Worker shortage warning for oil and gas industry

The North Sea oil and Shale industries are headed for a skills shortage. Picture: submitted

A new joint report by OilCareers.com, the international jobs board for the oil and gas industry, and Air Energi, has revealed that the drive towards extracting oil and gas reserves from unconventional sources, such as shale, is putting pressure on the ability of the global energy sector to hire experienced people with the right skills for a predicted jobs boom.

And oil companies in the UK are still struggling to attract enough graduates with the skills they need into the industry.

The new Global Oil and Gas Workforce Survey states that an increased focus on addressing the critical global skills shortage will be paramount as investment increases around the world,.

Estimates suggest that the UK alone will require in excess of 120,000 skilled personnel over the course of the next decade to fully realise the renewed investment in the North Sea and recent shale discoveries. Mark Guest, the managing director of OilCareers.com, said: “As the focus of the energy industry turns to Aberdeen and Offshore Europe this week, it is clear that attracting today’s highly mobile workforce has never been more pertinent or more challenging given the intense global competition for talent.

“Looking beyond unconventional plays, there has been a noticeable move by oil and gas majors into deeper waters to access reserves. Extraction is complex in high-pressure, high-temperature environments meaning innovative technology and the skilled workers needed to operate it are crucial.“

He continued: “Across Europe competition for talent remains fierce as Norway begins to offset declining North Sea production with complex exploration of the Arctic region. The large downstream market in the Netherlands and the European industry is healthy, however it is still faced with the challenge of trying to cope with a lack of skilled workers.”

Mr Guest said the competition for a technologically skilled and mobile workforce was expected to lead to rises in salaries across the industry with more than 60 per cent of all companies responding to the survey expecting levels of pay to increase globally.

He added: “As in previous years, Europe remains a candidate-driven market with a lack of sufficient skills available across the region. In part, this is caused by the ageing population of the oil and gas workforce creating a widening gap in mid-level jobs, and the lure of expat salaries and lifestyles from international projects, particularly in Australia.”

And Mr Guest warned: “Training and development will play a major role in determining whether or not the industry can curb its skill shortage with the increased investment in this area over the first half of 2013 an encouraging start to what is a global challenge.”

In its section on the UK, the report states: “Specialist disciplines are in very short supply. Graduate programmes are not attracting the right amount of people into the industry, and where good grads are found, it’s often a case of too little, too late.

“Several majors have opted to establish their own graduate training programmes but these are not yielding the volumes of personnel required to top up the rosters of today’s mega projects.”

The report adds: “ Attrition is an ongoing challenge, though completion bonuses are helping improve retention and settle rates.”

Investment

Meanwhile, as an estimated 50,000 delegates descended on the Aberdeen Exhibition and Conference Centre for the biennial Onshore Europe industry showcase, the latest Barclay’s Oil and Gas Survey has also confirmed that energy companies are poised to step up investment in the UK Continental Shelf, ensuring the continued prosperity of the region.

Last month the pan-industry trade body Oil and Gas UK forecast that capital investment in the North Sea this year will reach a record £13.5billion, as the development of a number of large offshore fields continues and spending on other smaller discoveries are fuelled by new field allowances.

According to the Barclays survey, 65 per cent of companies are anticipating an increase in capital expenditure over the next two years, with more than 60 per cent predicting an increase over a five-year period.

A Barclays spokeswoman said: “Companies are feeling bullish about the future and their plans to swell their capital expenditure in the region are supported by predictions of a continued high commodity price. Almost 70 per cent of respondents are predicting an increase in the price of a barrel of oil over the next five years, some to a level higher than $120.”

The Barclays report also highlights the skills shortage crisis facing an industry which was “reaching a crossroads.”

The spokeswoman said: “Companies are clear about the challenges which lie ahead should the UK be successful in maximising recovery rates from its mature basins, with the global skills shortage and the region’s ageing infrastructure high on the agenda.Unsurprisingly the majority of those surveyed (66.25 per cent) highlighted the skills shortage as being the biggest challenge facing the industry today.The determination of those working within the energy sector remains evident in the ambitious recruitment targets that have been put in place to help companies implement their strategies. Those surveyed underlined their confidence in the future of the province by outlining plans to employ up to 23,000 new staff in the next five years.”

Walter Cumming, head of oil and gas for Barclays Corporate Banking, said: “It’s becoming increasingly clear that plans are being drawn up to ensure exploration and production activity continues for decades to come.”

He continued: “There is clearly a desire to add a high number of skilled staff to the North Sea workforce and drive forward the planned activity over the coming decades. There are undoubtedly challenges which must be overcome if this is to be achieved, but with the unemployment rate among 16-24 year olds standing at 20.9 per cent, compared to an overall unemployment figure of 7.8 per cent according to Government data, there is not only a need but importantly an opportunity for the industry.”