Energy Crue

Navigating Workforce Reduction in Oil & Gas

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JP Warren hosts a knowledge-sharing Energy Crue podcast focused on a Crue Club operator mastermind roundtable discussing critical industry challenges facing oil and gas professionals today. The conversation explores how the industry has reduced its workforce by 37% while increasing production by 47% over the past decade.

• Industry experiencing significant workforce reduction despite healthy profits and increased production
• Five factors driving workforce trends: investor pressure, consolidation, increased efficiency, AI integration, and overseas outsourcing
• Strategic networking outside your organization provides career stability in volatile markets
• 85% drop in petroleum engineering enrollment creating knowledge transfer challenges
• Mentorship declining while management increases, exacerbating knowledge retention issues
• Consolidation leading toward just 4-7 major operators controlling the Permian Basin
• Service companies finding success through collaboration rather than price competition
• Leadership and people skills remain critically important as technical work gets automated or outsourced
• Building relationships and providing value beyond price key to long-term success

If you're interested in joining a Crue Club operator mastermind roundtable discussion, head over to crueclub.com to learn more about upcoming events in Houston, Dallas, Denver, Fort Worth, and other locations.


Speaker 1:

Welcome. Welcome to a new Energy Crew podcast. I'm your host, jp Warren. In this episode we're going to be diving into a crew club operator mastermind roundtable that we had in Midland Texas on March 4th 2025. The whole point of this Energy Crew podcast right now is to provide some sort of insight, knowledge, overview of what's happening in the oil and gas industry right now, what challenges lie ahead, what things we have to navigate through as an industry to continue to advance. So I'm excited to dive into this subject and, again, this is kind of an overview on what we talked about around the table and it was a packed table, about 20 people, primarily E&P operators, and we have a lot of sponsors as well that we want to give a shout out to. But the topic that we discussed was navigating workplace challenges, thriving amid downsizing, ai integration and shifting oil and gas market dynamics. And I have my notes right here so I can read off of so I can kind of talk us through of how this conversation unfolded, what insights that were shared around the table, and the topic facilitator of the event was Rory Chalmers, who's over at Chevron, who's the well intervention performance engineer at Permian onshore for Chevron, and it was a great event and the sponsors at the table was um, panther companies, pro torque, uh, astra, ai, well drive, lfs, chemistry detection, r360, environmental services. So pretty much I enjoyed this conversation because, uh, rory, uh kind of came to the table and picked this conversation because I miss everything that's going on in the industry. There was a lot of um announcements of these massive workforce of reductions, a lot of talk about ai coming in and making jobs a lot more efficient and actually removing a lot of jobs and there's just a lot of turmoil right now in the industry. That we kind of dove into a little bit and, if you're interested about joining a Crew, club, operator or mastermind, roundtable discussions that are knowledge sharing, that they promote collaboration and they expose a lot of opportunity in this industry. And that's all through conversations. There's so much magic that happens in conversations. I love it all. We got some great ones coming up as well. We have one coming up in Houston on April 3rd, alice McDonald, Denver on April 10th with Craig Miley, and Fort Worth on April 30th with Ryan Walker. We'll be discussing everything from energy policy with Ryan Walker to operations and budgeting, operations and maintaining safety with Craig Miley, and also how to collaborate between service companies and operators with Alice McDonald.

Speaker 1:

So let's get involved, let's dive into kind of how the conversation went around the table. So it's kind of a little background about Rory. He kicked it off by mentioning this interesting topic. About 10 years ago, the oil and gas industry took about 600,000 people to keep it running, all right. Now flash forward to today, 10 years later, that number is at 380,000.

Speaker 1:

All right, and I think that's what? A 37% of reduction in workforce and we're producing 47% more energy. So what does that mean? Rory mentioned that he came from Aberdeen and he's seen five downturns in his career one in the first half, but four in the second half of his career and that's a lot. So, but the current landscape is very different. Right now, the price is about was about $70 a barrel. Companies are reporting healthy profits, however, and the production's actually increased.

Speaker 1:

But we are talking about workforce reduction. So how do we navigate workforce reduction? How do we navigate technology and AI being introduced in our industry? All right, there's five factors kind of driving this trend when it comes to reducing the workforce. Number one is investor pressure for better returns. Number two is industry consolidation we're seeing a lot of that and number three, increased efficiency. Number four AI integration. A lot of people are using that to help with their jobs right now. And number five outsourcing. A lot of companies are actually outsourcing and it's not what you think. It's actually outsourcing their engineering work too. So that was kind of a shock around the table to hear that as well. All right, so there's a lot of talk about engineering jobs being moved overseas. There's two super major E&Ps, both have engineering centers in Bangalore with about 2000 engineers employees. So that's kind of crazy.

Speaker 1:

So now we kind of dove into little career strategies and network building, why that's important. All right, so we kind of discussed about building your connections, not just within your organizations. A lot of times, whenever we work inside companies, we think, okay, well, I need to build my well first off. I don't think a lot of people do this this day and age, but I need to build my networks internally. I need to build it within this organization, with my managers, with people around me that I work with. However, that will hold you back. We discussed that building your networks strategically outside your organization does create a lot of sense of stability in this volatile market. Okay, so it's important to continue to network, continue to build your online brand, whether that's showcasing your areas of expertise, projects you worked on, things you enjoy about leadership, things that fascinate you. That kind of gets your name out there and obviously utilize linkedin or collide or any of these online platforms to use. But again, reaching out and providing your expertise, building your online online personal branding.

Speaker 1:

All right, usually, when these workforce reductions happen, there's two common reactions. Number one is fear. So you're going to be working harder, you're going to put your head underneath the sand and kind of do your job, do your task, and kind of put blinders on. The second response is actually getting out there and networking, meeting people. I love the fact that people are out there meeting people. However, I always say don't build your network when you plant your garden. It's kind of the same thing. All right, let me back up here. You don't plant in a garden whenever you're starving, whenever you need it, whenever you need the nourishment you plant it before. So, continuously to build your network. Whether you're secure in your role right now or whether you're looking for a job, you need to continue to build it outside. Whether you need it or not, it's your insurance plan. Networking outside your company is extremely important. It's been valuable to build networks inside the organization. Transitions, however, should you fall in the line of not being needed anymore or being released. That's why your networks are extremely important. All right, the Permian Basin specifically opens up more opportunities than working solely for a major company. Again, that's through network.

Speaker 1:

Then we kind of dove into AI engineering operational realities. So we talked about kind of the future of the energy industry, how there's a lot of petroleum engineer students that are not petroleum engineer students anymore. So there was an 85% drop of petroleum engineering enrollment over the past five to six years. Think about that. 85%. That's Colorado School of Mines, texas A&M, ut, prairie View. All these different schools are reducing the petroleum engineers. So what does that mean? That means a lot of students are choosing mechanical or chemical rather than petroleum engineering. So it's up to us. You know I actually got a message from a student at Colorado School of Mines and he's like I put this post about 600,000 people 10 years ago, 380,000 people now, and he wrote you know, should I be worried? I said absolutely not. This industry will still be around. Talent, sharp individuals who are go-getters will still be needed. So if you are hearing this and you are a student, don't be worried. Just build your networks. Think how to kind of strategically place yourself in the company of the people you want to be around, whether that's through industry luncheons or something like that.

Speaker 1:

So, all right, a lot of times, the conversations at these campuses it's not about career paths, it's not about what to do as a drilling engineer or anything like that. It's a lot of carbon capture questions, all right. A lot of carbon sequestration, carbon capture questions. They're kind of driving the conversations at the campus, all right. So, to stay competitive with outsourcing and AI, engineers must become technical experts. All right, develop digital skills and help others, all right.

Speaker 1:

So, first off, that's learning new tasks. That's understanding and listen, I'm learning that. At the end of the day, we have all these AI roundtable conversations how people are using it, how people are utilizing it to help their workflow and be more efficient. At the end of the day, no one really has a grasp on AI and what it can do and the potential there. So just apply a little bit of time, energy and effort to learn something new, all right. And to teach somebody. That's something that you learned, all right.

Speaker 1:

So, again, continue to build your skill sets, and this is soft skills too. I was the other side of my business exec for you right there. I help build people up when developing their soft skills, networking skills, how to connect with people. So, again, it's not just your technical skills that matter, it's how you interact with people, it's how you communicate with people. Companies are standardizing work process to enable outsourcing, but this doesn't capture the operational experience that a lot of domestic engineers have. That work the field work, the rigs, work with the people.

Speaker 1:

Leadership and people management skills represent areas where AI will be limited for the foreseeable future. What is that saying? Again, that's soft skills, leading people, developing skills, leading people, developing people, influencing people, building your networks. All this stuff is going to matter. I always said it mattered tremendously before. It's going to matter more in the future. I don't even know why I can't even say this. It's going to be more important moving forward. How about that? Sorry about that. All right.

