The low oil price is redefining the worldwide oil and gas industry, sharpening the focus around cost and efficiency and challenging current practices. This presents an opportunity to explore the way in which competence and safety are delivered to ensure the global workforce is fit for the future.
From the UAE to the North Sea, West Africa and the Gulf of Mexico, declining oil prices have hit the upstream oil and gas industry hard. While some countries in the Middle East have enough financial firepower to respond gradually to the plunge in global crude prices, many CEOs in the region still believe that governments must work with industry to prioritise the creation of a skilled and adaptable workforce to meet the growing needs of the oil and gas industry – a key driver for growth.
Collaboration between industry and government is vital, but perhaps more important is the need for the industry itself to challenge current thinking on the regulation, maintenance and delivery of safety training and competence standards.
We must continually question why we do things the way we do, making sure we learn from the lessons of the past and change mind-sets in order to reshape our approach.
Critically, we must continue to ask whether the accreditation, delivery and content of skills training and workforce development is appropriate not just for today’s challenges but also those we may face tomorrow.
As the industry’s partner in safety and competence, OPITO has a pivotal role to play in influencing industry thinking on skills and competence, making sure we are indeed fit for the future.
The challenge we face comes across a number of fronts: the economy, technology, psychology, and knowledge.
It’s a familiar cycle. Commodity prices go down, jobs are lost and skilled workers begin looking for career opportunities elsewhere. This indiscriminate slash-and-burn response serves only to store up trouble as it fails to distinguish between short-term operational and long-term strategic needs. In 15 or 20 years’ time, the industry is left with a shortage of people with the right skills for the job.
The oil and gas workforce has seen tens of thousands of jobs cut in the last 12 months. According to some sources, as many as 200,000 people were lost in the first six months of the downturn alone.
It’s true that the oil and gas industry is facing challenges like never before. Globalisation, geopolitical events and environmental change influence and affect us more now than at any other time in our history.
I firmly believe that the industry will adapt as it always has done and will deliver long-term sustainability through greater collaboration, partnerships, innovation, invention and improved efficiency with new technology and processes. Indeed, a paradigm shift is already underway, where smart businesses know there is opportunity in reinvention.
Yes, the cyclical nature of our commodity driven market dictates that where there are highs there will always be lows. However, there will always be a basic fundamental need and a moral obligation to keep people safe by ensuring they are skilled and competent.
Nothing changes during a ‘low’ period in the cycle, risk remains the same and a sustainable supply of a safe and skilled workforce is still a priority. Doing less means an increase in risk to people, business and the environment, alongside the unintended consequence of a future skills gap which leads to damaging cost inflation when demand outstrips supply.
We should never waiver from these basic principles but, as an industry, we must change the way we think about how we set standards, train people and assess competence. What we have done in the past and what we are doing now may not be appropriate for the workforce of the future.
Forward thinking, driven by a real analysis of industry’s future needs, can create a safety and competence environment that is fit for the future.
An individual’s ability to show they have the practical skills and knowledge to carry out a task safely, at an appropriate pace, consistently and within the level of responsibility given to them, is absolutely crucial for ensuring that the oil and gas industry has a developed workforce that can accommodate growth when the time comes.
A key characteristic of the workforce is its highly globalised and transient nature. Work teams will typically contain members from a wide variety of territories and company backgrounds, who will have received training of an equally varied nature and standard.
Technological advances drive constant changes to industry skills requirements in terms of what roles we require people to carry out and the framework for how they do it. But technology also has an increasingly important role to play when it comes to retention of knowledge during training and ensuring workforce competency.
There is no doubt that technology is transforming the way we learn and work. The evolution of digital learning and access via smart phones or tablets brings with it the opportunity for managing the demands of a global industry with an international workforce, which needs to move easily between geographic locations and markets depending on where they are required.
Advances in learning technology also mean that companies can provide excellent training within lower budgets, with increased knowledge retention and improved competency; ensuring the right people have the right skills for the right job.
But how can we harness the opportunities digital learning technologies offer to ensure we’re not just reactively training people for the needs of today; rather, that we’re proactively taking the steps needed to safeguard the skills, knowledge and competencies we’ll need for the industry of tomorrow?
Over the last 50 years there have been a number of high profile disasters that have left a permanent mark on the global oil and gas industry psyche.
