17 Sep Revamping Your Career for Digital Oil and Gas
Once a week (it seems), someone asks me how they can transition their oil and gas career into digital. As a public service, here’s my thinking on this problem.
The career crisis in oil and gas
I get why people in oil and gas want to transition their careers. The upturn in prices has not translated into more jobs or industrial expansion the way it used to. For example, from my perch in Calgary, I can still see vast emptiness in the form of hollow blue glass office towers. This isn’t necessarily an accident. Oil and gas executives want to keep a lid on hiring because they can’t really tell if the oil market recovery will be strong and sustained.
But this time around, oil job markets are not self correcting as they have been in the past. The normal decline in well productivity would usually trigger more drilling, but instead, the shortfalls look to be offset by ramping production in long stride capital projects like big new offshore wells and new oil sands production, by a shift in emphasis to reservoirs like shale, and by more efficient ways of working.
International competition is hotter. The US, Russia and OPEC, save Venezuela and Iran, continue to max their production so as not to lose market share, and more importantly, to pick up share from the retreating North Sea.
Take a look at BP’s statistical review and it underscores the problem for western oil professionals. The demand for oil has not budged in North America for a decade, yet the US economy has grown by 34% since 2007. Same for the European OECD economies. All the demand growth is in Asia, Africa and the Middle East. The trend is clear—westerners have solved the equation of economic growth without oil industry growth, and will hold this line until electric motors come along to finish the job.
Canadians have it worst of all—we have only the one market for our oil (the US), and that market has quickly become an exporter itself. It won’t want or need our oil, so we have to pay the Americans to take our oil off our hands, to the tune of $40m-$60m/day. The growth markets of Asia are cut off because Canadians can’t seem to reconcile the flourishing of their people with the flourishing of their environment. We have imposed carbon taxes that will make much of the industry uncompetitive.
The career situation is likely to worsen before it improves. Many job categories in oil and gas are vulnerable to disruption by the digital technologies because digital is all about math and science (as opposed to art and the humanities), and oil and gas is very much about math. I can see many examples of where eventual digital solutions will trigger painful adjustments in oil and gas among the privileged professional jobs:
- Equipment operation (trucking, cranes, construction) becomes robotic and autonomous (see Volvo)
- Data interpretation (seismic, reservoir, production) is enabled by artificial intelligence (see radiology, ophthalmology)
- Facilities management (site visits, inspections, routine maintenance) leverages visual sensors to eliminate driving around (see Osprey Informatics)
- Back office (production accounting, finance) fall to artificial intelligence and blockchain (see NAL)
- Product trading (purchase, sale, charters, shipping, receiving) move onto blockchain (see VAKT)
Anyone in oil and gas whose job still looks largely like it did in 2015 is in for a rude awakening, unless they’re prepared.
Digital Blue Ocean
If you haven’t read it, pick up Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne of INSEAD. It’s a business book whose basic premise is that businesses, like sailboats, should seek to avoid crowded and competitive red oceans with a lot of blood in the water, cutthroat pricing, and razor thin margins. Instead, businesses should sail for blue oceans, where there are few competitors and space for expansions is plentiful. It’s a good way to think about repositioning your career as this wave of digitalization in the industry unfolds. Sail your career to the digital Blue Ocean.
Where is there blue ocean in digital oil and gas? I see several unstoppable trends in digital that give strong clues as to what a future of digital will look:
Internet of things
Sensors are falling in cost and will be strapped to everything movable and fixed. They will be able to measure anything, from temperature, speed, vibration, sound, pressure, you name it. They will have thrifty power needs, and will have the smarts to connect to any network for sharing that data.
The amount of data thrown off by sensors is so voluminous that it overwhelms the historic tools (Excel) that oil and gas has used to manage in the past. Only the new and modern tools like artificial intelligence and machine learning have the wherewithal to ingest, fix, process and interpret all the data. Data science as a profession takes off.
Learning machines like robots will be able to take that digested and interpreted data and apply it in a rote fashion. As much as 80% of what we think of today as “human only” work is actually low value repetitive work that robots could do. Robots will take the form of smarter machines as well as software routines for executing work tasks. Robots become professional assistants.
Cloud computing is the only practical solution to connect up all the sensors, house and process all this data, and secure it properly from threats and tampering.
The sensors, the AI machines and the robots are secured using blockchain. Blockchain, and its sibling, encryption, provide the immutable evidence that a sensor, a machine or a robot is trustworthy, executes work, and ties that work back to an owner, an asset or a contract.
These five trends (and there are several others – virtual realities, agile tools, digital ERP, gamification), are all growing much faster than the oil and gas industry, and are in high demand in many industries (agriculture, mining, utilities, logistics, manufacturing) at the same time. Blue ocean conditions for the career.
Digital Blue Ocean Jobs
What these trends imply is that there will be growing scarcity of skills in a wide number of areas, leading to high paying jobs for those with the skills. For example, Amazon dropped many cities from contention as a destination for the second head quarters because of the scarcity of data scientists available for immediate hire. China is already reporting huge shortages of robot operators (millions of unfilled jobs) to supervise all the industrial robots they acquire every year.
By marrying your current deep know how and skill set in oil and gas with the scarce skills of digital, you create a unique and very rare combination. Believe me, the school systems are not (yet) turning out professionals in the petroleum sector with digital skills like agile work practices, coding and data science. It takes time to find the teachers, revamp the curriculum, and obtain the accreditation. But schools are already working on this problem to deliver these new skills to the market. It won’t be long (2-3 years?) before the junior petroleum engineer coming out of school is not only a digital native (they were born with a smart phone in the crib) but they’re able to code, and can apply that digital know how to oil and gas.
Be the career you want
So how do you go about transitioning your career? I’ve shifted my career repeatedly, beginning with a job as a programmer with Imperial Oil, to a 30 year stint with one of the Big Four professional firms, and I’m now on my own. It’s not as hard as it sounds.
Your first step is to pick your blue ocean. In my view it doesn’t matter which digital field becomes your jam. Just pick one as they’re all in demand. The hot area in 2018 is data science, and frankly, it’s just getting going. My selection is digital strategy in oil and gas.
Become a digital oil and gas authority in your field. Take a course or two. The university and college systems are all experimenting with new offerings. Or be “digital” and go the on line route.
Change what you read. Instead of devoting your reading time to keeping abreast of oil and gas developments, subscribe to some sites that have only digital news. There’s plenty. I use Twitter to follow leading digital thinkers and their perspectives.
Discover the key authors in your field, and read up on them. You can find them on YouTube, LinkedIn and blog sites.
Download freeware versions of digital technology and apply it to your domain area. Nothing speaks louder to an employer when you can say “I’ve actually coded a smart contract on blockchain”.
Revamp your on-line presence and your resume to emphasise that you’re not just an oil and gas professional, but a digital oil and gas professional.
Write an article or two that showcases how you would bring digital ideas into your oil and gas domain. Publishing something, even on LinkedIn, makes you instantly credible. Having a point of view gives you something interesting to discuss.
Visit the digital start ups in oil and gas. Most oil and gas towns have a thriving sector in digital innovation, and they’re always looking for fresh talent to fuel their growth. Perhaps your next job is with a technology company rather than an oil producer.
Volunteer at the incubators and accelerators in your town. Calgary has a dozen such creatures, from Nucleus, Zone Start up, The Hunter Hub, Rainforest and Platform. Accidental collisions are one of Silicon Valley’s secrets.
There’s never been a better time to be in energy because of the amount of change coming at it. Now’s the time to reposition your career to thrive.
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