The Great Crew Change: What’s Next for the Oil and Gas Industry’s Workers?

1. The Great Crew Change: What’s Next for the Oil and Gas Industry’s Workers? Todd Burdette Rich Milligan October 17, 2013 P2 Confidential

2. Abstract • The upstream oil and gas industry is undergoing what’s widely referred to as “The Great Crew Change.” Thousands of seasoned petro technical professionals (PTPs) are set to retire in the coming years; a development that will leave this evolving industry and its many complex projects in the hands of the less experienced. Ready or not, upstream companies are already facing this experience and knowledge gap that is taking shape and sure to widen. • How did this crew change come about? • What are its implications? • What approach should oil and gas companies take? P2 Confidential

3. Changing of the Guard P2 Confidential

4. Contents Retiring Baby Boomers Potential Implications The Millennials The Important of Learning Case Study- P2Support How to create the Millennial Organization Q&A P2 Confidential

5. Retiring Baby Boomers • Retirements are in progress and roughly half the industry will retire in 10 years 1 • “The big crew change is happening now and will be mostly over in five years," 2 • By 2014, the flow of younger to experienced petro-technical professionals only about 17,000, compared with roughly 22,000 2 • Net shortfall of 5,000 1 – Rigzone.com 2 – 2011 Schlumberger Business Consulting P2 Confidential

6. Potential Implications – Drillers P2 Confidential

7. Potential Implications A 20% reduction in performance today would mean approximately $35 Billion in economic costs 20% of E&P professionals is roughly equivalent to 80,000 employees (with <5 years experience) Information courtesy of J. Ford Brett – President, PetroSkills P2 Confidential

8. The Millenials – The Industry’s Future P2 Confidential

9. MillennialsDefined – PWC Study • Generation born between1980 and 2000 • Also known as Generation Y or the Net (Internet) Generation • Entering employment in vast numbers • Have a lifelong affinity for technology and internet • Accustomed to ubiquitous digital connectivity instant access to information • Collaborative by nature and trust online social relationships • Desire a fluid balance of work and social life • Strongly believe in training and one-on-one mentoring P2 Confidential

10. Why Millennials Matter Why Millennials matter 15thAnnualCEOSurvey,PwC,2012

11. Changing Workforce Diverse Generation Gender Culture Different Work Styles Collaborative Morevirtual communication AdditionalLearning Options Changing Expectations Workingwithcuttingedge technologytorespondto marketdemands Desireforgreaternon- financialopportunities:L&Dis topchoiceforemployee- providedbenefits P2 Confidential By 2020 the number of millennials in the workplace will double to approximately 50% of the workforce. Can you turn this trend into a competitive advantage? Millennials already form 25% of the workforce in the US and account for over half of the population in India.

12. Behaviors of Millennials Loyalty-lite Development and work/life balance are more important than financial reward A techno generation avoiding face time Moving up the ladder faster The power of employer brands and the waning importance of corporate responsibility Wanderlust Generation tensions Learning and Development is one of the most significant factors in employee selection P2 Confidential

13. Additional Complications • A struggle to support how employees interact and engage today. • Unspoken knowledge is not captured, stored or shared • Cannot be distributed or learned with the right contextual relevance • This complex landscape needs to be actively managed and supported at the Enterprise level • Must ensure that firms develop and attract talent for sustainable competitive advantage • Key to attracting and maintaining the Millennials P2 Confidential

14. The Importance of Learning

15. GlobalTrends Global Trends Technology Social-centric(socialmedia), collaborative, crowdsourcing,opensource,rapidand iterative changes,mobility Technology Workforce Baby Boomersretiring,Millenialsbecome majority,talent wars,emergingprofessions Workplace Workforce Workplace mobile,global, virtual, shrinkinglifespan ofknowledge 0

16. Enterprise Learning Ecosystem The Enterprise Learning Ecosystem •Anyone canparticipateat any time •Individualstake multiple, simultaneous roles •Dynamic,constantlyevolving cadence Onthe joblearning, Peer knowledge sharing,Enterprise socialnetworks Blogs, Wiki’s •Set relationships •Expectations forcontact frequency •Generaldirectionfor whatis shared Huddles,Impromptustatusmeetings, Mentoringprograms, Communities of practice •Defineddesiredresults atstart •Open,self-directedparticipation •Fixedduration •Ad hocteamswithlittleorno structuregoverninginteractions Idea markets, Crowdsourcing Innovationcontents Unstructured Organization •Definedcurricula/learninggoals •Set participantlists •Establishedagendas •Fixedcadence Instructor-ledclassroomcourses, Computer-basedtraining, Assignedlearning plans Structured Defined Undefined Outcomes EnterpriseLearning2.0, PwC,2012

17. Realigning Support and Focus Understanding where to focus your Learning spend will help the design of a more balanced Learning strategy to meet organizational-wide needs. P2 Confidential

18. Paradigm Shift in Learning Oldschooldefinition: Learning=Training, Courses,Webinars Newerexpanded definition: Learning= Innovation, KnowledgeSharing, Collaboration,on- demand/just intime access to knowledge “in theflowofdoing work” P2 Confidential Most learning happens outside of the classroom Organizations are moving away from traditional forms of Learning and embracing innovative solutions

19. Context Knowledge “Information is not knowledge” - Albert Einstein • Technical Advancements in Data Capture • Large Databases • Increased Connectivity • Pervasive Data – High Volume • Useful Data • Lacking Context • Without Contextual relevance, overflow of information creates chaos P2 Confidential

20. How to create a Millennial Org

21. Definition – The Millennial Org • Structure • Flexible, team oriented, dynamic and adaptable • Tools and Technologies • High Tech, allowing for collaboration and multi-tasking • Forums, communities, wikis, blogs, chat rooms • Knowledge management • Focused learning environment • Capture and share knowledge with the right contextual relevance • Data Management • Organized knowledge share for easy search and dissemination P2 Confidential

22. Getting Millennial ‘ready’ Organizational transformation is needed to adapt to the significant shifts in technology and culture Recruiting and employee engagement Workplace environment training Development Technology Pervasiveness and skills Contextualize information P2 Confidential

23. What must employers do? To attract and retain Millennials, pro-actively managing your talent essential • Alignment • Business Plan • Talent Strategy • Face the future • Pay attention to pivotal roles • Financial Considerations • Salary – Boomers and Millenials • Training – Balanced Approach P2 Confidential

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25. Questions