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How to win even in the downturn


Adaptation is the key to survival

The recent industry downturn has been seen as the worst in a generation, where bankruptcies surged and jobs declined at alarmed rates. In such a situation, chances of a career progression or even sustenance look bleak for industry professionals.

The downturn took away as many as 4.4 million jobs. As the industry now treads a slow pace to recovery the oil prices seem to be in a bind with the imbalance between OPEC production cuts and US shale surge. The companies are strategically planning on operations to reduce costs and increase efficiency. The question that impales the professionals is – when are the jobs coming back?

First what we all need to remember is – every market suffers periodic downturns and likewise recovers back. Even as the world is increasingly talking about and taking steps towards the renewable sources of energy, there still isn’t, at present any feasible alternative to meet global fuel needs other than the oil and gas. So in this perspective, for at least another half a century, the trends would revolve around increasing production on oil and gas, unless there are solutions in renewable that reduce costs and increase efficacy. The stature of oil as the basic fuel is enormous and to see our dependence on it diminishing doesn't look much likely.

Historically speaking, the oil and gas price cycles function around an approximate cycle of 30 years. Prices shoot up when demand outpaces the supply, hover on the peak for a few years, then plummet with the development of new supply sources and the consequent slow down of the demand growth.

The price crash forced the oil executives to focus on strategic production to reduce capital spending while increasing efficiency. This resulted in a shift from conventional tools to embracing technology and automation. This is the reason why out of the millions of jobs that were lost, somewhere to a third or half may never return.

Companies are increasingly resorting to technological and software aid in drilling and production. So, as the industry is making all efforts to recover this year, the companies are increasingly hiring for positions in automation, software and data. The oil and gas industry in particular has heavy reliance on manpower and modern science and technology can never annihilate the need for human workforce. The Iron Roughneck, a robot developed by National Oilwell Varco Inc., automates the repeated and hazardous task of connecting hundreds of segments of drill pipe in the process of being shoved into miles of ocean water and oil-bearing rock. The robot still needs a human engineer to ensure that the operation is carried in order. A robots manager is also employed to ensure the maintenance of the equipment and address to it in the event of wear and tear.

So engineers and workers employed in the industry are advised to carefully plan their career and obtain technical degrees in relevant fields. When the industry recovers there will be a huge demand for technical and software related jobs, and the current market does not have enough workforce to supply for the positions. So, current workers should acquire technical skills for they are the ones that not only are in demand in the current market but will continue to thrive in the future.

Secondly, numerous offshore projects in the North Sea are coming to an end of their lives.

For the next 40 years Decommissioning is meant to be a focus. As per official figures, by the 2050s around 470 platforms, 6,000 miles of pipeline and 5,000 wells will need to be removed from the North Sea. Additionally an estimated 40,000 concrete blocks that enable in keeping the offshore operations steady, also need to be removed. This will open a flood of opportunities in offshore engineering/construction services firms - specially providers of heavy lift vessels. These large scale decommissioning projects will require engineers to attend to the technical challenges in an economical, safe, and environmentally sustainable manner.

In conclusion, it should be understood that the oil and gas industry is to recover from the downturn at one point or the other. But the road to recovery entails a shift to technology and cost effective and efficient methods. The key to survival in this long grind is adaptation to these new trends in the industry and strengthen on technical, analytical and problem solving skills. This industry is here to remain, and we need to remember that there is light at the end of the tunnel.