Speaker 1:

Knowledge transfer and mentorship Again, there's these conversations about. There's a lot of experience leading the industry. How do we capture this knowledge? Do we rely solely on AI? There's a lot of distrust when it comes to AI. Right now, ai is pushing out a lot of decision, not decisions yeah, decision recommendations. So there's a lot of decision, not decisions yeah, decision recommendations. So there's a lot of distrust. Right now, there's still the human component behind it, all right. So companies are struggling with knowledge loss when we do have light, so how do we capture that?

Speaker 1:

So there's been some approaches to preserve knowledge, including institutionalizing procedures, creating data repositories and lessons learned and keeping information accessible. Repositories and lessons learned and keeping information accessible. This is going to be very challenging and confusing because I think right now we're at the process of gathering all this information, gathering all this knowledge, but now what do you do with it? How do you disseminate it? How do you communicate? How do you share it? That's going to be, I think, the next step after we gather all this knowledge, after we put in these machine learning modules. All right, ai could potentially help retrieve and apply historical knowledge when needed. Yeah, I mean, I think it's great to go over old PDFs, old white papers, old well data logs and all that stuff Kind of standardizing some things like that and extracting some pertinent information.

Speaker 1:

There's an industry wide shift away from mentorship towards management and that exacerbated the knowledge transfer issues. So right now, we're seeing a lot of management come to the table. We're seeing a lot of managers come and kind of manage people. You're not seeing a lot of the genuine ad hoc mentorship. So if you are having a little experience I don't care how much experience you have three years, four years in the industry or something like that find people you can mentor. And if you do have more experience than have three years, four years in the industry or something like that find people you can mentor. And if you do have more experience than that, find someone younger than you, less experienced, you can reach out to and develop that friendship. Mentorship does not have to be a set procedure or a set checkbox that you have to go with. It's being there, it's being a sound board for someone. So again, try to lean in on your mentorship abilities, because everybody needs a mentor. All right. What else there's? Formal mentorship programs have declined significantly Now, often checkbox exercises just talked about that.

Speaker 1:

The pandemic disrupted human connections and loyalty, especially for younger workers. Right now it's again. This is not a it's a society thing, it's a culture thing. People are comfortable behind screens. They're comfortable corresponding through text messages and email, but that's only 7% of how humans communicate through words. All right, the other stuff is 55%. Body language, 38% pitch and tone. So how are we communicating with people out there? All right, people out there All right. And also it's also encouraging. You know, as an engineer, if you're out there, you're not going to have all the knowledge when it comes to the technical side of things or the best practices and all that stuff. So leaning on the expertise, the subject matter experts of your vendors is extremely important to learn from All right. So, again, if you can take a little moment to learn about a little bit more about the industry, maybe a little bit more about the service, that's definitely going to help. All right. And again, get out there and meet people. It's okay to make some friends in this day and age. All right, companies that focus on mentorship can differentiate themselves in the current environment, and leadership and people development skills remain critically important for career longevity. But again, this is what stems, you know, this exec crew behind me is that how are people investing in their progress, how people are investing in their, in their networking building or their strategic growth? You have to take it on yourself to go out there and get the skillsets, start understanding stuff, start diving into areas that may you may not be comfortable in whether it's AI, integration or whatever that is and start learning something new. All right.

Speaker 1:

Then we talked about market dynamics and mergers. There's ongoing consolidation towards four to seven major operators controlling the Permian. Can you imagine that? Only four companies out there operating the Permian? That's why there's been such a decrease in private operators going out there to find deals in the Permian. We talked about this at a previous energy crew podcast where we talked about what does it look like for private operators? What does it look like for private operators? And is Permian Basin still the crown jewel? It's not. There's a lot of competition out there, especially the super majors. Once public money gets into it, it's very hard for private operators to find a deal in the Permian Basin.

Speaker 1:

All right, service company side will likely follow similar consolidation pattern. We talked about that. What's going to happen with service companies? Are doors going to shut or will they be acquired? And there was kind of consensus around the table If there are technology advances, if there's technology involved in it, companies will probably be acquired. But if there's not, if it's dumb iron or something like that, companies are going to wait until companies close the doors to go in and purchase their assets. So, anyway, it's going to wait until companies close the doors to go in and purchase their assets. So, anyway, it's going to be interesting times for the service side.

