Editor’s note: Last year, when assembling the 2020 Top Operators Report, the COVID-19 pandemic had shuttered the global economy. Oil demand had been reduced by over 20 million bbls/d and prices were at lows not seen in decades.
The mood of the Canadian industry was grim. After five years of being rocked by wild price volatility the pandemic hit like a knockout punch.
The 2021 Top Operators Report looks back at how Canada’s oil and gas leaders pivoted to meet the challenges of 2020, and how they are positioning their organizations for future success.
Once again, we have tapped into the experience of professional services firm KPMG in Canada to provide insight into what strategies operators could pursue to thrive in the current environment.
The report also features a broad swath of the insights and opinions from industry leaders gleaned from Daily Oil Bulletin coverage, along with commentary from data providers Evaluate Energy and CanOils.
Canada’s oil and gas workforce has seen a lot of change in the last six years as low and volatile commodity prices resulted in layoffs and increased workloads for those remaining.
From August 2014 to February 2020, there was a 23 per cent decline in oil and gas employment. The COVID-19 pandemic has added to this uncertainty.
Between February and May 2020, when the pandemic took hold, there was a 20 per cent loss in jobs. Already stressed employees were being asked to do more with less. Layered on top of the employment losses is the rapid digital transition resulting in changing industry workflows, and a rising focus on environmental, social and governance (ESG) risk management impacting how work is performed. And then came the shift to working from home.
Throughout the pandemic KPMG have been surveying executives and tracking employee concerns, said Shesta Babar, director, People & Change Services at KPMG in Canada.
Early on, many employees liked the move to working from home, but attitudes have gradually changed, said Babar, citing responses to KPMG’s survey of 2,003 Canadians from March 25 to March 30, 2021 using Delvinia’s Asking Canadians panel on their Methodify platform.
“Seventy-seven per cent said they wanted flexibility in where they worked. Of course, flexibility means different things to different people, but the hybrid workplace is the new model,” said Babar.
Employer attitudes have also shifted in their thinking throughout the pandemic. When the pandemic hit, oil and gas company leadership was focused on stabilizing their business processes after the shift to remote work. They then began focusing on retaining and attracting talent. They are now focused on dealing with climate change issues and digital transformation.
“The results of KPMG’s CEO Outlook survey show in August of 2020 talent was the number one risk for energy leaders,” said Babar. “In a follow-up pulse survey in 2021, 43 per cent said the environment and climate change was their number one risk. They want to be able to lock in the climate change gains as result of the pandemic. Compared to other industries, only nine per cent said environmental and climate change risk was the top priority.”
The digital transformation is also top-of-mind for energy executives. Sixty-three per cent said they are investing in automation to drive efficiencies, followed by investment in AI. There is a shift in applying digital technologies from transactional to analytical workflows, said Babar.
While many workers fear the digital transformation may result in further job losses, Babar said it would more likely result in a shift in skills.
“You need data scientists skilled at understanding data sources, cleaning, extracting and manipulating data to get insights,” she explains. “You need subject matter experts to understand the data and use it to get results. The skills required include an ability to take the data and tell a story with the numbers.”
As workers return to offices this fall, it is likely there will be a multitude of different work location models tested by companies. Several oil and gas producers and global companies have already indicated they will be bringing all workers back to the office full time. Whether other organizations follow is an open question.
Bill Whitelaw, managing director of strategy and sustainability at geoLOGIC Systems ltd. and JWN Energy, suggests companies take a close look at some of the less obvious opportunities that exist in the hybrid work model, including the opportunity to rethink their external communications efforts to take advantage of employees who are tied to their communities in different ways.
“With employees not always coming to work in the ‘downtown echo chamber,’ there may be creative ways of connecting to the communities in which staff live,” noted Whitelaw. “As the sector enters its next phase of evolution, the stories people tell at the community grassroots level may be able to help shift public opinion and perceptions of the energy transition journey on which many companies have embarked. The sector shouldn’t pass up this opportunity.”