$620bn projects differed over industry downturn – Report

Oil industry downturn The 2017 outlook on oil and gas has revealed that projects worth $620 billion have been deferred in the oil and gas industry through 2020 due to global fall in the price of the commodity.
According to the report, this has affected the appetite for long-term, complex major capital projects has waned, despite a few notable exceptions.
Although this shift is probably not surprising, given the beating the industry has taken over the last few years, the growth of short-cycle unconventional projects makes for a different investing landscape than in previous cycles.
While this trend certainly seems to lower the risk of individual companies in the industry, it may pose some broader questions regarding energy supply and security.
“We will likely need the long-term perspective that international oil companies have always brought to this industry, in addition to the nimble, short-cycle players and the more pure-play exploration companies, to meet the supply needs of the future.”
The report noted that prior to June 2014, one of the common challenges facing the industry was talent. Would the industry find the skilled workforce needed to fulfill the potential of shale revolution as well as the growth in deep water and related mainstream projects, but in the wake of massive layoffs, these concerns seem very distant at the moment.
“However, the question for the industry is: Will the people come back to the industry when the recovery begins in force? Over time, the success of the industry, coupled with university partnerships, resulted in more talented, young people pursuing careers in oil and gas. However, the downturn and resulting layoffs across the industry threaten to damage the industry’s brand as a career destination,” the report asked.
With current realities, it has become imperative than ever that oil and gas companies be innovative in their approach to talent acquisition, development, and deployment.
As a large number of senior employees head toward retirement, companies should find ways to transfer this wealth of knowledge to the next generation of employees.