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The oil and gas industry is grappling with significant challenges in attracting younger talent, an issue exacerbated by the sector’s negative perception among younger workers. An article from Bain and Company says that young professionals are drawn to careers in tech or innovative industries, which are often seen as more dynamic, and attracting talent to the old-school environment is challenging.
Despite its substantial revenue and the critical role it plays in global energy supply, the oil and gas sector struggles to compete with these industries in terms of career opportunities, corporate culture, and perceptions of senior management. McKinsey, referencing the 2022 U.S. Bureau of Labor Statistics population survey, highlighted that approximately 400,000 employees in the sector are nearing retirement age and are expected to retire within the next decade.
This talent squeeze is further complicated by the reliance on tribal knowledge, which is not recognized as a formal procurement practice. As the industry faces a significant experience gap with many veteran workers nearing retirement, there is a growing need to formalize and document this tribal knowledge through initiatives such as mentorships, internships, and on-the-job training.
Culture-wide transformation is proving to go further in preserving the technical skills, industry knowledge, and institutional expertise that are at risk of being lost as the older workforce retires.
Emerj Senior Editor Matthew DeMello recently sat down with Faraz Shahid, Supply Chain Center of Excellence Lead at Cheniere Energy, and Neil Lustig, Chief Executive Officer, Arkestro, to talk about the importance of adopting a combination of technologies and a mindset open to change for solving complex problems and improving operations, particularly in the context of leveraging AI and other digital tools.
Cheniere Energy is a full-service global provider of liquefied natural gas (LNG), engaging in gas procurement, transportation, liquefaction, vessel chartering, and LNG delivery, with operations at two major LNG terminals in the U.S. Arkestro is a tech company that provides clients with a predictive orchestration platform that leverages machine learning and data science to optimize procurement processes.
We bring you two key insights from their conversation:
- Prioritizing digital skills and modern tools for talent retention: Companies must focus on upskilling their workforce in digital competencies and adopting advanced tools to attract skilled talent.
- Accelerating technological adoption and managing change to stay competitive: To remain competitive, companies must proactively adopt technology in uncommon areas, such as HR and communications, while addressing change management and employee concerns.
- Adopt a multi-technology approach: Address challenges with a blend of technologies, such as generative AI (GenAI), machine learning, and statistical models, instead of relying on a single tool for comprehensive problem-solving.
Guest: Faraz Shahid, Supply Chain Center of Excellence Lead, Cheniere Energy
Expertise: Supply Chain & Value Chain Management, Cost Reduction, Value Creation
Brief Recognition: Faraz Shahid is the Lead of the Supply Chain Center of Excellence at Cheniere Energy. He has extensive experience in devising strategic plans and driving improvement initiatives for end-to-end business processes. He earned his Masters in Purchasing and Supply Chain Management from Robert Gordan University.
Guest: Neil Lustig, Chief Executive Officer, Arkestro
Expertise: Strategic Partnerships, Consulting, Go-To-Market Strategy
Brief Recognition: Neil Lustig is the Chief Executive Officer at Arkestro. With over 3 decades of experience in software, hardware, and cloud technology industries, he holds international expertise for operating and expanding multi-million dollar divisions. Before his stint at Arkestro, he worked with SealerAir Corporation, GAN Integrity, Vendavo, SAP Ariba, IBM, and many other companies.
Prioritizing Digital Skills and Modern Tools for Talent Retention
Faraz opens the chat by highlighting both opportunities and challenges in the evolving landscape of supply chain roles, particularly in the oil and gas industry.
On the positive side, automation is transforming jobs by handling transactional tasks, enabling professionals to focus on strategic, high-value activities. This shift creates opportunities for growth and innovation in supply chain management.
However, the oil and gas industry faces challenges in attracting younger talent, as many prefer careers in tech or innovative industries over fossil fuels. Additionally, retiring professionals with “tribal knowledge” leave a gap that junior employees, though skilled in digital tools, struggle to fill.
