The world is experiencing a decoupling of energy production and economic growth. Even if demand for fossil fuels persists, the Fourth Industrial Revolution (4IR) will transform the oil and gas (O&G) value chain. Many economies are still tightly coupled with O&G complicating predictions of what the future workforce may look like.
The increasing rate of change of technologies will demand and place more emphasis on the ability of workers to adapt continuously and learn new skills and approaches within a variety of contexts. The workforce must be ready to reinvent itself. T&T’s O&G sector employs only 2-3% of the labour force but represents 36% of GDP, 30% of government revenue and 80% of exports. Locally, before seeking to re-skill/upskill our workforce, an ideological shift is needed regarding work ethic and perceived competence.
The ideal candidate will not be the one with the skills for today, but the one with the attitude to develop, implement and adapt to the skills of the future. This is not an easy task given T&T’s low competitiveness and labour productivity indices. T&T ranks 98/141 countries in the World Economic Forum’s (WEF) 2019 Global Competitive Index (GCI). This highlights an unprepared workforce and the critical need for workforce planning to be incorporated in any strategy for the local energy sector.
There are countries with no mineral resources which rely solely on developing their workforce and have succeeded in creating first world economies and industries. The major difference between T&T and such countries is culture. T&T leaders across the board will have to combine the preservation of our legacy, identity and national pride in O&G with some of the new value systems that will be required in the 4IR in rejuvenating our behaviour and outlook for socioeconomic prosperity.
The Global Context
The WEF expects the 4IR to fuse the physical, biological and digital worlds; driving a confluence of disciplines, industry and economies. Artificial Intelligence, Machine Learning, the Internet of Things, Bio-Tech, new materials engineering and Robotics are some of the technologies that will eliminate skilled professions and disrupt socio-economic systems.
The future of jobs will include roles such as User Experience and Human-Machine interaction Designers and Culture specialists. New combinations of transferable competencies e.g. technical, social, complex problem-solving, innovation and emotional intelligence will be required for many jobs. Business models will make jobs non-localised and impermanent. Demographic reach will improve facilitating remote work, creating more competition in the labour market.
The O&G Value Chain
As the 4IR ensues, the feasibility of renewables will improve drastically as the technology drives further innovation. Facing volatile demand, supply, social factors and global prices, O&G companies in order to drive efficiencies in the way they operate will have to revisit the relevance of their existing jobs while creating new ones.
The upstream industry (exploration, extraction, geological surveying) is already being impacted. Technologies being adapted include 4D seismic imaging and robotics to take on field tasks. The mid-stream industry (pipes, tankers, storage facilities etc.) will require jobs for processing and interpreting data and managing the enabling technology i.e. more sensors and controls along the pipeline that will enhance safety, environmental compliance and efficiency of operations. Downstream and O&G services, perhaps have the broadest scope for transformation as it fuels and is fuelled by the 4IR i.e. refined products feed into numerous other industries embedded in the 4IR. Outsourced services range from consultancy and engineering to audit and HR. The 4IR has already begun to eliminate many of the professional roles therein.
The UK’s Offshore Petroleum Industry Training Board (OPITB) offers more insight: estimating by 2025, 18% of new hires will be in completely new roles such as data scientist/new materials engineer. Workers currently spend about 28% of their time on automatable tasks; and 80% of the current workforce will still be in the industry by 2025, requiring a substantial effort in reskilling and upskilling.
Local Competitiveness and Futuring
Natural gas has outgrown oil and is dominated by large international players. 60% of the gas is being liquefied for export while the rest is used in the domestic petrochemical industry and power generation. In recent years there has been price and supply volatility, however these have stabilised and experts contend that natural gas demand is expected to grow over the next 30 years. This suggests that there is a lot of room for us to exploit our resources while creating production efficiencies to hedge against volatility.
The government is seeking to diversify the energy sector by promoting the establishment of downstream industries that maximise the multiplier effects between the energy sector and the rest of the economy. Some of the imperatives listed by the Ministry of Energy and Energy Industries include: monetization of natural gas resources as a clean hydrocarbon; promote greater demand management and energy efficiency; environmental preservation; and acceleration of the use of renewable energy in Trinidad and Tobago beyond the present marginal applications.
Considering this local context we can imagine a spectrum of possible outcomes ranging between: quickly adopting and monetising renewable products, reconfiguring existing O&G sector for greater efficiency, creating more downstream industries and diversifying away from energy altogether or suffer job losses, brain drain and capital flight due to lack of innovation, opportunity and competitiveness.
Strategic Workforce Planning
From the local context, there is opportunity yet to leverage our natural resources toward greater production of exportable products and services. The national vision ideally should include more local ownership of the sector, efficient value chains, greater retention of extracts to feed more innovative and diversified downstream industries and a booming O&G service sector based on capabilities that can be used as a platform to eventually diversify from O&G altogether. Here the government can adapt the approach of Strategic Workforce Planning (SWP). SWP defines a workforce in terms of competencies that can execute on the current strategy, organizational or national, as well as, support potential operating and environmental future states. It goes beyond recruiting and training to meet specific stakeholder needs, but seeks to shape the overall talent pool and sub pools in the organization (economy) flexibly enough to adapt to multiple future states. At a high level SWP would incorporate the following:
1.Vision and Strategy
Start with the overall vision for the country and involve consultants and stakeholders from academia, trade unions, civil society and industry to conduct the environmental analysis in developing a vision for the energy sector.
2. Flexible Competency Requirements
Work backwards from the competencies that will be required 20 years from now, to the competencies required tomorrow; considering that competencies need to be flexible enough and combined in various ways depending on how future states play out. Develop a national competency framework and set of objectives for the energy sector.
3. National Policy and Frameworks
Develop and harmonise through transdisciplinary collaboration; philosophies, frameworks, legislation, policies, initiatives and communication to be used as a fulcrum for trade unions, employers, academic and vocational institutes and individuals in crafting and negotiating their own workforce roadmaps. We should take the opportunity to redesign labour policies and business practices to ensure that both men and women are empowered to their full extent.
SWP requires an analysis and road mapping of the current shape of the workforce with respect to competencies including the individuals with the potential to be developed or re-aligned to fit the future shape. Here’s an approach:
Build – internal management of existing talent utilising re-skilling and upskilling to meet the new technological demands supported by coaching and mentoring to help align values and behaviours to new business models.
Buy – acquiring new talent from outside of the organisation or country. Ensure the free movement of labour arrangement under the CARICOM Single Market and Economy (CSME) is an efficient process. If expertise must be imported, ensure mechanisms for knowledge transfer and sharing.
Borrow – Outsource or contract talent if needs are immediate or may not be permanent. This can also be used to transfer knowledge to existing talent.
Bind – find non-traditional ways to retain, retrain and renew high potential employees, i.e. the ones that can easily adopt the competencies required for the future.
Bounce –transition roles that are not strategic and/or individuals that will neither have the competencies to match future needs nor the mind-set, appetite and attitude for change.
The reality of disruption and the inevitability of the impact it will have on us does not mean that we are powerless. We must also keep in mind that it is not only about talent and skills but also an enabler of efficiency, which is something that is also needed. It is our responsibility to ensure that we establish a set of common values to drive policy choices and to enact the changes that will make the 4IR an opportunity for all.