Letter from Houston: OFSE gears up for the challenge
The sector is transforming towards a more digital, lower-carbon energy future
The oilfield services and equipment (OFSE) sector has, like most of the world, been in turmoil this year because of the triple impact of the oil price war, Covid-driven demand reduction and the resultant oversupply. These factors combined to bring cuts in production, capex and employment.
New research of the economic activities of OFSE companies, which include oil and gas extraction, construction and manufacturing, by the Petroleum Equipment & Services Association (Pesa) shows OFSE employment in August was down by 121,000 jobs from the same month in 2019. Our analysis shows that 103,000 of those lost jobs are attributable to the pandemic. In Texas, OFSE employment is down by 59,000 year-on-year, of which 51,000 are Covid-related.
With nearly half of OFSE jobs located in Texas, and many OFSE companies headquartered in Houston, the region has suffered under the cumulative weight of the pandemic’s economic drag. But, in recent weeks, some good news has emerged.
Rig counts are edging up, oil prices have stabilised and employment losses have flattened. We still face continued uncertainty around economic recovery—especially as Covid-19 cases are rising in parts of the country—but increased activity is encouraging.
While the sector is hurting, it has proven to be remarkably adaptable and resilient throughout its history
While the sector is hurting, it has proven to be remarkably adaptable and resilient throughout its history. OFSE has always been at the vanguard of innovation and technology implementation. We are seeing that again, even during this downturn.
And our sector will be at the forefront of the transition to a lower-carbon energy future. We are seeing an acceleration of changes that were already underway.
OFSE companies are rapidly developing and deploying solutions around remote capabilities, big data, the internet of things, virtual reality, 3D imaging and more. We do not have to dream about the day when an engineer controls operations on a rig in the Permian from her home office in Houston—it is already here.
Technology is shifting what companies need from future employees and changing the composition of the OFSE workforce. As these trends take root and grow, they will also create new opportunities for employment and advancement in the Houston region.
Because of huge strides in digitalisation, the OFSE workforce of the future will be leaner and highly technical. There will be great opportunities for computer scientists, data analysts, engineers, programmers, designers and more. The OFSE sector will be home to high-tech, high-paying jobs.
That means our industry must recruit innovative men and women who can lead us to a new energy future. Houston is America’s most diverse city, and shifting trends in the OFSE sector present the opportunity to tap into that wealth of talent.
Pesa has been working in this area of strategic importance to the sector. In 2018, we published our groundbreaking gender diversity study, which showed that women held only 16pc of OFSE jobs. Building on the report, we created a toolkit to guide members in measuring where organisations stand on the diversity and inclusion (D&I) journey, with specific actions companies can take to make sustainable and meaningful change.
The push to make that future cleaner and more efficient will be led by the OFSE sector
We are currently in the midst of Pesa’s D&I business champion programme, which guides participants through the process of developing action plans to initiate change within their companies. The curriculum contains a specific focus on racial equality and was re-opened in mid-session so even more members could participate.
It is critical to our long-term future that we attract the brightest and most talented people, and in our best interest to cast the widest net possible. In addition, research shows that companies with a commitment to diversity perform better in terms of gaining market share and higher profitability.
With energy demand rising around the globe, oil and gas will be part of world’s energy mix for the foreseeable future. The push to make that future cleaner and more efficient will be led by the OFSE sector, which is largely headquartered in the Houston area.
Pesa is confident that game-changing new technologies will be developed by OFSE engineers. The sector may look different in the coming years, but our ability to deliver world-changing technology at global scale is a constant.
Leslie Beyer is president of the Petroleum Equipment & Services Association (Pesa), the national trade association for the OFSE sector, representing nearly 700,000 jobs in the technology-driven energy value chain.