The oil and gas industry has been in an era of restructuring and volatility for the past 18 months. Low oil prices have led to significant staff layoffs, business unit disposals, mergers, acquisitions and even some landmark bankruptcies. And at the same time oil companies have worked towards optimising their production levels and some have quickly pushed into completing or re-tendering existing projects taking advantage of the low cost supplier environment.
What we have seen more recently, over the last couple months, is that most oil and gas organisations now feel like they have completed their restructuring and are refocusing their attention into talents once again.
Despite the heavy restructuring, new-look companies have maintained their traditional management hierarchies, however they have changed the way that they utilise their human resources in order to concentrate on specific business opportunities that improve productivity and lower costs. This is especially true for those who began to build their facilities in a stronger business climate and are now entering production phase under low price conditions.
“As the industry moves into production the type and style of leader that might be required for an organisation is potentially quite different to the type of leader that is really successful in the construction phase” says Julie Harrison, Deloitte Australia human capital partner, said in an interview with Rigzone. Harrison suggested as an example. “It is still the type of leader who has significant experience but it has to be a leader with experience in production”.
Skilled professionals in operations and production disciplines were already the most sought after employees in the first half of 2016 in an otherwise quiet recruitment environment, said Austin Blackburne, recruitment director at Hays.
“It was really only in business critical roles where companies were hiring but now the super majors are being more strategic as they have come out of the doldrums – there is more forward thinking than reactive thinking”, Blackburne said. “As construction is well and truly over, and exploration is almost non-existent, it is really about streamlining processes in controls and operations, and in oil field services, to make sure everything is running smoothly and production is maximized”.
This renewed focus on talent is the right move in the current oil and gas climate. Companies need to look to the future rather than bunker down to survive the storm.
Recruitment however has not yet reached the point of desperation, but when the inevitable upturn in the oil price does come about there is likely to be a severe shortage of production skills in the market. Those who had the required experience and skills may not return. Furthermore, in contrast to recruitment criteria of the past, much more focus will now be placed on technology, especially for automation to streamline processes.
“The culture that prevailed for a long time was to develop and deliver at all costs. There was a significant focus on delivering, but very little focus on cost”, Harrison explained. “Now what we are seeing is organisational cultures changing to more high performance culture, which we are gradually starting to see emerge in the oil and gas sector”.
How do you see the talent market and skills requirements evolving in the Oil and Gas industry?
Something interesting to share?
Join NrgEdge and create your own NrgBuzz today
In its latest Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) forecasts that natural gas-fired electricity generation in the United States will increase by 6% in 2019 and by 2% in 2020. EIA also forecasts that generation from wind power will increase by 6% in 2019 and by 14% in 2020. These trends vary widely among the regions of the country; growth in natural gas generation is highest in the mid-Atlantic region and growth in wind generation is highest in Texas. EIA expects coal-fired electricity generation to decline nationwide, falling by 15% in 2019 and by 9% in 2020.
The trends in projected generation reflect changes in the mix of generating capacity. In the mid-Atlantic region, which is mostly in the PJM Interconnection transmission area, the electricity industry has added more than 12 gigawatts (GW) of new natural gas-fired generating capacity since the beginning of 2018, an increase of 17%.
This new natural gas capacity in PJM has replaced some coal-fired generating capacity—6 GW of coal-fired generation capacity has been retired in that region since the beginning of 2018. The Oyster Creek nuclear power plant in New Jersey was also retired in 2018, and the Three Mile Island plant in Pennsylvania plans to shut down its last remaining reactor this month.
These changes in capacity contribute to EIA’s forecast that natural gas will fuel 39% of electricity generation in the PJM region in 2020, up from a share of 31% in 2018. In contrast, coal is expected to generate 20% of PJM electricity next year, down from 28% in 2018. In 2010, coal fueled 54% of the region’s electricity generation, and natural gas generated 11%.
Source: U.S. Energy Information Administration, Short-Term Energy Outlook
Wind power has been the fastest-growing source of electricity in recent years in the Electric Reliability Council of Texas (ERCOT) region that serves most of Texas. Since the beginning of 2018, the industry has added 3 GW of wind generating capacity and plans to add another 7 GW before the end of 2020. These additions would result in an increase of nearly 50% from the 2017 wind capacity level in ERCOT. EIA expects wind to supply 20% of ERCOT total generation in 2019 and 24% in 2020. If realized, wind would match coal’s share of ERCOT's electricity generation this year and exceed it in 2020.
Source: U.S. Energy Information Administration, Short-Term Energy Outlook
Natural gas-fired generation in ERCOT has fluctuated in recent years in response to changes in the cost of the fuel. EIA forecasts the Henry Hub natural gas price will fall by 21% in 2019, which contributes to EIA’s expectation that ERCOT’s natural gas generation share will rise from 45% in 2018 to 47% this year. Although EIA forecasts next year’s natural gas prices to remain relatively flat in 2020, the large increase in renewable generating capacity is expected to reduce the region’s 2020 natural gas generation share to 41%.
Headline crude prices for the week beginning 9 September 2019 – Brent: US$61/b; WTI: US$56/b
Headlines of the week
Detailed market research and continuous tracking of market developments—as well as deep, on-the-ground expertise across the globe—informs our outlook on global gas and liquefied natural gas (LNG). We forecast gas demand and then use our infrastructure and contract models to forecast supply-and-demand balances, corresponding gas flows, and pricing implications to 2035.Executive summary
The past year saw the natural-gas market grow at its fastest rate in almost a decade, supported by booming domestic markets in China and the United States and an expanding global gas trade to serve Asian markets. While the pace of growth is set to slow, gas remains the fastest-growing fossil fuel and the only fossil fuel expected to grow beyond 2035.Global gas: Demand expected to grow 0.9 percent per annum to 2035
While we expect coal demand to peak before 2025 and oil demand to peak around 2033, gas demand will continue to grow until 2035, albeit at a slower rate than seen previously. The power-generation and industrial sectors in Asia and North America and the residential and commercial sectors in Southeast Asia, including China, will drive the expected gas-demand growth. Strong growth from these regions will more than offset the demand declines from the mature gas markets of Europe and Northeast Asia.
Gas supply to meet this demand will come mainly from Africa, China, Russia, and the shale-gas-rich United States. China will double its conventional gas production from 2018 to 2035. Gas production in Europe will decline rapidly.LNG: Demand expected to grow 3.6 percent per annum to 2035, with market rebalancing expected in 2027–28
We expect LNG demand to outpace overall gas demand as Asian markets rely on more distant supplies, Europe increases its gas-import dependence, and US producers seek overseas markets for their gas (both pipe and LNG). China will be a major driver of LNG-demand growth, as its domestic supply and pipeline flows will be insufficient to meet rising demand. Similarly, Bangladesh, Pakistan, and South Asia will rely on LNG to meet the growing demand to replace declining domestic supplies. We also expect Europe to increase LNG imports to help offset declining domestic supply.
Demand growth by the middle of next decade should balance the excess LNG capacity in the current market and planned capacity additions. We expect that further capacity growth of around 250 billion cubic meters will be necessary to meet demand to 2035.
With growing shale-gas production in the United States, the country is in a position to join Australia and Qatar as a top global LNG exporter. A number of competing US projects represent the long-run marginal LNG-supply capacity.Key themes uncovered
Over the course of our analysis, we uncovered five key themes to watch for in the global gas market: