My first memory of the so-called “Big Crew Change” starts in 2009; the year of my… fiftieth birthday. The median age of the Society of Petroleum Engineers (SPE) membership was… 50. Behrooz Fattahi was then SPE President and he had been kind enough to visit the freshly created Geneva section. His talk included the graphics below, showing that half of the SPE membership was due to retiring in the 10 to 15 years to come.
Moreover, with a demographic gap around 40, the industry was in need for fast educating and incorporating fresh blood and brains who would be able, within a few years to take over from the old guard.
All sorts of explanations were then debated on the reasons that had led to that situation: previous crisis with massive lay-offs, hiring stagnation periods, lack of attractiveness of the industry, insufficient benefits, etc. The near future consequences were depicted in the press as dramatic: undersupply of energy, loss of critical knowledge, rise oil and gas related accidents, wars for resources, etc. Plans to prevent the collapse of the doomed sector were suggested and often put in practice: increase in petroleum department admissions, improvement in compensation and benefits, SPE ambassadors sent to universities, establishment of Student chapters and encouragement of young professional sections, studies and reports by consulting groups, use of local content in certain countries, etc.
For the old timers such as me, it was a fantastic time. With all the companies fighting for talents to secure the long term of their organisation, everything to attract experienced folks was utilised. The self-proclaimed “talent-acquisition-specialists” were sent into dervish spin, phoning the world over to poach resources wherever they could be found. Petroleum engineers became Divas, returning phone calls promising attractive offers. A new job barely landed, a new proposal would come in, with greater benefits and in a better location.
I was in the middle of that big SPE membership hump, in the heart of the action (for once), I must have been at least partly responsible for the situation. Like many other SPE officers, I went bravely to universities to promote the oil and gas industry, to lecture about the exciting opportunities ahead for the young professionals. Oil and gas was the place to be in, with international careers, above average salaries and advanced technology. As SPE volunteers, we encouraged students to join petroleum engineering departments, we supported the creation of SPE student chapters. While we were the smartest and the most wanted ones, with the eyes mesmerized over a bright horizon, at no time did we perceive the slightest clue announcing the current downturn!
Something must have gone wrong! Of course, the situation is complicated, we did not anticipate the excess of hydrocarbon producing capacities, the economic slowdown, the sustainability of oil shale operations, and the current geopolitical struggle. Neither did we anticipate that this change would be so sudden and that the reaction of the industry players would be so dramatic. Today, after 2 years in the debacle, we are still bewildered by the duration of the crisis and we have become fearful at forecasting any outcome that would make sense or had any reasonable chance of eventually happening.
So what happened to the huge crew renewal that was supposed to turn the world upside down, opposite to the big of crew shrinkage that we are living today? Is that the “change” that we were supposed to experience? And is this unprecedented downturn the lone responsible, or did we, the SPE and industry alike, seriously lacked of discernment as well?
On Berhooz' graphics, we notice that only percentages are represented, and percentages are not enough to get a clear picture of the reality. Of course it was showing that a good proportion of the population was due to retiring shortly, but if the critical mass of youngsters was enough, it did not necessarily mean that lots of knowledge would be gone. To understand better the situation, I fetched the 2008 statistics from the SPE membership, and I got the graphics below:
It shows that more than half of the SPE membership was from North America. For historical reasons, North-America was over represented in the SPE petroleum engineering demographics. How come was the Middle East less important than Europe and Africa so small? Were these data really representative of the global industry’s demographics? It is doubtful!
When looking more closely at the age distribution, I found that the most represented regions in SPE membership were also those of the ageing population, thus skewing the distribution toward the more senior workers.
The average age could have been higher where the members choose to live a quieter life, to high-school their children or to settle before retirement. All these critical data were missing. However, rather than a global demographic crisis, the industry may well have been experiencing a geographical move from traditional oil regions toward new places. Admittedly in 2008, the shale gas and oil business had not yet swung into high gear, thus reorienting part of the work force back to North America.
It was also interesting to look at the historical data that showed that in fact, for the previous ten years, the average membership age had been decreasing almost in all regions.
The interpretation of this fact is not straightforward in absence of additional data: had the industry already been changing the crew over the last ten years, was SPE more attractive for young professionals, were the student chapters included in the statistics or was it the effect of older people retiring? Nothing was clear in the Big Crew Change theory.
Nonetheless, a lot of excitement started to float around, stirring the pot of universities’ petroleum engineering departments, industry’s human resources departments, head quarter offices, body shops, with petroleum engineers starring at the top of the engineering casting.
It seemed that the Big crew Change theory was ignoring the simple reality and some hard facts. The first one is that it is the market that dictates the need for particular engineers and, with its ups and downs, the oil and gas business is not a model of stability. The big crew change theory assumed that the market for petroleum engineers would be at worst stable and more likely on the rise while the SPE membership demographics was merely reflecting the historical ups and downs of the industry and its successive workforce adjustments. The second is that SPE membership was not made of just petroleum engineers by background. At SPE and in the field, I have met lots of outstanding engineers from all background: mechanical, civil, chemical, electrical, etc., even a pharmacist. In 2007 at a SPE drilling forum, a participant poll revealed that only half of the attendance was holding a petroleum engineering degree. But they were all sharing relevant and innovative ideas on drilling technology. The fact is that when one sector needs engineers, it knows how to attract the best ones, of all backgrounds, and educate them in their industry. Good engineers remain good engineers as long as they remain open and willing to learn. SPE membership reflects that spread of engineering backgrounds and I would argue that this diversity is also fostering innovation.
Some of these unofficial petroleum engineers may have been hired mid-career, thus questioning the interpretation of the instantaneous demographic profile. There is no such thing as a talent pipeline running from feeding stations of petroleum engineering departments at reputable universities supplying the oil and gas industries through a ramified network. Talents are geographically, discipline, industry and gender diverse. Our industry has always incorporated bright minds and turned them into petroleum engineers, the service industry being at the forefront of these efforts. The oil and gas industry, when thriving, knows how to attract and fast train the best ones, and I hope that petroleum engineering graduates can also succeed in other industries.
Instead of crying wolf, it was time to reflect on what these numbers meant. To pull historical data showing the movement of the SPE membership population, evidence the career bridges between this industry and others, map the people movements between IOCs, NOCs, and the service sector, understand the motivation that would promote and restrict people’s careers.
Now, I can let go my frustration, please forgive me or you may as well stop reading.
In my 4-year mandate in the SPE Standing committee for membership (2008-2012), I raised these questions about the crew change. I led a team that designed a yearly survey in view of better understanding the SPE demographics and then shed light on its evolution and the future needs for the industry and education institutions. After long internal discussions, this idea was eventually presented to the SPE board of directors and… rejected. I cannot help (forgive my lack of humility here) but think that this kind of insight could have helped advert or soften individual situations, and that we would also be in a better shape to rebuild the oil and gas engineering sector when it picks up again. Honey, they may have shrunk the crew change, if ever big it was; who knows?
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