Major industries—including oil and gas—tend to operate in the same way that they have been for decades; that is, until circumstances present themselves that catalyze change.
In the wake of a year-long pandemic, oil market crash, and resulting economic recovery now under way, much uncertainty still exists in our industry. In addition, lofty new climate goals from the Biden Administration, growing global financial pressures and regulatory mandates, and stakeholder advocacy have added another layer of complexity in the march toward net-zero and cleaner energy.
As a result, technology innovation within traditional oil and gas is burgeoning. For example, two supermajors, Saudi Aramco and Equinor, were named to Forbes Blockchain 50 list this year, spotlighting the companies’ unique, innovative applications of technology. Saudi Aramco was noted for its investment “to integrate thousands of sensors at oilfields and refineries, to better verify asset performance and reconcile smart contracts with its vendors.”
In a similar vein, Data Gumbo launched an automated and auditable sustainability measurement solution that ties operational data to environmental, social, and governance (ESG) standards reporting, giving energy companies a way to achieve real-time, verifiable environmental performance monitoring and access to faster, better environmental impact data.
Applications like these are the forerunners of many shifts ahead on both a collective and individual scale. There is a coming wave of digital transformation as oil and gas companies turn to technology to radically change operational status quos to streamline efficiencies, monitor and meet carbon reduction targets, and operate in a lower-cost market. Now, the workforce must rise to the occasion.
The Tipping Point
Last November, an Ernst and Young poll of oil and gas executives showcased that industry is primed for change: 92% of executives agreed that their companies would have to alter operations; 80% reported that they were investing moderate resources into digital technologies; and 43% listed big data analytics and technology insights as top trends expected to positively impact growth over the next 3 years.
But digital technologies are accompanied by steep learning curves—and to execute transformations on the ground, in the field, and in offices will require a workforce well-positioned to leverage and extract value and adopt new innovations.
The need to upskill the current workforce was evident prior to COVID-19. Now, it’s dire. In 2019, Accenture Strategy released a study on the growing labor shortage within the energy industry, anticipating a 40,000-qualified-employee gap by 2025. During the 2014 economic downturn and the subsequent boom/bust cycles, many skilled laborers fled to other industries to seek adjacent market jobs or returned to school, creating the conditions ripe for a shrinking talent pool.
The Good News Is in Technology
With technology playing a bigger role enabling companies to do more with less, the oil and gas industry's workforce can follow suit. A potentially smaller workforce with the right know-how to maximize the tools being used or investigated is a critical feature to support a clear route forward. The industry embraced remote operating centers to enable a single petroleum engineer or directional driller to manage operations across multiple well sites, and now companies are applying the same logic to accounting, quality assurance, contracting, and supply chain management by automating as much as possible so skilled workers can manage by exception.
The same EY survey acknowledges that workforce composition and training are two significant barriers to technology adoption. Obstacles that must be overcome to bring about meaningful change include a shift in change management and the ability to uplevel skill sets as needed across new technologies, including those identified as data analytics, cybersecurity, data science, design thinking, artificial intelligence, blockchain, and machine learning. People with such knowledge can often be found in nearby industries that can transfer knowledge to the energy industry as it embraces a digital future.
The Role of Industry Collaboration
To meet evolving market expectations, allow for agility and flexibility, and determine the business use cases and return on investment around new technologies, industry is more frequently looking to consortium programs like Blockchain for Energy and Oilfield IoT Consortium to run pilots and test technologies for value chain integration.
For instance, Blockchain for Energy (then known as the Offshore Operators Committee (OOC) Oil & Gas Blockchain Consortium), a group comprising 10 oil and gas member companies—Chevron, ConocoPhillips, Equinor, ExxonMobil, Hess, Marathon, Noble Energy, Pioneer Natural Resources, Repsol, and Shell—partnered early last year to study and define blockchain use cases across the industry value chain to solve common pain points with much success. Another successful pilot explored Authorization for Expenditure (AFE) balloting, deploying technology to transform one of oil and gas’ most fundamental business activities.
Deloitte cites the deep understanding of impacts made possible from implementations as a necessary priority to embracing new business processes. In this model, collaboration enables multiple stakeholders to vet and forge technology ecosystems with value-proven and repeatable roadmaps for success available.
Looking Ahead: Sea Change
The workforce the energy industry wants to cultivate is keen on solving issues using technology. Right now, many individuals are highly motivated to contribute to the digital transformation of the sector. The new school of thought is that not everything needs to be done manually, and to build lean, efficient operations, employees desire advanced programming and automation.
A similar scheme to the consortium route is occurring in the education sector to support the upskilling of the workforce for oil’s digitalization with online training programs and innovation labs dedicated to advancing cleaner, affordable energy.
Industry is at a crossroad, and while there is much that has yet to be determined, pivoting now to retrain energy workers in technology (at the same time that big players are investing in innovation and delving into technology to solve pain points) signals a future where talent and solutions dovetail, evolving an entrenched industry into a forward-thinking future.
