Tough times – but no complacency

Elaine Maslin

August 1, 2015

In today’s climate, helping the next generation understand the importance and longevity of the oil and gas industry is more important than ever, says SPE Offshore Europe co-chairman Charles Woodburn. Elaine Maslin explains.

Charles Woodburn, Expro Group CEO.
Photo from Expro Group.

When the organizers of this years’ SPE Offshore Europe picked the theme, “inspiring the next generation,” oil prices remained high and the need to attract talent was at the top of the agenda.

It could be surprising, then, that after the precipitous oil price fall from US$100/bbl down to $50/bbl and with the market expected to remain tough into 2017, the organizers still believe it is the right theme for this year’s event.

Charles Woodburn, SPE Offshore Europe co-chairman, and Expro Group CEO, is unapologetic in his belief that as much needs to be done now, if not more, to attract people into this cyclical industry, so that when activity once again returns, it will have the talent it needs. “Our view is that ‘inspiring the next generation’ is as relevant as ever,” he says. “It draws into stark contrast the challenges we face around encouraging youngsters in to our industry.”

“We know the market will recover as supply and demand rebalance, and that is a matter of timing. What is key, in any cyclical industry is flexibility, but there are hard choices to be made since downsizing in the short term means a reduced capacity to respond when the up cycle returns. It is a delicate balancing act. When you recruit people, it normally takes at least 12-18 months before they are working autonomously. But we need to ensure we will be ready with a pipeline of talented people, bearing in mind these time frames. In terms of up cycle visibility, we are not there yet, but we are watching very carefully.

“My personal view is that this year is going to remain tough and [given the time bidding activity takes to translate into real activity] it is going to remain so for the remainder of this year and well into next year. At the back end of this year and in to next year, there could be some rebalancing of supply and demand, which should give some form of confidence around a recovery going into 2017. But, crystal ball gazing is never easy and there is wide debate about what the new normal will be.”

The challenge around being the right size at the right time will be one of many to be discussed at Offshore Europe. Others include how to find efficiencies and standardization, and where lessons can be learned from other industries or even different segments of the global exploration and production business.

“The industry has a huge capacity to reinvent and innovate, especially in challenging environments. But, at the same time, there are plenty of areas for improvement,” Woodburn says. “A case in point is the rapid development of unconventional and tight oil and gas. A lot of lessons were learned there that can be applied in the offshore industry, such as standardization and efficiency. Having seen the oil price come down, a lot of deepwater developments with marginal economics would benefit from similar improvements in standardization and efficiency.”

Technology which can extend, enhance and increase recovery rates, cost effectively, is also high on the agenda, such as more cost effective subsea interventions and more economical well construction, Woodburn says.

For Woodburn, while it could be easy to say, that ‘despite the challenging back drop, SPE Offshore Europe is an excellent opportunity,’ it is because of the challenging back drop, it is a great opportunity, “to get the industry together to have a constructive debate and discussion about all the issues we are facing, like the timing of a healthy recovery and how to recruit and attract the talent we know we are going to need again.”

“Most commentators say that mid this century, three quarters of our energy will come from hydrocarbons – oil, gas and coal – still. We have a tremendous responsibility for energy security and supply, which in turn impacts global economics. It is a huge challenge for us all and we need everyone to be aware of the key elements of that. Getting youngsters to appreciate that and the longevity of this industry is key.”