The Future of Work Dr Eberechi Weli Director – Absolute Risk Technology (ART)
What lies ahead? From Jan to March 2020 - total value of contracts was only 27.6% of what it was in the three previous months - operators slashed more than $85bn from projected spend (Coronavirus)
What future? 1
Global estimation of layoffs for 21% of the worldwide workforce (Rystad)
2
North Sea workforce has fallen by “nearly 40%”. (RMT Union).
3
worldwide oil spending decreased by $35.4bn (Global Data)
Case Study – Operator 1
Operator trims Crude Price forecast – predicting 30% reduction in price until 2050
2
Operator files for insolvency with $7bn outstanding debt
3
Operator’s growth of 6% whilst on the previous year whilst operating costs grew to 17%
4
Operator initially intended to spend between $1.3bn and $1.6bn in 2020, down from $2.25bn in 2019. In May, it formally withdrew these
Co. 1
2
Reducing overhead and project support costs by at least $100m in 2020 and by up to $200m in 2021 Conserving cash and liquidity by reducing capex by 40% and suspending the 2019 final dividend
3
Reducing and structurally rebasing salaries and allowances for the board, senior management and most of our employees by between
3
10% to 15% Reducing personnel by circa 20% and furloughing staff in anticipation of a reduction in activity levels
How do we proceed? More than 80% of assets would be able to cover their operational spending………..crucial that the industry remains competitive in order to attract the investment that will be required to re-stimulate activity.” OGUK 1
Collaborations / Partnerships
2
Automation
3
Reskill Retrain Retain
Collaborations / Partnerships 1
Technology Partnerships
2
Finance Partnerships
3
Flexible Contracts Partnerships (Ops-Service-Persons)
4
Multi-Industry Partnerships
5
ESG (Sustainability, Net-zero Greenhouse Emissions) Partnerships
6
‌and the part of the slide they're editing.
Risks to Existence
[NAPE]
1
Declining exploration activity and depleting oil reserves
2
Inefficient contract and procurement awarding process
3
Oil theft (breached pipelines surging by 115 percent, June – July 2019)
4
Illegal refining
5
Procurement and contracting cycles - 36 months on average
6
Security (Remote Monitoring)
Disciplines
Offshore Personnel
Restart to Never Normal? - Old Normal? - New Normal (2006+) [McKinsey]
- Next Normal (2014+) [McKinsey] - Decade of Never Normal (2020) [Accenture] - As a Time Series of Starts, Stops and Restarts
Areas of Concern? - Market Demand? - Is the Market still there? - Can your Customers pay? - Are your Suppliers still there? - Restarting the Supply Chain - Risk Analysis, Gaps, Restoration - Restoring Capacity and Capability - Non-contact Commerce
Areas of Concern (Business Continuity)? - Open Discussions – A new mindset? - Risk reduction is key: What is your risk profile? - Identify your ‘Operational Context’ (Confidence and Uncertainty) - Undertake Risk Assessments - Identify Vulnerabilities, Barriers and Resilience - Compare your Operational Models with the Economic Climate - Identify your Dependencies • Suppliers, Customers, Supply Chains and Logistics - Can you survive ‘least cost’ and still be compliant?