We all know that an oil and gas producing company comprises a wide range of professionals (both technical and non-technical), support staff, field staff, and business partners organized in various interconnected teams and departments. These multi-disciplinary groups work together like a well oiled machine to forward the business of the business, with the ultimate goal of increasing shareholder value in an environmentally responsible manner. But unfortunately, some machines (those poorly designed) sometimes contain too many moving parts, which cost money and get in the way.
I am an engineer, and I am very technical. I’d say 98% of what I do supports the company’s operational plan, whether directly or indirectly. It, and the work that most technical folk do, directly impacts the company’s operational performance by delivering results (okay, we occasionally miss targets, but that’s just a part of our risky business). And although some will argue that I, as an office professional, don’t actually do anything since I am not in the field turning valves and hanging out on Kellys, the work I do do is important (I said “dodo”), or I’d be unemployed.
Anyhow, I have no problem with the work that support staff does. But I do have a problem when the support staff out numbers the technical staff. And I have a problem when the seemingly extraneous support staff increases G&A to the point that it adversely impacts the company’s operational metrics and bottom line. Of which support staff do I speak? It’s simple: IT/IS, HR, and accounting. I love these people, I understand that we couldn’t do much without them, but it is a matter of balance. Different companies have varying ratios of support staff to technical staff; some companies have a very lean tech to support ratio, and for other companies the ratio is too rich. The key is to strike the right balance, and that is often very difficult to do.
I have prepared the following pie chart that roughly describes the ratio of the staff that directly supports most companies’ operational plan versus the staff that does not support the plan.