Speaker 1:

It's not a question of dropping price anymore. I don't think. I think we've hit the bottom of the barrel. A lot of people have said that around the tables at crew club events. So where do we go from here? That's going to be collaboration, that's going to be partnerships, that's going to be working together towards a common goal versus submitting a low price, all right.

Speaker 1:

So there's a lot of small private equity operators struggling to compete when larger companies have billions available and available capital. We talked about that. The FTC is unlikely to approve mergers of some of the largest companies. That's still kind of out there. I'm very curious to see how that's going to look. Even successful private equity operations are now struggling to find deals, and that's not just the permute. I'm talking to a lot of people out there, a lot of private operators out there that are kind of in the same boat. It's a small, sharp team and they're actively going out there and looking for deals. The deals are not there currently. You got to be sharp, you got to be serving niche, you got to be creative like an entrepreneur. There's creative business approaches emerging, you know, uh, offering to develop others, acreage for percentage rather than just outright acquisition. So there's there's different uh approaches to approaching deals this day and age. All right, uh, the permian basin is likely to end up with fewer, larger operators controlling most production.

Speaker 1:

And uh, then we debate around the table whether we're witnessing the end of the boom bust cycle or entering a new phase. What do you all think out there? Do we still have a boom-bust cycle going on or is this kind of a whole new era, a farming era of the only gas stage? We talked about drilling rigs, probably not going to increase that much. Fract spreads are not as out there or not as prevalent as you think. So what's going to be happening? It's different times Sometimes. That's why they're not as prevalent as you think. So what's going to be happening? It's different times, different times. That's why you always constantly have to evolve, you have to adapt, you have to adapt their network and learn what's actually shaping this industry and why it's shaping the industry. All right, now we're going to talk about little service companies. We talked about that briefly before, but we're going to dive into that a little bit now.

Speaker 1:

So service companies right now are facing consolidation pressure but also finding new approaches, whether it's a collaboration, whether it's partnership, whether that's new ideas, new partnerships forming. All right, some services are sharing equipment to reduce capital expenditures to work more efficiently. Is that an idea that y'all can do out there? Is that something that y'all could put on the strategy playbook? All right, let's see PPP loans. I mean we, let's see PPP loans. I mean we're talking COVID. Ppp loans during COVID kept many service companies afloat, leading to more competitive, more competition, post-pandemic what else?

Speaker 1:

Relationship-based purchasing gaining ground over purely price-based decision. That's got to be refreshing to hear. For the past several years it's been all about price, low cost, this low cost, that You've got to stay below the FAA, yada, yada, all that stuff. I think right now operators are learning that you pay for what you get, whether that's a directional drilling company, whether that's a frack crew, whether that's a haircut, whether that's a car, you go for low cost. You're going to end up probably spending more should shit hit the fan down the road. So again, I think having these strong relationships between the service and the operator side, so you'd actually come to the table and try to solve these problems together, versus just selling a product or selling a service based on price. All right, it's got to be more than that. What is it? I've read something that when companies start competing on price, you're turning your customer into a junkie. It might be a great hit, might feel good, but it's not a long-term, healthy strategy for your business.

Speaker 1:

The partnership model is emerging where operators value vendors who deliver value beyond lowest price. Again, not lowest price these days. That's got to be refreshing. Let's see Building a better mousetrap. So the technological advancement remains a key to service company differentiation. And we talked about where is the technology going to come from. That's going to be from partnerships. That's going to be understanding what exactly the operator is trying to achieve from square one, not guessing along the way, and hopefully you kind of can fit something into their. You can fit, you know, kind of a widget into kind of something that solves a problem with the challenges and moving forward. All right. So future outlook and industry challenges, we'll kind of wrap this up. So OPEC's recent 2.2 million barrel production increase had little impact. Actually, it only dropped the oil price at that point $1.50.

Speaker 1:

Permian Basin is showing resilience compared to other regions. And then again we talked about how outsourcing engineering would function during another global crisis lockdown. If that should happen. What does it look like when your engineering group is outsourced in Bangladesh? You know how does that look. How does it work? What does the communication look like? It's interesting.

