Plummeting Oil Price – What can we learn from tough times ?

Plummeting Oil Price – What can we learn from tough times ?

The current oil price situation is not a new phenomenon for the oil and gas industry. We know that.  Yet, one of our primary challenges lies in how we think in tough times. It is that which will make the difference.

Thinking short term is seldom a good option. Regarding problems without seeing opportunity is not helpful. Demanding innovation with a paucity and fearful mindset is not conducive to fluid creativity.

Merely cutting costs in a ‘slash and burn’ manner means that we also risk cutting creative mindsets. This creates an environment where many very good minds are imploding intellectually resulting in a sad loss of expertise and a dose of passion leaving the industry, and perhaps the country.

During my recent time in Abu Dhabi presenting my paper on “Better Decision Making in an Ever More Complex World” at the 2015 Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), I was heartened to hear some courageous views. During the Ministerial session the Minister for Oil and Gas of the Sultanate of Oman, HE Dr Mohammad bin Hamad Al Rumhy was unabashed by his own volition to be ‘outspoken’. He was emphatic that one of the greatest victims of the current oil crisis will be technology.  The Minister for Petroleum and Resources of Egypt, Tarek El Molla concurred that the current priority within technology is to cut costs, not to innovate. Our young people coming into the industry want to innovate and our mature folk want to pass on knowledge gained from many periods spanning the rich to the rough. I see this.

Or have we dug so deeply into a dry global financial well that the light of any innovation is being extinguished faster than we know how to manage. I hope not.

The Minister for Energy for the United Arab Emirates, HE Suhail Al Mazrouei, was optimistic and invitational in offering to share expertise with the petroleum partners participating at the conference and beyond. He indicated his role within the UAE was to maintain projects and keep innovation at the forefront and buoyant with a particular emphasis on reducing their carbon footprint.

The 2016 President of the Society of Petroleum Engineers (SPE), Nathan Meehan (2016), commented on the advances made during the last protracted downturn in oil prices during 1980s. He said, “Most of the technologies used to develop ultra deepwater reservoirs were envisioned, advanced, or tested during that period” and added, “Geostatistics and geomechanics emerged from being highly specialised sciences to routine components of how we approach problems. Computational advances revolutionised the way we solved problems.” In other words, how we are willing to think in more prudent times can have a profound effect on an industry. He continued by saying,

“There are advantages to stormy times. Instead of ‘chasing rigs’ due to high activity levels, we have to innovate. We have to find new ways of solving problems, and we will. Our industry will succeed at any product price.” (Meehan 2015)

So what does true innovation require in tough times?

Are you asking the right questions?

There is often more than one ‘right answer’. Too often the most appropriate solution is not the first one we think of. Learning to ask the right questions is both a science and an art. Simply asking, ‘Why not?’ with an open mindset to a proposed idea and considering how one could make it work, is creative in and of itself. Leaving ideas on the table rather than discarding notions or potential solutions too soon, encourages those brave enough to propose solutions and stay buoyant long enough in the process to continue to participate. Discarding the different, the unusual or the unconventional ideas leads to people imploding intellectually and emotionally rendering an unwillingness to share in the future.

In times of abundance, we tend to think in a particular manner. When times are tougher, it demands a different frame of mind and different questions to be posed.

Given some latitude and the right environment we too, can contribute with other ways to think with the posing of more ‘right questions’ to come up with more ‘right answers’

After all, science is indeed truth ‘until further notice’.

Are we really taking the time to think, to deliberate, to challenge, to question, to requestion and to rethink when our wider world is so used to finding a quick solution with the click of a button?  Our ability to really stay with a problem, to fall down that chasm and hang about in the hole long enough to consider the short, medium and long term implications of our decisions is affected by our broader global culture that expects the immediate.

The immediate, the quick fix, the easy, and the cheap are not the modus operandi for exceptional minds in our industry. Nor in any industry as we see with our recognised bold, scientific and entrepreneurial minds like Bill Gates, Stephen Hawking and Richard Branson. It’s crucial to consider taking a long term view. This is a harder option than it once was in a world where culturally the expectation of immediate gratification in the here and now is exactly that, here and now. The legacy we leave is the mark of our integrity and also that of our industry. It starts with us.

Intelligent technology alone will not suffice; intelligent minds are needed. Minds that derive connections, locate subtleties and draw nuances from big data are imperative. (Sweatman, 2015.)

Management that strives to see how something can work, rather than dismissing an idea at first blush, will see great benefits within their workforce. One of the greatest benefits are people who choose to participate and utilise their very good intelligence.  The oil and gas industry is not short of clever people. Clever people committed to providing the world with energy.

Read what you can, but don’t believe all you read.

What does this mean?  Read all that is necessary for your role and what is happening in the industry. Then set that aside as you make your efforts to create new solutions to the challenges you face. In other words, do not become paralysed by only what you hear and read. There is danger in the paralysis that engages the part of the brain that responds not only at lightning speed, but unconsciously to threat. This impedes the regions of the brain required to facilitate deep thought and draw from higher order thinking.

It is not an easy task to be innovative and creative in an environment impregnated with the language of paucity and impoverishment and threat. Tough times teach us to be eclectic.  Eclectic in the way we think and approach problems.

