Why we need more innovation in the oil industry

It’s something as applicable for organisations as individuals but it’s true – it doesn’t come easy.

“The oil and gas sector, historically, has been very conservative about its methods and has been very resistant to change,” says Dr Tony Trapp, founder of SMD, The Engineering Business and now OSBIT Power. “We need to break this mind set.”

That is something that Denise Smiles, CEO at OMS agrees with. She recently wrote an article where she said the biggest issue for energy companies was efficiency and process improvement, “Globally, there is only a finite amount of oil remaining and it is our duty to make sure that we are maximising the capability of the industry to extract as much of it as possible, in as efficient, sustainable and risk-free way as possible.” Doing that requires expertise however few will be ignorant of the reality facing our sector with an ageing workforce and a market suffering from a skills gap. As Smiles highlights, “it’s only through investing in new talent that we can overcome this (challenge).”

Steve Goodman is the North American Energy Practice Leader for executive firm Egon Zehnder and relayed a story to rigzone.com recently of a HR officer who was “scared to death of waking up one day five or seven years from now and having another lost generation” – fearing that after a raft of cuts, his company would no longer have the leadership needed to drive the business. Goodman says the next generation of leaders are going to be people who want to know who things work and how they can engage others to work with them to make things better.

That pursuit of synergy to deliver results led to a gathering at the end of last month of more than 110 members of the oil and gas industry in Aberdeen. Led by the Technology Leadership Board, others from Total E&P UK, Amec Foster Wheeler, Oil & Gas innovation Centre and others joined to ‘unlock major production efficiencies and cost savings in the industry’. Chief Executive at OGIC Ian Phillips said there was a considerable commitment to achieving progress in areas of asset integrity management which will “most likely deliver practical impacts for the industry.”

Innovation is crucial – both in terms of technological advances and in personnel. Just as companies must adopt new methods like INEOS Group and Apache Corporation and others like SMD, IHC Engineering Business and Subsea Innovation all invest heavily in R&D, individuals need to put in the hard graft too. As Goodman put it, “Companies need people who are engaged enough to come in and say, ‘I can innovate around processes and I can be innovative in the ideas that I bring forward to help us be more operationally efficient.’ “

It’s going to go to his head, but Pete’s right. It’s no longer enough to be good at what we’ve always done; we need to future proof ourselves and our companies in order to keep up with the changes that will be essential in the market in the next few years.