Automation could replace up to 30% of oil and gas jobs by 2040

05 August 2020 2 min. read

Automation could reduce oil and gas workforce jobs in Canada by up to 30% in 20 years, while replacing up to half of job competencies in the upstream sector, according to a recent report from EY.

"Recent black swan events are pushing oil and gas companies to drive down operating costs and transform how work gets done to improve margins — and the unfortunate reality is that these cuts have resulted in job layoffs," said Lance Mortlock, EY Canada oil & gas leader. "As the prospect of a jobless recovery becomes more of a possibility, companies will be looking to fill roles and add capabilities through technology and automation to increase optimization and reduce costs even further.”

Canadian producers are faced by higher operating costs than other markets, which is putting them under more pressure to find efficiencies in response to low commodity prices and energy transitions.

The sector is expected to pour money into technologies such as AI, robotic process automation, and natural language processing in order to drive down production costs and improve their shrinking margins.

Automation could replace up to 30% of oil and gas jobs by 2040

86,000 people were employed in the exploration and production side of the oil sands in 2019, and EY says that a significant portion of those work activities can be automated. Reductions would occur by natural attrition rather than mass layoffs.

The report found that automation will affect every role and competency in oil and gas organizations. Technical competencies – such as preventative maintenance (95%), managing finances (88%), and operation monitoring (78%) – are the likeliest to undergo automation. Leadership competencies – such as negotiation (13%), managing conflict (18%), and complex problem solving (23%) – are least likely to be automated, and will continue to require human interaction.

Job number changes by job family

In terms of job families, drilling operations (48%-76%) and facility operations (39%-72%) could see the highest level of impact from automation by 2040. Trades, equipment operator, marine and nautical roles will also see a high level of impact, from 55% to 68%.

Job roles in environmental health and safety (30-40%), investor/indigenous relations (24-37%), and land lease operations (32%) will be least impacted by the shift to automation.

EY notes that workers will need to develop skills in managing the interface between humans and machines, as well as less replaceable skills such as critical thinking, emotional intelligence, and data analysis.

"Understanding the impact on different competency types can help individuals, organizations and educators retool skillsets as the shift gradually takes place," said Mortlock. "These impacts may seem overwhelming, but they're not unattainable. Knowing the potential impact on individual competencies, jobs, and job families provides valuable insight into strategically planning the workforce of the future."