For almost two years the oil and gas sector globally has been facing one of its worst downturns in history. Many of us will have all seen first hand the impact this is having on jobs in Scotland.
Through the Energy Jobs Taskforce we are doing everything we can to minimise this and ensure the industry retains its people, skills and expertise built up over the last 50 years. The way companies interact with each other and with their employees will be one of the key factors to achieving success and where the importance of principles and values comes into play.
In May 2015, the Taskforce brought together, for the first time ever, senior industry leaders from all areas of the industry – supply chain, operators, contractors, trade unions, safety representatives, regulatory/trade bodies and government agencies – many which span right across the UK. At that time the oil price had dropped to around $65 and we estimated around 5,000 jobs had been lost mainly at operator and contractor level.
Faced with some of the toughest challenges, the industry needed to consider how it could work together better to ensure its long term sustainability. Behaviours and cultures within the industry needed to change if it was to come out of the downturn stronger and more resilient than before.
For this to happen, however, it needed leadership, driven at senior management level. Our May event kick started this journey and provided a platform for an open and honest discussion about what the challenges were and how they could be overcome. Everyone committed to working closer together to help resolve issues and find new and better ways of working.
A year down the line and we’ve seen some strong progress – a new Oil and Gas UK industry behaviours charter was launched in December and recent evidence from them shows collaboration between supply chain companies and operators has improved.
In addition, some of the larger service companies now meet regularly to address some of the issues flagged at the event. And the number of efficiency stories emerging is testament to the new improved ways of working.
That said, there’s still a way to go. I continue to hear the same conversations and frustrations repeated time and time again… too much focus on cost cutting and not enough on value, the role of the supply chain in helping to achieve cost effective solutions isn’t valued, short term decisions being made with no thought to longer term impact and a continued concern about lack of trust. These issues can only be resolved if we communicate, collaborate and take actions that often we know need to be done but it can, at times, be easier to maintain established and sometimes sub optimal working practices.
In May this year we organised a second event attended by over 70 senior leaders, many which attended the first event. The energy in the room was amazing leaving little doubt of the importance oil and gas leaders are placing on this key area. Through lots of interaction and honest discussions we managed to get behind some of the real barriers to change and a strong sense of commitment and ownership to drive this essential work forward.
Two themes emerged, in particular, from these conversations. One was the desire to create a compelling need for change that motivates and inspires employees, customers and suppliers – as well as young people who will be an essential part of the industry’s future success. The second was the need for effective engagement with both the offshore and onshore oil and gas workforce – something that everyone agreed on – and a strong appetite to do this differently and with more impact.
Work is already underway to progress these key actions by a combination of people and organisations including Trade Unions, the OGA and OGUK.
We know this transformational change isn’t going to happen overnight but we all have responsibility to lead and be part of the change – and addressing cultural and behavioural aspects will put us a long way on the path to a successful future.
Maggie McGinlay is the energy director at Scottish Enterprise and member of the Energy Jobs Taskforce Shared Principles & Values workstream.