ConocoPhillips CEO Talks Talent Shortage and Learning in the Downturn

ConocoPhillips' CEO Ryan Lance addresses the oil and gas industry's impending talent shortage during Houston's CERAWeek by IHS Markit conference.

The oil and gas industry has been plagued with the looming question of whether or not it’ll have enough workforce as E&P (exploration and production) activity picks back up. Many believe the talent will not be available. There’s another viewpoint of the industry as well – that with automation and technology, the industry won’t need that much talent.

ConocoPhillips CEO Ryan Lance subscribes to both views.

“They’re probably both a little bit right,” Lance said Tuesday during the CERAWeek by IHS Markit conference in Houston. “Our industry is pretty fortunate in that it’s high-paying here in North America and around the world as well. I think we will naturally attract people who we need to run the business, but [the number of employees it takes to manage a rig] is coming down. We’re running our fields with less people so that’s a reality as well.”

Though the industry is significantly in better shape than a year ago, as many conference speakers noted, how companies manage through the lower part of the cycles is important.

“You have to be prepared for what you do at the bottom end of the cycles,” Lance said. “They’re going to get longer and they’re going to get more frequent because of the cycle times with the unconventional revolution in the U.S.”

While the Permian has been a hot spot for acreage acquisition recently, Lance believes there are definitely opportunities outside of the Permian. He said ConocoPhillips is focusing a lot of its capital today in the Eagle Ford.

“The interesting thing about these unconventionals is, let’s take the Eagle Ford for example, people might have drilled that up very fast in the last two to three years and they had to because they were measured on multiples of growth and had to grow very quickly,” he said. “They probably regret it because they learned so much more about how to complete these wells more efficiently today than even what we knew two or three years ago.”

Lance said the learning curve still exists today.

“We’re learning a lot more getting efficient. We’re still accumulating knowledge about the Eagle Ford going forward,” he said. “I think that’s why big data and analytics – which come from outside our industry – are working its way into our industry.”

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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Robert Ferguson | Mar. 17, 2017
A considerable amount of talent was at or near social security retirement age such as myself. O & G companies need to cultivate those in retirement for part time positions until resources are needed. Remember companies could not thrive under the previous administration, hopefully President Trump can improve the business climate.

Aaron | Mar. 15, 2017
You reap what you sow.......... moron

Mark | Mar. 12, 2017
Is he high of course there will not be the talent ? Conoco are part of the problem, they were getting rid of people like there was no tomorrow. Luckily for me I have managed to find a job outside of O&G and hopefully that will take me to retirement, I managed to steer my son away from the industry and he got a job a few months after leaving university. So I guess the point is here that those who are getting started in the world or making choices for college or university are not going to think that there future lies in O&G,and who could blame them.

Pete Bowler | Mar. 12, 2017
Actually, the first to start hiring will gain competitive advantage because they select the best of the laid off talent, So certainly not moronic!! Quite the opposite. And if they target relatively low production cost areas to expand in its less exposed than those waiting to develop offshore assets.

Edward Bardoel | Mar. 10, 2017
Well said David

James Moody | Mar. 10, 2017
Like most oil company CEOs he is living in a fantasy world created at their Country Clubs. He believes he can lay off all he wants to bump up stock prices during oil price downturns so he gets extra stock options and can retire to his tax haven before the consequences of his greed and short sighted management hit. Besides layoffs are easy to do and he can still make his early tee off time at the Country Club. He was pretty sure that he will be able hire college graduates in a year or two because they are not paying attention to what oil companys are doing and wont know that they will be laid off just before they can vest any serious pension benefits, have a family to support, mortgage payments and childrens college to save for. His latest fantasy is that there will be a magic computer code that will replace engineers and geologist and he can automate all other jobs away except for his.

Bill Richmond | Mar. 10, 2017
I agree with Davids comments, there are a lot us umemployed and looking for work. More often than not I get replys that I dont have the skill set to perform jobs Ive been doing over 35 years! Computers cant understand a resume nor ask pertinent questions.

Gordon Ham | Mar. 10, 2017
Talent shortage? More like a question on where to save money, there are plenty of talented older guys sitting on the bank waiting to go back to work. As usual the companies get it wrong, and try to make themselves look good with simplistic self serving comments that they think the public believes.

RBashir | Mar. 10, 2017
There is no talent shortage. They need to stop with that

Ahmed | Mar. 9, 2017
Indeed :) pretty much typical CEO attitude ....he think that because of high pay he will attract talents at any time ...the fact is , the majority of talented Oil workers found or in search of a more stable career , Id rather get a fewer bucks and pay my mortgage rather than get a fancy car today and go broke tomorrow when the imminent downturn looms.

