Outlook: Energy Employment Trends to Look for in 2017

Outlook: Energy Employment Trends to Look for in 2017
Regina Mayor of KPMG identifies what the industry can expect in regards to employment in 2017.

In what’s become a familiar story for the oil and gas industry, 2016 saw more layoffs and bankruptcies and very few job opportunities. But, we also saw the oil price bottom out – a sure sign that the worst of the more than two-year global oil glut is behind us.

Early signs of a recovery allowed for a bit of cautious optimism among energy workers and analysts, and if nothing else, allowed them to prepare for a brighter 2017. In a candid conversation with Rigzone, Regina Mayor, KPMG’s global sector head and U.S. national sector leader of energy and natural resources, shares what the industry should be looking out for next year in terms of employment and growth opportunities.   

Rigzone: In what geographical regions do you foresee the potential for job growth?

Mayor: I don’t know that I see strong pockets for growth. I do think China continues to be a growth area and we’re still seeing growth in some of the less mature Asian economies … areas like Indonesia, Malaysia, Vietnam and the Philippines. Parts of Africa, like Mozambique, could see benefits and there’s continued growth in Angola. There have been some big announcements around Papua New Guinea. Brazil is poised to have growth again. I think the country is sorting its way through some of its economic and political challenges, and their economy seems to be strengthening. Europe is still a question mark – with the long-term impact of Brexit and some of the economic challenges it’s facing. And Mexico, with the opening of its economy, we’ll see how the next round in bidding for its offshore leases emerges.   

Rigzone: What are some hot jobs to look for?

Mayor: I think a lot of the jobs in energy will be more technologically oriented rather than focused on technical engineering. So IT enablement, Big Data, data and analytics and robotic process automation – those will be the areas we will see more job opportunities. We’re also projecting that there will be quite a few construction jobs. Look at all the greenfield petrochemical developments that are still on tap … I think there will be a demand for more specialized trade and construction jobs and more diversification around the engineering talent. Utilities are poised to grow in general as they figure out what the next generation of the utility might look like. I think it will be smart to invest in renewable energy, technologies, information technology in support of the industry and maybe some of the more specialized trade in the area as growth for 2017.

Rigzone: What role will technology play in the industry’s recovery?

Mayor: Technology will play a key role. When the oil price starts to stabilize or bump up a bit more, I don’t anticipate that [all the jobs lost] will be rehired because I think the industry’s getting a lot smarter with technology and how they would deploy technology. For example, artificial intelligence, which enables people to manage and operate equipment that exists in a very remote location from a central location, enables you to do more with the technologically advanced activity. Digital labor, which we refer to as robotic process automation, are algorithms that can do complex transactions that previously required human intervention. And Big Data and data analytics is the ability to process gigantic sets of data in order to hone in on the things that are most important. I don’t think we’ll see all the energy jobs come back and technology will play a key role in replacing some of that human resource power.

Rigzone: Regarding all the cost-cutting that has taken place in 2016, do you feel that companies are prepared to deal with the after effects of the Great Crew Change and still attract talent to the industry?

Mayor: I think it’s going to continue to be challenging to make the industry sexy for young people. We’ve had really nice growth in the number of new graduates in traditional oil and gas fields such as petroleum engineering. However, I think in some cases, those newly minted engineers were some of the first to be let go and I worry that some of the talent will probably never return – once bitten, twice shy. The way we’re going to have to try and make it attractive for the next generation of successful executives is by playing up the leading edge technologies and the potential – for renewables, next generation solar or even wind farm development. That’s exciting to the next generation and it requires complex and analytical skills and deep engineering expertise. We can take information technology and make that attractive to folks who might be more interested in high-tech jobs … there’s so much potential with what those new technologies can deliver.

Rigzone: With OPEC finally agreeing to cut production, what global implications might this have on the industry?

