Diversification in the Oil & Gas sector – is it here to stay? May 16 2019 | David Halliday

David Halliday

David Halliday

Pride. Often, a force for good. That lusty, unrelenting driving force behind business growth, entrepreneurial spirit, parents shaping their prodigy and even the dullest of all suburban tasks; mowing the lawn. I refuse to believe this bizarre need to make one’s lawn more stripy and uniformed than Bob next door is anything other than a large helping of pride with a side of competitive edge.

Let’s cast our mind back to three years ago. May 2016, Brent Crude selling for $45 per barrel and the industry still wide eyed with horror from the Q1 2016 average price of merely 32 bucks. Many companies sent sales and business development resource, at significant cost, to the far corners of the globe. Like a Victorian expedition, staff were to come back to the old country with bounty from the new world. Guess what they found? Yup, you guess it. Nothing. The global oil price crash was exactly that. Global.

Sure, meetings happened and opportunities for collaboration were discussed, the few contracts that were around were awarded out of absolute necessity. However, the stark reality was your customer was in the same boat, workload at zero and determined to make themselves temporarily indispensable by engaging with the supply chain.

“how’s business”

“great – really busy with diversification projects”

Too proud to state that collectively we were really struggling. We proudly told everybody who would listen, that we were diversifying. It became the buzz word, the new energy that our ailing industry needed to keep it alive. Networking events and seminars sprung up to help identify where companies could diversify. Scottish Government funding was made available for innovation and market development. For some it may (consciously or unconsciously) have been a diversionary tactic, but those who were serious made the best of it. The pride that resides within the people in our industry shone through. That driving force for good.

Fast forward to late 2018 and what we hope is a more sustainable and controlled recovery, I wonder who is still touting the “diversification” banner? Is it back to business as usual? Tucked back up under the comfort blanket of familiarity.

I would urge those of you who made a concerted diversification effort to keep up the momentum, allocate the right level of resource to it and don’t walk away.  The most harmful action we could take is to walk away and back into our oil industry bubble. I know from personal experience the resistance I have overcome, even to get a foothold in the renewable energy sector.  Its been hard fought. I have been told outright, the reason we don’t want to engage with the oil and gas industry is because as soon as the oil price rises, we will be dropped like a bad habit. 

It’s exactly the same issue those who were made redundant faced when trying to apply their transferable skills into new sectors. Employers deliberately putting CV’s from the oil industry to the bottom of the pile, history told them they would be left high and dry when the oil industry picked up.

For those who maintain their integrity, who do the right thing for these new customers, it will be the right decision long term and paramount to the long-term sustainability of the organisation. Regardless of the cyclical nature and the buoyancy or otherwise of the oil & gas industry, diversification needs to be the new norm. Those who refuse to start the diversification journey or abandon it on a whim will end up floundering whilst others flourish. 

Anyway, off to fire up my lawn mower…….

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