You don’t need artificial intelligence (AI) to realise that robots are entering the oil and gas industry. Just the regular kind. The sector has a unique blend of need and ability to lead the way in embracing automation and stands to benefit hugely from it. However, with excitement comes fear: what does this mean for the sector’s workforce?
That fear might be exaggerated though – technology will still need the human touch and strangely it’s just that – a human touch – that companies will need to emerge as winners from the industry’s digital transformation.
Automation: a global trend
According to some, automation is the biggest change to the workplace since the industrial revolution. Maybe that’s so; maybe that’s a touch of hyperbole. What’s certainly true is that technologies such as data analytics, AI and robotics are set to transform working practices forever. And the oil and gas industry is in a unique position to take advantage.
Why? Just look at the types of activity most susceptible to automation: repeatable, programmable tasks. Then look at where automation is most desirable: tasks which pose a high risk to humans. The industry has a wealth of roles that tick both boxes.
Think too, about the nature of the sector. This is a generally cash-rich industry living in lean times (but through the worst of the downturn) and looking for new operational efficiency gains to maintain margins. Companies have both the means and motivation to invest in automation.
But importantly the industry stands to gain immensely in terms of personnel safety. Think about the thousands of high-risk tasks where human intervention can be eliminated. And what’s more, this could lead to $300 billion in annual savings, according to the McKinsey Global Institute.
But what of that downside? The threat of widespread job losses and worker displacement? If the future of oil and gas is automated, what happens to the people who’ve operated the rigs, platforms and refineries for decades?
The exaggeration
There are good reasons to think that the job threat – though well-founded – has been overplayed. For example, a recent Bloomberg article suggested that automation in the sector will mean oil and gas wells need only five workers, down from a previous 20.
First, look at other macro human resource trends in the sector, such as the aging workforce. This, combined with a lack of experienced middle-management, has resulted in a significant skills gap: new talent isn’t coming through at the rate we need it to.
For now, things are okay. The downturn has created a surplus of talent. But as a result, many have left the sector and won’t be coming back – they’ve retired, re-trained or found new careers. When the upturn comes, there might be a dearth of talent to fill roles.
With luck, automation will reduce hiring pressure just as the candidate pool to fill those roles starts to diminish. Two macro issues that look like threats in isolation could well be partial answers to one another.
Secondly, there’s the fact that the industry is being proactive in offering re-training to employees where possible. New roles created by automation are largely technology-related. Technical skills training schools have sprung up around the world to help workers transition from physical skills-based roles to more computer and information based ones.
Finally, there’s the fact that companies still need humans to work with the technology that’s being automated. Some will need remote operation, some require people monitoring their outputs, others require programming ahead of each task.
There’s still a lot to be said for human intuition and logic. A machine may be able to handle a repeatable task according to a programmed routine better than a human, but when something goes wrong and it requires thinking on the fly, humans still have the upper hand.
Robots need a human touch
So maybe the sector can be cautiously optimistic about automation. It offers great strides forward in safety, savings, and exciting new roles for the workforce. However, there will be challenges.
If companies want to attract the tech talent that can help them retrain their workforce and manage their automated systems, they need to evolve how they do things.
Whilst young engineers are well aware of the career opportunities in oil and gas, tech professionals are more likely to be dreaming of a job at Google. Hurdle one is to broaden their horizons. Hurdle two is to attract and retain them to the oil and gas sector.
To do this, oil and gas companies are changing their approach to talent acquisition and rethinking their culture. They are broadening their recruitment searches by connecting with, and having a presence in, some of the top tech universities, technical training schools and employment hubs.
A more socially and environmentally friendly company culture could also be a draw. Robust corporate and social responsibility programmes will become more important, as will embracing employment culture changes, such as flexible working.
Get that right, and a company stands a good chance of succeeding in an automated world. Those that adapt too slowly risk being left behind.
The oil and gas industry has a massive opportunity in automation. But it needs the human touch. It needs a human touch to design and operate automated equipment, it needs a human touch in retraining and dealing with job changes sensitively, and it needs a human touch in its talent management to attract the new kind of workers it will need. Put that all together and it seems the shift to robots may not be
Janette Marx is Global Chief Operating Officer at Airswift
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