Mayor: I think the industry has been waiting for this. The industry is reasonably comfortable at a $50 [oil price point]. They have figured out how to make money at that. Even new, not existing, ultra deepwater projects in the Gulf of Mexico can be profitable. So if you can do ultra deepwater at $50 and $45, and you can do shale at $30 or $35, then a stable $50 – or even bumping up to $55 – gives the industry the breathing room it needs to continue to grow and be successful. I believe that OPEC’s decision may be the end of the game of chicken that everybody’s been playing – ‘who’s going to cut first’ – and the recognition that we can’t continue to have this massive of a supply overhang and still expect prices to come back. And perhaps OPEC is realizing that the resilience of the American shale producers in the U.S. market is such that the United States is not going to be the one to turn off production. I am pleased with the decision and I think it’s a signal toward oil stabilizing at $50 or $55, which I think gives the industry the room it needs to continue to be successful. 

Check out this audio clip to hear what Regina Mayor thinks about Trump’s presidency and what that will mean for energy employment.

AUDIO CLIP
 

Valerie is an experienced writer and editor dedicated to providing useful and relevant career news about the oil and gas industry. Email Valerie at valerie.jones@rigzone.com

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Think Tank | Jan. 14, 2017
I agree with Mayor most when it comes to future talent and growth reflecting oil prices edging upwards. I believe it'll need a price of $60-65 a barrel to get anyone excited again. She is right by saying we'll never see the oilfield job numbers again not on the basis of new technology but on the basis of not finding the willing talent. I have been in the oilfield since 1975 and been through many a slowdown including the eighties and this has been the worse one yet and it is far from over. The post slowdown issues are going to be worse than the slowdown itself. The oilfield is not like manufacturing when it comes to automation with PLCs running our operations. The environment itself plays havoc with these systems and requires continuous maintenance and cleaning. I don't see a big shortage in labour, I see a change in the workers' job tasks. We are moving from a less labour intense environment to a more maintenance type environment for the oilfield worker. Labour is going to be the big issue when it comes to firing up these drilling rigs. In the early stages of rigging up you'll have some people still hanging around because they couldn't find a job elsewhere during the slowdown. Once these people have been appointed, then the problems of crewing will start. People in the oilfield never got caught up from the last slowdown in 2008-2009 as it was really 2013 before we started to see a real upswing and bang 2014 started sliding south with massive layoffs. So how does all this impact the oilfield worker? Well letís take a look all of a sudden I am making 6 figure salaries and then drop back to an unemployment cheque. Meanwhile I have a family to support, bills to pay, as we know probably new home, vehicles, toys upscale standard of living. Now most people are stretched to the limit but nevertheless quite capable of handling the lifestyle while employed. With no pay cheque what happens next? Unless I am a good saver with enough to handle a 2-3 year slowdown I lose everything and in a lot of cases my family which is a good reason I am there working hard in the first place. Now I just lost everything I have worked for and personally in a lot of distress. Now that we have experienced the above oilfield workers pain is this an environment I would like to focus my future career? Every oilfield worker who feels this pain shares this pain with their friends and family. Friends and family find this is horrific and cant stop talking about this oilfield worker to the point they are talking to everyone else in coffee shops, local malls, social media so on and so forth. How many people who left good jobs to chase the oilfield pay cheque wish they had their old job back and would do anything to get it back again or something similar with less pay and more stability? I would say at least 80-90 percent. I am a person wanting to become an Engineer thinking about a great future in the Engineering field. Does Petroleum Engineering sound like an inviting career after what I hear or see is happening in the oil and gas industry? Yes you can make big money as long as you are working steady. Money will never be big if you work in a cyclical field and possibly lose everything you worked for in fact you'll be lucky if you're making minimum wage. Before the slowdown we had a lot of industries outside of the oilfield short of personal including Engineers, Trades people, IT and Labourers. I expect these industries would have picked up on the surplus of oilfield workers that the oil industry provided. Once the oilfield finds people whether itís local or a broad to fill these positions, we are dealing with inexperienced workers with not enough experienced personnel to train them. Now what happens? If itís anything like the past it'll be an increase in injuries, serious injuries and even fatalities like we never seen before. People read hear and listen as this plays out and now looking at the industry at arms-length wondering should I venture down this highway of uncertainty. Wait, we have an answer we will go get the training so it'll be a safer environment to work in. So they decide to look for a drilling school that offers this type of training - a school which has hands on and safety programs that meet the demand of the industry but find out they all closed because they couldn't handle the slowdown. The post slowdown environment is much worse than I thought it was going to be and now I decided to look elsewhere to develop my career. I don't need the hassle and negativity this industry delivers.


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