namely nitrogen, oxygen for the most part…also argon and the “rare” gases.)
When times were good and money was flush, there was little incentive here and in most industries to do anything else but “milk” this age-category for all it was worth, without a thought given to the eventual “baton-pass” to the younger, up-and-coming generation. Like the oil-and-gas guys….there was a hiring lapse in the middle years….and now we have nearly a generation ( 20 years) dividing these two groups…above 55 and under 35. The simple answer would be to mentor at the design offices…and to “double-up” for the field-technicians and engineers. But of course….this was never done as the timeline was “too far out”….and also that cost constraints and the necessity to sell internal work functions to internal “costed” budgets….never allowed this necessary mentoring and doubling. The end result is that many of the “mistakes”…..or “avoidances”….that the old guard know about must be learned again…sometimes at great cost to equipment failures and (unfoirtunately) personal injury ;potential including possible loss of life. This is unfortunately a “way of the world” in some sectors of the business community…and something that will certainly play-out with interest over the next 20 years.
I agree with Wil, actualy I am not from [email protected] branch but from Marine offshore branch…seen similar situation on ships servicing [email protected] as PSV, AHTS, MPSV… too many new guys with quite different working attitude, not as “old” school when everything can get fixed and ship stays in business, this days it is important to write e-mail and be online … thanks also to management ashore which was commonly without marine background and is still now (more and more)… and such situation will unfortunately continue as company top brass are from accountant / financial sector and mostly looking what share holders saying, fair enough but when kind of crisis arise or some disaster / failure they have excuses … looks that it will be a common practice in many years to come , just to say it in simple way: wrong people in number of industries. I do not see any positive move in industry as proper support for education / training, training courses are big business but without core basic transfer of knowledge , governments are not aware of real problems or maybe they do not care or do not know how to analyze what future will bring or most probably mix of of this negative factors… happy I will retire soon and not going to look this industries deteriorating.
I agree with Wil, actualy I am not from [email protected] branch but from Marine offshore branch…seen similar situation on ships servicing [email protected] as PSV, AHTS, MPSV… too many new guys with quite different working attitude, not as “old” school when everything can get fixed and ship stays in business, this days it is important to write e-mail and be online … thanks also to management ashore which was commonly without marine background and is still now (more and more)… and such situation will unfortunately continue as company top brass are from accountant / financial sector and mostly looking what share holders saying, fair enough but when kind of crisis arise or some disaster / failure they have excuses … looks that it will be a common practice in many years to come , just to say it in simple way: wrong people in number of industries. I do not see any positive move in industry as proper support for education / training, training courses are big business but without core basic transfer of knowledge , governments are not aware of real problems or maybe they do not care or do not know how to analyze what future will bring or most probably mix of of this negative factors… happy I will retire soon and not going to look this industries deteriorating.