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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. (source: Rigzone)