Crises and change: Corporate Comms in Oil and Gas

Working in the Corporate Communication function of an oil and gas operator is like walking through a mine field 24/7. For all the safeguards and regimented training, one always needs to be prepared for the possibility of facing a serious incident involving loss of life and environmental damage.

No other day is like the one before it and the training required to be a part of the crisis cell when something goes really wrong is second to none, and so is the cross-cultural knowledge one must possess to be able to immediately shift between speaking with a tribal leader and, three hours later, with a  government minister.

It takes a serious amount of study of the industry, of the individual company’s operational environment, of its Risk Register and of its myriad of stakeholders.

Today, when the might and glory of the oil and gas industry is starting to dwindle, the bad news is focused on two special areas of the communication practice: investor relations (dividends are significantly reduced if paid, yet investments continue to be needed) and internal communication (trying to explain to employees, that in order to save the company, they will have to lose their jobs).

Corporate Communication or Public Relations for an oil and gas operator is not for the faint hearted nor for those who naively think that just because they are great at creating PR stunts or digital animations, they can do “oil and gas PR” – they can’t.

2020 is the year when the worldwide oil demand “is expected to fall by up to 8% (or almost 3 billion barrels. This is likely to be the largest global annual demand reduction on record”.

In the North Sea oil and gas sector, almost 35,000 jobs will be cut – and this is a huge number for an area of Scotland that is so reliant on the oil and gas industry given its cascading effect on the local economy.

Ben van Beurden, Royal Dutch Shell’s CEO, announced – in a video message to the company’s employees – that a group-wide restructuring set to take place in 2021 “would involve job cuts as part of broad cost reductions”.

15% of BP’s global workforce will be made redundant by the end of 2020. In Houston, USA’s oil capital, the outlook for the oil and gas industry is bleak: 300,000 jobs will be cut by the end of 2020.

There is, clearly, a human cost directly attached to the global oil industry, a cost that is slowly becoming unsustainable for the largest operators and almost impossible to bear for those in the industry’s enormously diverse supply chain.

The drive towards net zero (zero carbon footprint) of the oil and gas sector comes at a very steep price and staff are its first victims, especially those in an “office” position, since their skills can often be amalgamated, enhanced by various forms of artificial intelligence so widely used in the oil and gas sector or, simply put, automated.

There is no other resource in the world that has had such an extraordinary history of rise and fall like the oil has; the most comprehensive book ever written about its impact on the world’s economy and power structure, and on all of us, is one with a very apt title – “The Prize”.

Wars have been started to secure this precious resource; trade deals have been imposed on smaller or weaker nation states; Middle East has been turned into a battle ground for oil; the shale revolution caused significant environmental safety issues in the US, and oil spills have devastated delicate ecosystems in the Gulf of Mexico, Alaska, Niger Delta and the Caspian. These are just some of the very many examples of the end justifying the means – the prize was too high to let anything and anyone get in the way of an extremely attractive return on investment that only the oil industry could bring.

How sustainable is a career in oil and gas today for those graduating with a petroleum engineering degree? How about those students studying production chemistry? How about those specializing in deep-water drilling, or fabrication companies, offshore rigs, FPSOs manufacturing and so on?

Perhaps that is why, given the considerable uncertainty facing the oil and gas sector worldwide, the UK’s Engineering Construction Industry Training Board has allocated £4.5 million for “the ongoing development of apprentices and graduates, whose participation in industry programmes has been suspended or otherwise impacted by Covid-19.”

What incentives do the oil and gas operators and membership organisations have to offer those who consider a career in the sector? How transferable are the skills of a petroleum engineer? How about the skills of an offshore driller?

Can the oil industry continue to use its promise of a fascinating career, filled with satisfaction and pride, including significant pay-outs going forward? Unlikely.

Then what will an industry so much battered by internal and external geopolitical and lobbying interests, price uncertainty and market volatility, significant activist pressure and an increasingly depleting resource do to attract the best and the brightest?

A high ranking executive in a global organisation with an oil and gas division told me that she “can foresee that there will be redundancies in the future as we use this change of working pattern as a catalyst to change the business for the future too. Remote working is on the increase, de-centralised teams, automating processes, increasing digitalisation to make processes more efficient.

“Our UK business that covers all industries out with oil and gas have had around a 40% reduction in revenues, made 50%+ furloughed and have also made redundancies.”

Many could argue, especially in the countries where the renewable energy sources are highly developed, that the oil industry’s skilled staff could be easily transferred to the renewable sector.

That’s not as easy as it seems not just because to operating a windfarm is different than operating an ROV or an oil rig but because in the UK, at least, Scotland’s renewable energy employment figures have flatlined since 2014.

A Corporate Communication executive working for a membership organisation made a very strong point in one of his e-mails to me:

Oil and gas still account for 54% of the world’s energy, and the quality of life that comes with that. But oil and gas mustn’t fall back into the trap of thinking it has the upper hand, it need to act as one of many energy sources from here on.

“There’s a strong case for some fossil fuels staying the mix so long as production and combustion are close to emission free, alongside the growth of renewables, nuclear etc. But it means fossil fuels need to prove themselves all over again and that’s a tough but not impossible task.”

How would the Human Resource and Corporate Communication departments collaborate to craft a narrative that is both realistic and attractive for some of the prospective new entrants in the oil and gas sector? By telling the truth – and that is the world cannot survive without oil … not yet, anyway.

Photo by Zbynek Burival on Unsplash

Founding Chartered PR Practitioner, CIPR Board member (2018), former UK Government Communication Services and Institute of Directors mentor, published author and university lecturer, Ella has almost 20 years of high level government and international organisations experience in corporate reputation, leadership and crisis management, across business disciplines and governments, including investment markets, lender organisations, national and international media, NGOs and affected communities. She is a 2014 Service Award Winner of the Society of Petroleum Engineers, Assessor of CIPR's Chartered Scheme, an elected member of the CIPR Council (2017-2018), Founder of CIPR’s Energy Leadership Platform, former Chair of CIPR’s Foresight Panel and a Fellow of the Institute of Leadership and Management. She handled some of the most prominent international crisis of recent times, she developed the Leadership Development Programme for SPE’s MENA young engineers and she has also been an adviser to several governments on their national branding strategies. Her list of clients includes McKinsey & Company, Boston Consulting Group, Total, BP, Shell, Centrica, KazTransOil, Averda, The World Bank, Private Investment Development Group, the European Commission, the European Bank For Reconstruction and Development and many others. She is also Robert Gordon University's Lead Trainer for the Crisis Communication Diploma (CIPR Specialist Diploma).

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