PESGB January 2015
- Challenging 2015 Needs Bravery not Tradition, Hamish Wilson, PESGB President 2015
- Developments in the Norwegian Barents Sea
- 2014: The Investment Cycle Coming To An End
Plus Much More Inside
Challenging 2015 Needs Bravery not Tradition…
New PESGB President, Hamish Wilson urges the industry not to make the same mistakes of the past to avoid similar problems in our future
2014 was an eventful year at the PESGB. We had highly successful 50th anniversary events followed by further record breaking attendances at PETEX and PROSPEX. In reflecting on our celebrations, we have to start thinking about ensuring a valued, vibrant society for the next 50 years and more. Therefore we are starting a process to take a more strategic look at the PESGB, where we sit in the market of professional societies, and how we want to develop over the next five years or so.
We do so against a back-drop of an industry in retreat in the face of possibly sustained low oil prices. The industry reaction is the classically old fashioned; cost cuts, staff cuts, freezes in graduate recruitment, removing training budgets and no staff biscuits. I am disappointed to note the cut backs in graduate recruitment in particular. Many of us of a certain age will recall the complete gap in graduate recruitment through the 90’s and the consequent ‘crew change’ challenges of today and the lack of capacity in mid tiers of management.
Graduate recruitment and ongoing staff development is critical to our long term success particularly as all projections show oil driving the global economy for many years to come. The PESGB makes a material investment in supporting education in geoscience and thus contributes to developing the talent that the industry needs. These efforts, along with many others, are negated if the industry does not recruit. Thus the PESGB and further education establishments need to align capacity to the future recruitment trends in the industry and not create an employment expectation that the industry cannot fulfil.
However, I hope that the industry will have learnt from managing past oil price cycles and will continue to invest in staff skills and capacity to insure against a future crew change problem. I have my doubts!
The oil price puts further pressure on the North Sea; increasing the imperative of implementing the Wood Review recommendations. To this end, I’m sure all of us at the PESGB extend a warm welcome to Andy Samuel, the new head of OGA who started in post this month. It is clear that substantial changes in operator and service company behaviour are going to be needed to drive down costs and improve overall industry productivity.
At the PESGB we represent all sectors of industry and thus recognise that an oil company’s cost is the service sector’s revenue. So we will need to work together to understand where the past 5 year 20% per annum cost increase has come from. It’s not in salaries; speaking for myself, in reaction to a comment Sir Ian Wood made at PETEX, my salary has not increased by anything near that; quite the converse in fact. I see continual downward pressure on service sector rates.
So perhaps a more challenging year ahead than many of us would like. But as ever, a world of opportunities!
In closing I’d like to thank the retiring members of the PESGB Council and welcome the new team. I’d like to make a special mention to the PESGB office and thank them for their continued support. Myself, and the new Council, are looking forward to working with the office and our membership in the coming year.