Faraz emphasizes the need for upskilling, as essential tools like Excel are no longer sufficient. Professionals must understand AI, data science, and machine learning to stay relevant. By prioritizing digital skills and practical knowledge transfer, the oil and gas supply chain can navigate these challenges and remain competitive:
“When you think about transition planning or succession planning in that space, there is a need for those who want to remain relevant in the oil and gas supply chain space to have a massive and deliberate focus on digital skills and how they can augment and support the AI machine learning or simple digital skills.
Gone are the days when you could think, ‘Oh, because I’m really good at Excel, I’m good enough for the supply chain.’ No. While not every supply chain person needs to be a data scientist, the fundamentals of how data science works need to be understood by everyone.”
– Faraz Shahid, Supply Chain Center of Excellence Lead at Cheniere Energy
Neil agrees with Faraz’s sentiments and says that adopting AI and advanced tools is becoming essential to attracting top talent across professions. He compares it to programmers expecting coding copilots or salespeople relying on tools like Salesforce.
Without such technologies, companies risk losing skilled workers who prefer roles focused on meaningful work rather than repetitive tasks. This shift will also impact supply chain roles, making investments in modern tools critical for staying competitive.
Accelerating Technological Adoption and Managing Change to Stay Competitive
Neil emphasizes the importance of working with forward-thinking leaders who embrace technology while acknowledging the challenges of change management.
He explains that his company prioritizes tech-forward clients who actively explore the potential and limitations of new tools. They refrain from working with those resistant to technological change, as convincing them to adopt innovation is often unproductive.
However, even with progressive companies, change management remains critical. The Arkestro CEO stresses that just because technology is user-friendly doesn’t mean it will be seamlessly adopted; leaders must address the human aspects of change.
He also highlights a common fear associated with AI among stakeholders and subject matter experts, in particular — that it may lead to job replacement. This Displacement concern can create unease among staff, especially if they feel their work is being used to train their eventual replacement. Neil suggests that leaders must address these fears openly and directly, combining strong forward-leaning leadership with efforts to ease concerns at all organizational levels.
Faraz partly agrees with Neil and says that while some companies embrace technology, others hide behind “prudence” to delay adoption, risking irrelevance. He believes the oil and gas industry is on the verge of significant change, driven by tools like digital twins, which improve safety and efficiency.
As these technologies gain acceptance, they will likely impact other areas like HR, supply chain, and communications, much like how platforms like X (formerly Twitter) have become essential for business. He emphasizes the need to adapt rather than delay.
Adopt a Multi-Tech Approach
Neil shares examples illustrating how technology, especially AI, can transform supply chain management and operational efficiency. He describes a case involving a company with assets in 110 countries that faced challenges due to redundant, obsolete inventory and a lack of uniform procurement channels.
Using AI, they streamlined inventory management, identified and eliminated redundancies, created global blanket purchase agreements, and implemented vendor-managed inventory systems. This approach improved supplier diversity, reduced transactional inefficiencies, and enhanced supply chain resilience by creating centralized hubs similar to Amazon’s distribution model.
Faraz builds on Neil’s points by emphasizing the importance of using a combination of technologies rather than relying solely on one tool. He points out an article noting that while ChatGPT is effective with language, it struggles with math, highlighting that generative AI isn’t a one-size-fits-all solution.
Instead, the solution lies in understanding that specific problems may require a blend of generative AI, machine learning, statistical models, and other technologies tailored to address the issue at hand.
He also stresses the value of a mindset open to change and continuous improvement. Referencing Charles Koch’s book Good Profit, Faraz notes that experience should not breed arrogance or resistance to new methods. Even if current processes seem sufficient, they should be re-evaluated for better approaches. Change should be embraced not for the sake of change but for continuous progress and improvement, which is essential for effectively integrating new technologies into operations.
“Experience is great unless it leads to arrogance and resistance to change. When you see people who say,’ Well, what we do today is good enough.’ Like that’s, it’s never good enough. If it’s a better way to do something, you should explore it. You should understand it. Not change for change’s sake, but change for continuous improvement is always important. That’s part of the philosophy you have to take to embrace any technology.”
-Neil Lustig, CEO of Arkestro
