November 2020

Drilling Advances

The blunt truth
Jim Redden / Contributing Editor

One would assume that it would be somewhat ill-timed to explore how to attract and motivate future talent in a pandemic-wrecked year, which has put hundreds of thousands of oilfield employees on unemployment rolls worldwide. Yet, Chevron’s Kim McHugh said now is precisely the time to get on board with an evolving workforce transformation that will require wholesale behavioral modifications and a makeover of the employer-employee relationship.

“The transformation taking place in our industry, and the world for that matter, is real and vitally important,” the Chevron vice president of drilling and completions said during a virtual technology forum, held less than three weeks before the Oct. 5 closing of the $13-billion Noble Energy acquisition. “We’ve all gone through some difficult decisions during this pandemic, relating to people and jobs, which has hurt our industry’s reputation with universities, communities and employees. The way we treat people and attract talent is more important now than ever before.”

McHugh was among the participants in a Sept. 15 IADC Drilling Engineering Committee (DEC) quarterly forum that deviated from typically intricate technology evaluations to a psychologically infused examination of “Transformational Leadership.” The forum was billed as an opportunity to discuss “the drivers that are changing the industry’s operational leadership structure and approach, as well as discuss best practices for adaptive and transformative leadership.”

For her part, McHugh gave a frank assessment on how an “irreplaceable” industry stacks up in today’s corporate environment. “Our industry is under attack as the bad guy. We are competing for investors with the shiny tech industry and, frankly, we’re losing,” she said.

“It’s been a very tough time for offshore drilling and oilfield services in general,” added Valaris Plc Senior V.P. of Business Development Alan Quintero. “By some calculations, we’ve lost 1.7 million years of experience just in the U.S. oilfield service industry.”

Quintero’s DEC presentation came less than a month after the world’s largest offshore drilling contractor joined, at last count, no less than two peers in seeking Chapter 11 protection, with the lines into bankruptcy court growing amid the relentless Covid pandemic. In the U.S. alone, some 40 oil and gas-related companies had filed for bankruptcy by the third quarter, according to corporate law firm Haynes and Boone.

Workforce coalition. The current bust has added an exclamation point to the industry’s notorious hiring and firing cycles, which unlike previous downturns, is not driven strictly by supply and demand imbalances. Though of little consolation, universal Covid-provoked demand destruction has taken some of the spotlight off the massive, and growing, oilfield layoffs, says Hess Vice President of Energy Workforce Transformation Evelyn MacLean-Quick.

“We’ve been known, and stood out, for our boom and bust cycles, and that has turned people off. There’s been a glimmer of hope recently where other industries have also suffered some real setbacks as a result of the pandemic,” she said. “We’ve never had a slump with a pandemic before. And we can’t solve this slump through the lens of how we’ve solved them before.”

Since February, MacLean-Quick has spearheaded an initiative “to test the appetite” for forming an industry-wide coalition to tackle future workforce needs. API and others have expressed interest in supporting the idea, she said, adding that company representation in the proposed coalition is welcomed. “Producers and service providers would have an equal voice. The purpose is to unite on the challenges facing our industry and build a roadmap that will ultimately see the changes required that will underpin our needs for the workforce of the future,” she said.

She and fellow presenters reiterated the age-old lament that the industry has an image problem and one that is exacerbated when trying to attract younger and more digitally savvy employees, many of whom come to the workforce with markedly different values and expectations than their predecessors. “We are becoming less and less appealing to the younger generations,” MacLean-Quick said. “Some of that may be due to a lack of understanding of what we do and some of that may be due to the fact they see better and brighter opportunities elsewhere.”

The industry would go a long way toward altering an image long perceived as inflexible by loudly promoting the growing emphasis on automation and associated technologies, accelerated by Covid lockdowns and the near-universal turn to remote operations. “It’s amazing what a pandemic can do to make us more willing to change how we do things through technology,” says Chevron’s McHugh.

Bottom up. Above all, however, the boss-employee relationship of the past must go the way of fishtail bits. “The leadership style of the past will not work going forward,” McHugh said. “Gone are the days of command and control, with the boss having all the answers and, to quote, ‘do it this way because that’s the way we’ve always done it.’”

Perhaps nowhere is that style change more imperative than in the traditionally dictatorial rig site hierarchy, says Quintero. “The old days of I’m going to tell you what to do and you better do it, and if you screw up, I’m going to run you off, have to go away. You have to give people room to fail in a safe environment. You have to influence,  rather than tell, and give the people who are still in our industry the ability to learn leadership to fill the holes in the future.”

“Transformation leadership is no longer an option; it’s a necessity. Effective transformation does not cascade from the C-suite. It should be a bottom-up approach.”

About the Authors
Jim Redden
Contributing Editor
Jim Redden is a Houston-based consultant and a journalism graduate of Marshall University, has more than 40 years of experience as a writer, editor and corporate communicator, primarily on the upstream oil and gas industry.
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