Oil companies struggling to come to terms with a low oil price environment are facing two critical issues: how to respond to plunging revenues and how to retain skilled engineers.
Stephen Chazen, president and CEO of Occidental Petroleum, acknowledged at CERAWeek on 20 April that the oil industry has a demographic dilemma. The average age of engineers is mid-40s, but some have more than 30 years’ experience while some have only five years.
“We should be pushing young engineers out in to the field to give them experience. It’s not as efficient as laying them off [to help fulfil severe budgetary cuts] but we must think about the future,” he said.
Shaikh Nawaf Al-Sabah, CEO at Kuwait Petroleum Exploration Company, echoed this. “In the longer term, under-investment eliminates a generation of human expertise. Worldwide there is a lost generation of engineers who didn’t sign up in the 1990s,” he warned. There will be no hires available when the market rises.
The key to attracting young engineers is innovation, emphasised Muhammad Al-Saggaf, acting head of Shared Operations and Services at Saudi Aramco. “A company that fails to sustain innovation in a down cycle will turn young people off,” he said. He contrasted images of drilling rig workers with 3-D software engineers, adding: “The oil industry is giving out negative images. A diverse workforce is the foundation of creativity, which is key to sustainable innovation.”