Top CEO’s Talk People, Positions and Prospects

Are you interested in what the top CEOs in world have to say about the outlook of our energy industry rather than the politicians? Yes, we thought so! The insightful Maxwell Drummond International is a global executive search firm that has its fingers on the pulse when it comes to communicating with the top CEO’s, Executive and Management in the energy sector worldwide. Maxwell Drummond recently published a highly informative Leadership Energy Survey that summarizes current energy issues from a sampling of leadership from all energy sectors, including upstream, midstream, subsea, oil field service, EPC and seismic/subsurface.

Nearly two-thirds of the companies surveyed have international operations, and the size of the companies ranged from generating revenues of $500M to $10B annually. Brian Coffman of Maxwell Drummond says, “Our annual survey aims to tap the minds of leading energy executives from around the world, and, in a sense, to find out what keeps them up at night,” said Brian Coffman, Canadian General Manager, Maxwell Drummond. “This year is no exception, and our findings reveal a few surprises, most notably that companies with revenues less than $500M (USD) believe economic recovery to be at least 12 months away, while companies with revenues between $5 and $10B (USD) believe recovery to be three to six months away.”

The OGM: How many energy leaders did you speak to?
Brian Coffman: We spoke to 100 individuals who were executives, management and CEOs who bring a variety of perspectives based on the roles they repre- sent. We also spoke to the technical leaders and the business development professionals in the petroleum industry. We have offices around the world, so it was a global initiative, and we got a sense of differing perspectives from different regions and industry sectors.

The OGM: “job opportunities” are the highest searches on the web under the category of oil and gas. Why is that?
Brian Coffman: I think that oil and gas is an exciting industry to work in. There are some exciting frontier technologies and a strong interest from people wanting to join the industry. In developing nations like China, India and West Africa, we have found that many well-qualified people from those regions are looking for opportunities in the industry. The industry is dynamic, challenging and offers a lot of learning and growth potential. I think that’s why jobs would show up at the top of the search charts.

The OGM:Your report shows alternative/renewable energy steeply rising to be 56% of the energy mix in the next 15 years. What factors drive that dramatic increase?
Brian Coffman: Clearly, we can see that alternative energy will play a much greater role in the energy mix from here forward. Some people think we are near peak oil, whilst others, perhaps, think peak oil has already come. It’s a non-renewable resource, and we need to look at alternatives. Solar, wind, hydro, bio-mass are naturally playing a role in the energy mix. Cost has been an issue, and, in time, with technology advances, those costs will come down and technology will improve. There’s a sense of urgency that we are all starting to see and that will create momentum forward. Investment into new technologies and financially viable solutions is the key.\

The OGM: The retiring workforce is of primary concern. Based on the current and perceived energy mix, your respondents said that human resources gaps in the short-term are most prevalent in the knowledge transfer from management/retirees to new less experienced employees. What’s the solution to this?
Brian Coffman: This is a big issue, and we’ve known about this crisis for years here. I’m not an expert in terms of what individual companies are doing, but I believe what will make a bigger impact are formal policies and procedures for “mentoring” programs to come into play to transfer technology. People are already stretched, so knowledge transfer goes in the “if I have time” folder. Clearly, there needs to be a stronger commitment and plan for the knowledge transfer process.

The OGM: What does the future hold?
Brian Coffman: “It’s exciting to see new areas open up for production on a global scale, and it’s important to remember that Canada is second largest in the world when it comes to oil reserves. As oil prices stabilize, we’re starting to see activity resuming in Western Canada and more subsea exploration off the east coast as well,” added Coffman. “A number of key projects are being pulled off the shelves, and there are more mergers and acquisitions taking place, not to mention ongoing foreign investment. Companies continue to focus on unconventional resources like shale gas and oil sands, while newer techniques like horizontal drilling and multi-stage fracturing are having a positive impact on the conventional oil and gas markets. We definitely expect to see more movement and growth in the next few years.”

Energy Report Summary

The Leadership Energy Survey revealed that respondents agree that the economic recovery has been slower than expected. They are, however, taking advantage of the recession by improving their workforce and bolstering intellectual capital, especially in the areas of operations, reservoir engineering, subsea, and sustainable extraction techniques. While many energy industry executives believe full recovery to be at least six months away, addressing the “big crew change” remains top of mind with almost 90 percent of respondents indicating their companies are actively investing in employee skills training and new talent acquisition to offset an ageing and rapidly retiring workforce.

Findings also reveal that energy companies are looking to capitalize on future sources of energy through Research and Development technology and strategic Merger and Aquisitions activities. With regard to unconventional resources, respondents view solving water and environmental issues and developing improved fracturing techniques as having the greatest impact on future development.

Other top line findings

• Respondents believe functional gaps are most acute in the areas of operations, reservoir engineering and subsea, particularly in locations where energy is hardest to recover;
• Compared to 46 % in 2009, more than 90 % of respondents would now recommend careers in energy and support heightened academic advocacy of energy and oil and gas-related degree programs;
• More than 50 percent of respondents view Eastern Europe and China as the main focus areas for development of unconventional resources in the foreseeable future;
• Respondents believe government will play a role in technology development and future energy sourcing through changes in legislation and tax breaks for the development of cleaner technologies;
• From a geographic perspective, the survey revealed that most companies see West Africa as the leading region for deploying production resources in the foreseeable future. Offshore North America and the Middle East were tied in the survey as the second most important areas for near-term production opportunities.
  For complete survey results and more details please visit www.maxwelldrummond.com.