Dr Daniel Jergin, Pulitzer Prize winning author of “The Prize” said in his keynote address at ADIPEC 2015 that after WW1 an expert predicted there was only 9 years and 5 months left of oil on the planet. There followed a heavy investment and seismic technology broadened our view and opened the world up once more. Let us never underestimate what technology can do.

If we were starting and redesigning the petroleum industry from scratch, what would it look like today? Think of a blank canvas, what could the industry look like, if we knew we could not fail?

Wealthy times of abundance do not always generate certain thinking as we can be lulled and seduced with choice. People within our companies have the opportunity to surround themselves with people from other businesses and industries who have undergone challenges and found ways out and around it. Being myopic can be dangerous.

When the oil price does change (and we know it will) petroleum engineers will be in high demand.

Don’t give up at the wrong time. Seek the strategic areas that will be in demand as the industry goes through its stages. Find your passion as well as develop your niche in the supply chain. The Scottish Minister for Business, Energy and Tourism, Fergus Ewing (2016), is co chairing an Industry Leadership Group refreshing their 2012 strategy which they recognise as outmoded in the present market. The Minister is wanting the North Sea industry to build up world class expertise in areas of developing and current importance in the supply chain like asset integrity, subsea and decommissioning. The Government is investing a proposed £ 400 million pounds to boost innovation and develop new skills within the workforce. The industry needs hearty investment if we want to become more resilient and benefit from the global situation in some manner.

Our mindset dictates the solution.

Someone once said to me, ‘The way we see the problem is the problem’. They were right. If we try to solve just the ‘problem’ without seeing it as an ‘opportunity’ then the mindset and language we adopt is different. The solutions are, therefore, different. Is it just a matter of semantics? Or does the brain really pay attention to how we speak to it (the mind) and how we engage in finding solutions? As a student and exponent of neuroscience, I have learnt that words matter a great deal; especially those we speak to ourselves and to our own minds.

Innovation does not have to mean complex nor expensive.

See things the way others don’t and be prepared to stand by that. Look for an innovative approach and do your homework. When we are immersed in an organisation, we can become conditioned to think in a particular way. That is useful in many respects yet can impede in other ways. The famous National Geographic photographer, Dewitt Jones, says, “Use your intellect; put yourself in the place of most potential”. He argues, there is always more than one right answer to a problem.

Think of volunteering your expertise and good mind and intent.

Whether that volunteer work is within your business supporting a cause or in the wider community, it is highly valuable. Why volunteer when you are probably already working long hours and your time heavily committed? It may give you a chance to see how others do a lot with a little; those who do good to sometimes great effect. It can be refreshing to take your intellect and apply it to other problems or situations.  Engineers see things differently. They apply the practical, the structural, the mechanical, the mathematical, the scientific to be highly creative while maintaining safety, security and integrity of all stakeholders and factors. I have had individuals say they solved a work problem while serving meals to the homeless or building a classroom in an underprivileged country.

The calibre of the way we think and conduct ourselves

in any situation

can have a profound effect on the outcome.

So, what now?

May I challenge you to move out of your comfort zone and bring together a select group of your open minded work colleagues, and maybe some other folk from other industries.

Your task is to brainstorm three specific problems you are facing within a set time frame, no more than 80 minutes. Look for, and take advantage, of how other people think differently about a problem and apply some of that to your problem.

Set the ground rules. There are no wrong answers; every response is welcome and has merit. Be prepared; you will receive some outrageous ideas along with some very traditional, almost dull and expected ideas. Remember: all have merit.

However, don’t be surprised if somewhere in between there are at least one or more solutions for these three problems. Record all the responses, and at the end of the 80 minutes come up with the top 3 ideas for each problem. Your intention is to act on the top 3 ideas within a specific time frame and remember to give feedback to the participants as you progress those ideas.

Always remember when you ask great questions, you are guaranteed to receive great answers. And be prepared that the person whom you least expect to have a great answer  will often surprise you with their innovation and knowledge.

Finally, I look forward to hearing your results. jill@jillsweatman.com

For more articles by Jill Sweatman, visit  www.jillsweatman.com

 

References:

Meehan, N. 2016. President’s Column:”Should I Stay or Should I Go?”-Young Professionals and the Industry’s Future. http://www.spe.org/news/article/should-i-stay-or-should-i-go-young-professionals-and-the-industrys-future (accessed 3 February 2016).

Sweatman, J.McK. 2015. Better Decision Making in an Ever More Complex World. Presented at the Abu Dhabi International Petroleum Exhibition and Conference, Abu Dhabi, 9-12 November 2015. SPE-177716-MS. http://dx.doi.org/10.2118/177716-MS

Scottish Enterprise. Delivering New Opportunities for Oil and Gas. 8th February 2016. http://www.scottish-enterprise.com/knowledge-hub/articles/insight/oil-and-gas-ilg-strategy (accessed 10 February 2016)

The Scottish Government. 8th February 2016.New Plan for Long Term Oil and Gas Industry Growth. http://news.scotland.gov.uk/News/New-plan-for-long-term-oil-and-gas-industry-growth-224a.aspx (accessed 10 February 2016)

 

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