OTC: Speakers Call for Investment in Staff, Technology

Source:

"I'm scared we'll lose young talent."

Operators and service companies must continue to invest in developing innovative exploration and production technology and retaining staff during this industry downturn, panel speakers agreed at the Offshore Technology Conference in Houston.

Chad Deaton, chief executive officer of Baker Hughes Inc., said service companies have laid off 23,000 workers this year. "The workforce increased by 64% from 2006-2008 by the six largest companies, but there's a real danger that we'll do cuts, especially in younger engineers—this would be the same mistake in the last cycle, and I'm scared we'll lose young talent."

Deaton's views were echoed by Amin Nasser, Saudi Aramco's senior vice-president of exploration and production. "We've been through many cycles before in the industry, and my concern is that we'll have layoffs and reduced hiring—the brightest and best students and talented individuals have left the industry. We need to keep the graduate line moving, keep recruitment, and get people on courses." Aramco is sponsoring 2,000 students worldwide in petroleum courses at universities.

Deaton said this downturn is different compared with those earlier depressions in that the oil price has fallen rapidly from a record high of $147/bbl last July to the $50/bbl range in early May. This was also coupled with a global economic recession, a collapse in oil demand, and the impact on rig activity was great.

Cutting carbon emissions is now a priority, and trading carbon will be an important business in the future. Despite pressure from environmentalists to increase the usage of renewables in the energy mix and the anti-oil stance from President Barak Obama's administration, speakers agreed fossil fuels will be the dominant source of energy for several decades. Renewables cannot be scaled up to plug this gap, and they too require huge investments to bring them to market.

Nasser said: "Alternative energy is a welcome addition, but it needs more efficiency on the consumer side. It's been over-exaggerated in its impact, and even under the most optimistic scenario we will need 105 million b/d of oil over the next 20 years: We need to invest in additional capacity."

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe