Subsea engineering market stands at a crossroads

Nov. 1, 2020
Subsea engineers were once in high demand, but the post 2015-16 downturn was unlike anything previously experienced.

Mike McKinley, Subsea Innovations

Subsea systems engineers and subsea controls engineers were once in such high demand that we could name our own salaries. Daily calls from headhunters, and stress from having too many offers, was a way of life. But now, here we sit on the mat, dazed from the 2015-2016 downturn/COVID-19 combo, trying to piece together a strategy that will keep us moving forward.

More than 80% of subsea field development engineers in the US were laid off over the span of 2015-2017. Some had the wherewithal to retire; some made career moves; and some of us scraped and clawed at every opportunity that arose in the industry.  

The post 2015-16 downturn subsea engineering environment was unlike anything previously experienced. A large portion of senior and principal level subsea engineers had been laid off. Many did not wait for the down cycle to end and either retired or left the industry. Significant industry knowledge and expertise was lost without warning or preparation.

Everything had changed. A complete makeover – cultural, procedural, technical, and fiscal had just occurred before our very eyes. Less than half the number of pre-downturn engineers were tasked with getting the job done, in half the time. A younger workforce, the “new crew on deck,” was feverishly trying to pick up the pieces at most companies. Upstream engineering, procurement, installation and commissioning firms (EPICs) were hit hard. Highly experienced engineers employed at EPICs were some of the first to be laid off.

Shell shock and cold feet brought about an increased use of independent contractors. No more mega subsea developments were being considered; now tiebacks and tie-ins were the new norm. Science projects were a thing of the past. Equipment with the shortest promised lead time was selected usually without question.

With little or no engineering expertise remaining, EPICs and some operators were putting more trust in equipment manufacturers for technical advice; and those manufacturers were often scrambling to pick up the pieces. Then, when the handful of remaining experienced subsea engineers, along with the new crew on deck, were just starting to find their way, we were hit with the Coronavirus.

The post-COVID-19 offshore industry environment will be somewhere between a continuance of the 2015-2016 makeover, and a completely new makeover. If a subsea engineer is not currently employed, his or her first dilemma is whether to stay in the subsea market or not. This is a tough decision, especially for those who have put their heart and soul into this market and their career and are not set up for retirement yet. It is a given that the demand for subsea engineers will continue to decline. One fact that needs to be accepted is that being a good engineer is no longer the primary deciding factor in who gets work.

What will operators need from the subsea engineering workforce going forward? Answering that question, which may be more of a moving target than before, and responding quickly, is what it will take to be successful.

Advanced college degrees are not anticipated to carry significant weight for the post-COVID 19 subsea engineer. Can you get the job done? How fast? How cheap? These are the deciding factors, and this is what operators and EPICs are turning to contactors for.

Operators unanimously agree that the ratio of contract to permanent subsea engineers will continue to rise, with the total number of subsea engineers on the decline. 

Unemployed subsea engineers looking to stay in the industry should put their focus on contracting their services. 

Contract engineers are available from several sources: the independent contractor; small firms with two or three engineers; medium-sized firms with 10-50 employees; and EPICs. The general rule of thumb is that the larger the company, the higher the cost.

For the foreseeable future, operators and EPICs will have significant interest in the small consulting firm that is comprised of two or three reputable engineers. The small consulting firm is a good fit due to the low cost, and it can meet more needs than an independent contractor can. The catch is that this size company is usually in a transitional stage, and will be harder to find for that reason.

If you’re an unemployed subsea engineer, and have decided to stick it out, you should be putting some focus on small consulting firms – or perhaps thinking about starting one up. 

Things are not going to get any easier. The competition for the job you want is fierce. You may not like what our engineering force has become. The dog-eat-dog days are on the horizon. If that is not for you, now is the time to make the hard decision to move on. If, on the other hand, you are staying in…please fasten your seat belts; put your trays in the upright position; and prepare for turbulence.

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