How Oil & Gas Industry Can Tackle Growth Challenge

The Oil and Gas Industry Is Growing

 Employment in the Texas upstream oil and gas sector grew by more than a fifth (21%) in the last year, according to data from the Texas Independent Producers and Royalty Owners Association (TIPRO). As of October 2022, there were a total of 207,000 jobs in the Texas upstream oil and gas sector, which represented a 36,500 increase on the October 2021 total of 170,500.² 

The services sector was the main driver of jobs growth with an increase of 28,400 jobs in the last 12 months. Jobs in the Texas oil and natural gas extraction sector also increased by 8,100 in the last year.

In addition to the growing demands of Oil production. Energy companies will also be in the hot seat to build more diverse forms of energy to meet the ever increasing energy demand. The International Energy Agency (IEA) has said that the Oil and Gas sector will have a critical role to play in developing “key capital intensive” clean energy projects.¹ This will represent a huge growth opportunity for Oil & Gas companies that will require a strong workforce and a robust vendor pool.

There Is a Shortage of Workers That Can Support Growth

There may not be the workers needed to meet this growth. TIPRO’s data suggest that the biggest worker shortage is in an area defined by the association as ‘Support Activities for Oil and Gas Operations’. There were 3,823 unique job postings related to this industry sub-sector in October 2022.

There is also currently high demand for workers in the areas of ‘Crude Petroleum Extraction’ (1,573 job postings), and ‘Petroleum Refineries’ (1,143 job postings) in Texas.

The bad news is that demand for Oil and Gas workers – of which there is clearly a shortage – is likely to soar in the next 12 months. This is because crude oil production in the US is expected to hit a record high in 2023, according to data from the US Energy Information Administration (EIA).

The EIA estimates that US crude oil production will reach 12.8 million barrels per day in 2023, up from an estimated 11.9 million barrels per day in 2022, and higher than the record annual production of 12.3 million barrels per day set in 2019.³ With US oil production set to reach record highs, demand for labor is set to surge, and this – coupled with the already high demand for workers – will lead to fierce competition in the hiring market.

The situation is made even more challenging by the fact that the Oil and Gas workforce is ageing, while recruiting young people is proving to be difficult. The average age of workers in the oil and gas workforce is 56, and over half of skilled engineering workers will be able to retire in the next ten years.⁴

The Oil and Gas industry has been warned about the problems that lie ahead as a result of this trend and has been urged to take a series of steps aimed at attracting younger workers to the industry.⁵

endor Management Challenges Will Also Hinder Growth

Another challenge Oil & Gas operators will face as the industry grows is effectively managing vendors. Indeed, the evolving approach to vendor engagement has been highlighted as one of the major recent trends in the Oil and Gas sector.⁶

However, while vendor management is critical to successful Oil & Gas operations, it can quickly become a substantial operational burden. As a result, oil and gas operators are increasingly looking to outsource much of the responsibility to a vendor management partner that can help them streamline the time they spend on invoicing, MSAs, and payments, while getting the best possible service from a trusted vendor pool.

Innovative Solutions Like Workrise Can Help Solve These Problems

Using a network like Workrise can enable companies to efficiently find the workers and vendors they need to meet the energy growth demands.

Partnering with a vendor management solution like Workrise can alleviate much of the burden, through providing the access to a qualified workforce and more effective ways of managing vendors. 

Get in Touch

Workrise can help with these pressing workforce needs, as well as vendor management solutions to improve the efficiency of in-house operations and supply chain teams. Get in touch to learn more.