Speaker 1:

We discussed potential government intervention or regulation effects in the industry. There's a lot of pride in the Permian. There's a lot of feeling of isolation in the Permian that California rules don't apply, but that's not really true. The Permian is not untouchable. I think the Permian needs to pay close attention to what's happening in California and energy policy at the federal level Because, who knows, it could be shut down because of Elizabeth. All right, so there's concern about policy spreading from states like California and other regions, which makes sense. Concern about policy spreading from states like california, other regions, which makes sense. Um, we we talked about kind of how energy policy does not follow energy realities. Uh, it's mainly of energy policies based off of energy expectations, energy wish lists. So again, we need to be vocal and realistic wherever we are talking about our industry. All right, um, we noted that northeast regions already have seasonal restrictions, such that season that limit production periods. Could the same thing happen in the Permian, and so, despite challenges, the Permian Basin seems somewhat insulated but not immune to external pressures.

Speaker 1:

All right, so here's some final thoughts on industry navigation to wrap it up, all right. So, again, this is about an hour and a half long conversation, obviously on a lot of different tangents. I'm trying to kind of provide the bulk of things for you right now, and so the final thoughts of the future obviously remains uncertain. I don't think that's anything new, all right, but networking, like events like Crew Club hint, hint plug, provides vital connections in our industry and we're seeing I saw actually from that event two operators make a connection before the conversation even started to tag up after that meeting. So opportunity can be presented. I love it. Uh, that stuff I geek out over, all right. So, uh, there needs to be a focus on building leadership skills and communication skills, mentorship capabilities.

Speaker 1:

Uh, to whether the industry changes, um, engineering outsourcing is seen particularly concerning it's a threat to domestic technical jobs. So let's see how that plays out. Let's's see, kind of how committed companies are going to whatever it is outsourcing their engineering group. The industry continues to face anxiety-inducing changes, but experienced professionals maintain cautious optimism. I think this is something that people have seen like oh, we've been here before, nothing's changed, just different headlines. There's still opportunities for young people entering the industry despite challenges, perceived challenges, and there's tension between work flexibility, demands of new workforce and traditional expectations.

Speaker 1:

This is the whole work from home or flex schedule A lot of companies. I remember I go to a lot of universities and some of the questions are asked hey, what would you, what would you mention to a recruiter to differentiate yourself? And some students were saying, hey, I'd love to work from home, I'd love to flex schedule. So there is some sort of whether it's communication or expectations that need to be set, and clearly set to the next generation workforce coming into the industry, operators and service companies. It seems inevitable. What's happening? Is the wave of the mergers and acquisitions over? Probably not. We're hearing rumors right now of Devin being acquired by who I don't know. All right, and what else? We're building relationships and providing value beyond price remains key to long-term success.

Speaker 1:

So here's four takeaways that we had around the table to kind of wrap it up. All right? So we asked, we said, all right, let's all consider offering mentorship to someone outside or in our organizations to build stronger relationships and knowledge transfer. So I challenge you out there to find someone you can mentor. You can mentor, all right. Another takeaway is operators need to consider focusing more on mentorship rather than just management to improve knowledge retention.

Speaker 1:

Okay, that kind of ties in what we just talked about. We all encourage each other to expand our networks beyond your current organization. I think that's something we all can do as listeners as well, and it's not just even if you're a listener inside the industry or outside the industry. Your networks matter, all right. And then consider implementing ways to capture institutionalized knowledge to prevent loss during workforce reductions. So that was kind of the gist of the roundtable conversation. It was a fantastic discussion. Rory did a great job facilitating coming to the table, bringing some industry topics that are very pertinent to what's going on right now and things that are affecting all of us. Whether it's uncertain times or not, one thing is key we're all in this together. So again, reaching out, building your networks, talking to people, having conversations, is a lot more important than sending text messages or emails or skimming the news to find out the latest and greatest on the industry. Well, that's all for Energy Crew.

Speaker 1:

Thank you for tuning in. If you enjoyed it. Please check out previous episodes where we kind of have interviews with other industry leaders and we also recap some other Crew Club Operator Mastermind Roundtables. If you're interested about joining the table, head over to crewclubcom. Look forward to chatting with you soon. And next up on March 18th we have Brendan Conner in Oklahoma City leading a conversation on safe SIMOPS, safety and communication, how we're doing complex operations in the field and keeping communications going from office to the field field to the field field back to the office. So it's gonna be a great discussion. So anyway, thank you for tuning in. Hope everyone has a great rest of your day, wherever you're tuning in from, and if you like this, please share. Talk about it. I appreciate it and if not, thanks for listening in. We'll talk to y'all soon, thank you.