RayK | Mar. 8, 2017
The major O&G companies used the down turn to purge the ranks of older employees near retirement and positions they could be replace or maintained with H1-B visa individuals. US employees are ready to return as soon as the majors are willing to pay for experience.

Mark French | Mar. 8, 2017
This is written in particular to Fracturing Fleets and their Electronic Technicians. My last job as US Electronics Supervisor took me to as many as 15 different Fracturing Districts across the US. In my travels I found that the “Electronic Technicians” in the fracturing field were, and are, for the most part self-taught. Many were military trained in electronics. Others brought up through the ranks learning from other techs. However, even the most experienced techs relied on their self-motivation to find manuals, call manufactures, or do whatever it took to learn “that piece” of equipment. They did not have available to them any specialized training for equipment used in the fracturing field. Even when they did get the opportunity to get training on “that piece” of equipment, it was usually from the device manufacturer. The manufacture would teach how “that piece” of equipment worked theoretically, and across the broad and often many different application. It was then up to the technician to take that training and learn how it applies to the fracturing world. In other words, there is no training tailored to the Fracturing Electronic Technicians and how it applies to the entire fracturing operations. There are no certifications or qualifications as applied to the Electronics Technician Gone are the old days of running a wire to make a light light, turning a handwheel to open or close a valve, twisting a knob to throttle up a truck. If the light didn’t light, you checked a wire. If the valve didn’t open or close, smack it with a hammer, etc. Today’s modern electronics in the fracturing world have computers that run everything, including making the light light, open or close a valve, or throttling a truck. Many fracturing units “talk” to each other and entire frac fleet can be controlled and monitored by just a few people in a communication van. In the old days, really not many years ago, if you had 15 pumpers on location, that mean 15 different operators, one for each truck. Now all 15 pumpers can be connected electronically and controlled by one operator inside a data van. Inside the communications van there are many computers, monitors, networks, and a barrage of other equipment that monitors and controls the entire frac operation. There are satellite systems that brings the internet into the van, and can broadcast the frac operation to whomever is given permissions to view. So again, gone are the days of running a wire to make something work. Today’s modern “Electronics Technician” has to not only know the basics of Ohm’s Law, soldering, reading schematics. He also has to know and understand the internal workings of every single different device in the frac fleet, how it works on that unit, and how it works or communicates with other devices or units. Today’s modern technician needs to know how to tear down and repair all these different devices. The technician needs to know Computer maintenance and repair. Networking, how computers talk to each other. How to interpret IP addresses and analyze communication errors among all the different frac units. The technician needs to know how satellite works, how it sends and receives data and the all-important internet. How to set up different networks so as to not interfere with operations. The technician needs to know PLC (Programmable Logic Controllers) systems. PLC systems such as Siemens, Honeywell, Allen Bradley, and many others. PLC systems are a series of small computers and devices programmed to do specific functions as designated by the equipment manufacturers. The technicians also need to understand and learn Pneumatic (air) systems, Hydraulic systems, Diesel motor and engine operations, Fluid properties, every device operation on each major piece of equipment, Cable repairs, Soldering, and every operation of every piece of equipment on location. Computer software and operations of different programs. The tech will also need a firm understanding of the test equipment, how to connect the laptop to different systems, how to interpret signals, how to inject signals into systems for testing, computer software operations, communications, and repairs. An example of the difference between the thinking of an operator and an electronics technician. The operator on a frac unit “Twists a Knob” and watches numbers change on flow display. When the numbers don’t change he calls for a tech. The technician looks at the knob and the display and this is a summary of what goes on in a techs brain. First, is the operator turning the correct knob and looking at the correct display? Twist the knob, does if “feel” ok? What voltage is coming to and from the knob. Is there a circuit breaker? What device is the knob sending its signal to? Is that device programmed properly? Is the device sending a 4-20ma signal to the motor controller? Is the motor turning? Is there a coupler between the motor and pump that broke? Is the pump turning? Are there hose

David Thompson | Mar. 8, 2017
More than once Ive trained my replacement and then been laid off. All the experienced hands are sitting on their nuts and you wonder why you dont have the talent out there. We may be consultants, but we can run them cheaper with fewer problems than all the rookies you have out there. I may be 70, but I can stay up for 36 hours without a nap, these kids think mud engineering is done in front of a computer.

Jimmy Adam | Mar. 7, 2017
COP laid off thousands of employees in last 3 years, now they are say they will face talent shortage? This man must be a moron.


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