Pillars of the Industry - How “moving factors” can affect your career.
The challenges that the oil industry is coping with today, and will cope with tomorrow, have a common denominator: scarcity, both on the material side (hydrocarbon reserves) and the human side (talented professionals). High oil prices are the result of a lot more than the current geopolitical scenario and international tensions. It comes after years when the price of a barrel of oil had reached historic lows (down to U.S. $10 at one point) and companies reacting as they would in any other industry when revenues are in a free fall: Investment in new technologies and exploration was drastically trimmed. Exploration investments take years to be developed into productive assets. On top of this, new reserves are being found in more-complex and -challenging environments, thereby requiring the application of advanced technologies for effective production. The bottom line: scarcity of supply.
Low oil price in the late 1990s also initiated a detrimental chain reaction on the human side of the equation. For a start, during those years, hiring was taboo, or at least slimmed down to the bare minimum, and the sluggish performance of the industry made an oil career less attractive for students. In addition, the current wave of early retirements by the baby boomers is also contributing to further reduce the amount of knowledge and expertise available. The result of all of these factors is few experienced engineers and technicians, with most of them concentrated at the opposite ends of the age spectrum. The bottom line: scarcity of human/technical capital.