A global survey has revealed that Oil and Gas companies are shifting from the management of growth to the management of risk, and that new technologies and digitalization are critical to driving costs down.
Professional services firm PwC published their 20th CEO survey earlier this year, in which 83 Oil and Gas executives from 39 countries were asked for their insights in key areas including the economy, the impact of globalisation and technological changes.
Now in its twentieth year, the survey discovered that 41 percent of Oil and Gas CEOs are planning to increase headcounts over the next year, while 27 percent are planning to decrease numbers within the next 12 months.
“There has been an era of mega-projects in Australia which have provided a massive injection of investment and jobs to the service provider end of the value chain. As these projects move from construction to operation there are naturally fewer employees required,” said PwC Australia’s, WA Energy & Mining Leader, Justin Eve.
Risk related to geopolitical uncertainty and over-regulation stand out as significant risks for Oil and Gas CEO's year on year; however, the importance of risks related to changing technologies and cyber threats has grown in the latest survey.
“Businesses are contracting with more people including suppliers, alliances, joint ventures, overseas service providers and multiple technology providers, creating a complex system of third party risk which needs to be managed," continued Eve.
Regarding other top threats to stakeholder trust, Oil and Gas CEOs also see risks from the use of social media (82%) and breaches of data privacy (80%) as threatening.
“Resource companies traditionally haven’t been proactive in leading messages to the public. Oil and Gas companies have a tremendous opportunity to study other sectors and learn how they leverage communications and social media for their benefit and not just for defence.”
Growth & Cost Reduction
Compared to other sectors, Oil and Gas CEOs are more confident of the global market but less confident of their own companies growth.
“Across all sectors, there was a preference towards organic growth; however cost reduction was the key driver for growth in the Oil and gas industry.
"One thing that a lower oil price does is focus a company's attention on their cost line, therefore, changing the focus onto cost reduction and greater efficiency through technologies such as automation,” said PwC Australia’s, WA Energy & Mining Leader.
Just one-half of Oil and Gas CEOs surveyed thought that automation and other technologies would be the cause for a decrease in headcount.
“As Oil and Gas providers try and optimise their cost base then there is a reason to increase the number of people who will manage and oversee changes in technology and who will add a digital element to traditional roles.
“Operators are unquestionably aiming to increase the number of smart people who will manage the strategy of that change, however much of this will be handled by third parties, which creates risk especially in areas related to contract management,” continued Eve.
Preparing the next generation of employees
Technology can help drive efficiency and open up opportunities for companies however only five percent of the Oil and Gas CEOs interviewed think that technology will cause decreases in headcount to a large extent.
“The workforce has had challenges for decades, but we often underestimate people's ability to learn, adapt and stay relevant within an organisation.
“You don’t need to be a coding or robotics expert to take advantage of these technological advancements. Being familiar with what the technology can do to improve your work is more important than knowing the in’s and out’s of how it does it.”
For more information on the 20th PwC CEO Survey visit www.pwc.com
Friday 9th June 2017