Could the sharing economy hold the key to the oil and gas resourcing challenges?

The sharing economy has found a solid footing in many industries. The success of Uber and Airbnb are just two examples where technology has enabled the meteoric rise of these on-demand superstar brands.

In the oil & gas industry, competent people will be paramount to extracting hydrocarbons in a safe, efficient and environmentally sound manner for many years to come – the recent challenges have proven that it’s never been more important to have a highly skilled team. And, when field production ceases, we will again need highly skilled professionals to plug and abandon all the wells.

With fewer people in the industry, it is perhaps time to adopt parts of the philosophy of the sharing economy.

A flexible approach

Those of us who have been in the petroleum business for some years are used to the rollercoaster rides of the oil price. Booms and busts lead to frantic hiring and firing of people. The supplier industry has been in a slump since the oil price dropped in 2014, and consequently, we have seen very competent people leave the industry altogether. Many have taken early retirement or respecialised. Large scale projects relying on senior competency are experiencing scarcity.

The price of oil & gas will continue to fluctuate, so the industry needs to introduce as much flexibility as possible into the way we structure our workforce. The ability to empower people at a local level has been a key contributor to the success of the major sharing economy brands.

A digital advantage

Traditionally in the energy industry, knowledge has remained locked in individuals’ minds, and as they leave the industry that knowledge is lost. With new digital solutions being implemented in the industry, E&P companies are taking ownership of their own data and experiences. This enables new and more efficient ways of onboarding, people rotation, and sharing of resources.

All companies need a core of fixed employees, but with digitalisation, enhanced knowledge sharing and remote working methods, fluctuating capacity requirements should be filled by consultant manpower or outsourcing.

This would lead to a range of benefits both for the companies and their employees:

• Faster up and downscaling. The cost and time needed to recruit combined with the risk of an unsuccessful outcome, are significant and lead to delays during the upturn. Similarly, the processes of adjusting the human capital to the actual workload during a downturn is a painful process requiring significant attention and cost. With a larger use of consultants, much more flexibility is gained.

• Sharing the up and downside. Permanent employees have mainly fixed salaries. With a highly volatile oil price, the lack of flexibility of the cost base leads to lost opportunities. By using consultants and outsourced services, personnel costs can quickly be adjusted. Rather than being unemployed during troughs, consultants can adjust their salary downwards and retain their jobs, recovering through higher paid jobs during peak times.

• Safer and more efficient delivery. Intelligent data management ensures that critical knowhow is retained and shared. Teams are aligned around trusted sources of information and are better placed to work remotely. This combined with a blended approach to resourcing that combines direct hires with outsourced specialist roles reduces inefficiencies and project risks.

• Better utilisation of resources. With fewer senior personnel available, the industry needs to share resources. By making sure that competent people can fluctuate between jobs and companies, we contribute to better HSE, higher efficiency and more environmentally friendly solutions. If seniors are locked in at the company they have always been at, the industry at large is missing out.

The sharing economy shows us that a flexible approach to resourcing combined with the enhanced efficiencies of digitalisation can deliver significant benefits to our industry. The transition to low carbon energy sources is necessary, but not easily accomplished on an individual level. By enabling the flexibility to operate both with direct hires and consultants, we are to a much larger extent enabling individuals to switch back and forth between traditional and greener energy. This allows a smoother transition and empowers knowledge sharing across the sectors.

About AGR

AGR is a trusted partner to the global energy industry with the experience, scale and breadth of knowledge to help address the energy challenges of today and tomorrow. It is an end-to-end provider of decommissioning, exploration, production and transformation services, and offers software and consultant manpower for hydrocarbon and low-carbon projects. As part of the Akastor portfolio, which forms the Aker family, AGR brings the right combination of technical expertise with a commercial focus, proven track record for excellence and robust project management to help our clients achieve their ambitions.