In July, Norwegian oil major Statoil announced a new recruitment drive that will increase its offshore ranks by 50 people a year for the foreseeable future. Amid much uncertainty within the industry, it’s a bold move.
Last year, 185, 300 people were in the employ of the Norwegian petroleum sector.
While that is a far from negligible number – after all, the group in question represents 7% of the country’s population – it is 47,000 less than the figure recorded in 2013 for the same demographic by Statistics Norway.
The decline in jobs in Norway’s offshore industry contributed to the country’s highest unemployment rate in two decades last summer.
Like other oil-producing nations, it was hit hard by last year’s historically low prices for the black stuff. This, in turn, has seen several energy companies hold off on exploration and development projects on the Norwegian continental shelf.
In the midst of such uncertainty, Statoil’s recent decision to launch a new recruitment drive should be welcomed by those within the industry as positive news.
Announced in July, the Norwegian government-controlled group is aiming to swell its ranks by more than 50 new skilled workers annually “in the years ahead”.
“We believe it will be possible to maintain profitable and sustainable production at the current level on the Norwegian continental shelf up to 2030 and beyond,” says Aksel Stenerud, Statoil’s vice president for human resources, development and production Norway. “However, this means that we must continue to attract talented personnel with good qualifications.”
The drive to attract fresh graduates and skilled workers
Statoil has a tough job on its hands. School places for vocational education and training in the oil and gas sector – once hallowed spots in collegiate circles – are on the wane, particularly within the processing field.
Apprenticeship applications, too, are the lowest they have been for some time, with some younger people opting to go into the fishing and aquaculture industries instead.
But the move coincides with what has been an uptick in the company’s fortunes of late. Two weeks after the announcement, Statoil reported a solid showing for the second financial quarter, with adjusted operating profit sitting at $3.02bn – up from $913m during the same period in 2016.
According to Trond Omdal, an analyst with Pareto Securities and a previous business development manager for Statoil in the Middle East, the recruitment drive should be seen as a declaration of intent from a company looking to kick-start new projects.
“It’s not completely unexpected,” he says. “Okay, Statoil cut its capex by 50% last year, but they are guiding for higher and higher investments in the second half of this year. There are new FIDs [final invest decisions] and new fields set to come into play over the next few years.”
Initially, the majority of recruitments will be within the processing space, says Stenerud, in a bid to plug a skills gap that has widened in recent years. Other areas the group will look to fill will be electro-mechanics and logistics, although Stenerud concedes the need to do so “will no doubt vary from year to year”.
New projects equals more jobs
The variables associated with recruitment mean it might take some time before an even level is achieved, but Statoil’s proactive approach has already garnered praise from industry bodies, including trade union Industri Energi.
“The strategy will help to ensure the proper capacity, predictability and renewal,” said Dag Unnar Mongstad, a representative of the body, at the time of the announcement. “It is also a response to the workforce attrition we face within these disciplines. We hope this will contribute to a positive trend in the number of applications for education in these subjects.”
One project that will certainly require more manpower is the Johan Castberg operation, which is set to be one of the most ambitious undertakings in Statoil’s portfolio.
Scheduled to come on stream in 2022, the offshore field in the Barents Sea could be in operation for over 30 years, says the group, which plans to invest NOK 1.15bn per year in the site.
Statoil has already stated it will be looking to attract offshore personnel from Finnmark county, located on the tip of northeast Norway, to man the rigs.
For Omdal, the project – and its potential to lure Norwegian graduates and skilled workers – has wider implications, suggesting that the offshore oil and gas sector is bouncing back.
“The medium term looks very healthy,” he says. “The key behind this is that both operational and production costs have come down significantly, meaning companies can now expect to break even from new projects.”
Statoil has also evinced an ability to adapt to challenging market conditions. Last year, it was able to harness the slump in oil prices to its advantage at the Johan Sverdrup field in the North Sea, achieving a breakeven price of $25 per barrel after reducing costs and lifting production forecasts.
Do younger people want the black stuff on their hands?
Such news stories can make all the difference to those weighing up whether to pursue a career in petroleum engineering or not, says Omdal. Given the unpredictable nature of the industry – particularly when it comes to pricing – fluid recruitment is never a given.
“It’s always been cyclical,” he says. “Yes, applications for petroleum engineering higher education have dropped, but this has happened before. When I started working in the industry in 1989, oil prices were really low, but six months later there was an upswing and companies started focussing on growth and offering more placements.”
Then there is also the rise of a new, more environmentally-concerned generation to consider. Norway’s plans to ramp up oil and gas activities have been reported, in some areas of the press, as being in direct contravention of the Paris Agreement – hardly an incentive to sign up with one of the world’s largest offshore oil and gas operators.
“Things have definitely not been helped by exaggerated headlines about the industry’s decline and the growth of renewables,” says Omdal. “In my view, this has fed into a lot of scepticism from the new generation over oil from an environmental perspective. It will be very interesting to see if that changes when we start to see a new upturn in the industry.”