Strong safety cultures have the single greatest impact on incident reduction. It is vital that everyone throughout the offshore and onshore chain thinks about and fundamentally understands the reasons for their actions.
It is equally important that every worker has the tools, confidence and communication skills needed to speak up and react to a changing environment where simple human error can have drastic consequences.
Across a great many companies a huge amount of work has been undertaken in recent years to foster a working environment in which everyone feels responsible for safety and pursues it on a daily basis.
Sadly, many people work under a false sense of security and carry out their job without knowing the logic behind the rules and regulations. “Why am I doing this? Because the checklist tells me to” is a phrase that should have no place in a safety-critical sector, but illustrates clearly the difference between a good safety culture and an excellent one.
This is the challenge for business leaders, turning safe behaviours into subconscious actions. How many offshore workers, who spend their days bound by safety rules and regulations, go to the effort of wearing safety goggles when carrying out basic DIY work at home?
While the wider consequences may not be the same, the risks to personal safety are. A simplistic example yes, but an effective illustration of the difference between people carrying out an action because they are told to do it and being driven by instinct and in-bedded culture.
Safety culture can be enhanced by positive reinforcement of superior safety performance. Identifying people who are doing things right and rewarding their safe actions is more impactful than punishing employees for doing things wrong.
Strong leaders understand the psychological concepts that drive safety and influence behaviour. They are able to develop safe subconscious habits and know how to foster them in others; and they understand how the questions they ask can set and change cultures.
This is an area which we can all benefit from exploring further.
The final piece of the jigsaw is knowledge. The world is made up of two different types of people: those that hoard knowledge and those that share it.
Knowledge drives innovation in business, successfully leading organisations through times of change or challenge. Looking beyond the experience of our own industry and considering the approaches taken and lessons learned in other environments offers the potential for breakthroughs we may never otherwise achieve.
When it comes to skills and safety, the oil and gas industry is amongst the best in the world. At a time when costs are increasingly scrutinised and companies are under pressure to deliver the same or even better results with a smaller workforce, however, understanding how others strengthened their supply chain, collaborated and pursued standardised operations will help us all stay competitive in a global market.
Interestingly, this needn’t be limited to other safety-critical sectors. Many other cyclical industries have adapted and evolved in order to emerge successfully from their own form of downturn. Those who have successfully transformed themselves have proactively looked at exploiting new partnerships, exploring new technology systems and seeking out channels that allow them to reach out to and engage new audiences and customers.
The oil and gas industry has entered a new dawn. The past is set in stone and cannot be changed, but we have the power to use the learnings from the past to reshape our future. The oil price will continue to fluctuate but what we do today could reset the skills and competence landscape to cope with the highs and the lows.
$40, $50, $60/boe – it is impossible to predict exactly what will happen to the oil price in the months ahead, but it’s looking increasingly certain that the general direction of travel is up.
We don’t need a crystal ball to predict what will happen in the future if we don’t make the right decisions now when it comes to ensuring the competency of the workforce. History shows a clear correlation between poor safety performance and a global downturn. Looking at the previous lows in 1986 and 1999, figures from the International Association of Oil & Gas Producers tell a sorry story, with a significant rise in the number of incidents and accidents.
We should always be wary of interpreting statistics in isolation and until now it has been too early to say anything tangible about safety performance during this latest downturn. Instead, we have urged companies to implement robust strategies that look at the long term, we have backed those who have avoided seeking to gain some small measure of fiscal balance by cutting their investment in safety and skills development; and we have cautioned industry that hazards and risks remain the same regardless of the oil price.
And it seems we have learned from the errors of the past in this respect. While we are seeing fewer people working across the sector what we are not seeing, by quite some way, is any reduction in the industry’s commitment to invest in the safety of its workforce.
Rather, we are currently on track for a record number of new overseas approvals in 2016. From a target of just over 50, we are expecting to top 108 by the end of the year. This increase comes across both basic training and also specialist fire-fighting, lifting operations and OIM programmes, with particular interest from the US and West Africa, some of which is virgin territory for us.
It is happening because the market is demanding its people are trained to globally recognised standards. That, at a fundamental level, is what has changed between this and previous downturns. We now have a standards-based approach to training and competency which simply didn’t exist before.
This is one way the industry is successfully making itself fit for the future, it’s time we work together to take it even further.