Truth be told, the oil and gas industry is dealing with some of the most challenging market conditions in a generation. The outbreak of COVID-19 has not only reduced overall demand for crude around the world, but it has created fear and uncertainty that has rippled across almost every sector of the economy. At the same time, an oil war between Saudi Arabia and Russia has flooded the market with cheap supply, causing oil prices to nose dive (at least for now).
While the short-term impacts of these market challenges aren’t pretty, there are plenty of reasons why both operators and their workforce should use this time to consider new opportunities as conditions continue to evolve:
1. An Increased Focus on Financial Fundamentals
This is not the first time there’s been a shock to the oil market, but it is one of the first times that the industry has faced a demand and supply shock at the same time.
The immediate result is operators are looking for ways to cut costs, as they review key metrics like profit & loss, cash flow, and their balance sheets. To some extent, many companies have been doing this for some time. Particularly in shale, the ‘grow at all costs’ model has been replaced by cost containment, cash generation, and capital returns. That focus has actually led shale to be reasonably adaptable to lower price environments, thanks to improved efficiencies and reduced operating expenses.
Operators can benefit from exploring flexible solutions, offered by companies like RigUp, to help reduce their fixed costs, including flexible staffing models, strategic equipment lease agreements, and outsourcing project management to drive down lease operating expenses.
2. A Shift Towards a Leaner, Flexible Workforce
In a cost-cutting environment, operators are looking for ways to reduce capital intensive areas – and that includes staffing.
In the short-term, that will result in layoffs. But as conditions improve, operators will be looking for flexible ways to scale their workforce up or down based on project needs. That shift will further underline the importance of industry networks and relationships. As operators adopt new models for sourcing and deploying “just-in-time” talent as opportunities arise, they’ll turn to companies like RigUp, with a sourcing team that can quickly match their specific project needs from a wide pool of skilled workers in their network.
For energy buyers that need to scale quickly, it may make sense to consider the breadth of skills many workers with oil and gas backgrounds already have. With minimal training, these workers may be able to apply their existing work experience to your specific project needs. For workers, these conditions create new opportunities to flex transferable skills and even cross-train or re-skill to areas less affected by the short-term market impacts. Companies like RigUp can help you find both the training and the opportunities that are currently in-demand.
3. A Light at the End of the Tunnel
It’s important to note that despite the short-term market stressors, the long-term trajectory of the energy industry is still extremely positive.
In fact, the EIA recently forecasted that world energy usage would increase by around 50% by 2050. Meeting that demand inevitably means new opportunities will be unlocked for both companies and their workforce across not just oil and gas, but renewables as well.
As COVID-19 is better contained and monetary and fiscal stimulus kicks in, the markets will recover. And just like we have been since 2014, RigUp will be here to help you navigate these challenges and meet your goals.
We know these are challenging times for the energy sector, particularly the oil and gas industry. RigUp is committed to helping you navigate these difficult economic conditions. That’s why we continue to adapt to meet the evolving needs of our customers across the energy market.
So whether it’s efficiently scaling up your workforce or exploring new ways to lower your operating expenses, you can count on RigUp to help meet your needs.