According to Schlumberger CEO Andrew Gould, the shortage of a skilled workforce is a crucial and ‘underestimated’ factor at the root of ensuring energy security.
Gould and fellow analysts who have kept a close watch on years of underinvestment in new talent know that this has led to a limited and aging pool of skilled workers. And the problem directly affects financial investment as Gould points out: “There is little doubt in my view that the shortage of engineering talent is the single largest factor that stops our customers from investing more.”
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Following a big cost-cutting exercise by majors BP and Shell in the 1980s and ’90s which brought about retrenchments, skilled workers were lost to the industry and it has struggled to get them back ever since. When recruitment began to take off again after 2003, the lack of people and expertise to carry out complex exploration work remained a concern.
Big increases in rig costs over the years have only fuelled the problem. And with the overall cost of exploration and development going up along with oil prices, bigger oil company profits have generally seen a tumble compared to previous years.
THE CHALLENGE AHEAD
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Attracting workers into oil companies is not an easy task, especially in hostile environments. Reports of kidnappings and violence directed at geologists and other offshore workers in countries such as Nigeria are all too common.
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By GlobalDataTwo employees working for oil services company Lonestar were kidnapped in May 2008. Maltese and Pakistani authorities representing the workers are still negotiating with authorities to release them at the time of writing. This is just one example of a reported kidnapping, while many other examples of violence and civil unrest affecting offshore workers and companies around the world exist.
Although political unrest in Nigeria paints an extreme picture of events, companies must nevertheless carry on promoting jobs and find ways to encourage employees to work in unpredictable and sometimes dangerous regions around the world.
SCHLUMBERGER’S SUCCESS
Services company Schlumberger says it has been fortunate in rates of recruitment and retention for almost 40 years.
According to CEO Gould, the company has seen an ‘extraordinary explosion of activity in the last two years’ and has recruited more than 6,000 engineers from more than 200 universities in 80 countries through a rigorous recruitment campaign including opening new training centres in France, Abu Dhabi and Russia.
WHAT THEY HAVE DONE?
Overall, major oil and gas employers have had to increase their presence in the graduate recruitment market, focusing on specialist training days and training centres around the world. Conferences and networking events have also proven popular ground for attracting new recruits.
Governments and external bodies have also had to help. The response to the skills gap across the UK, for example, has seena new academy set up in Britain to tackle the shortage with the aim of securing a workforce for the future. The OPITO academy, funded by the industry, hopes to see quick returns, backed by the UK Government which is eager to ensure the UK oil and gas industry doesn’t lag behind its European and other counterparts.
Figures from UK industry body Oil and Gas UK’s economic report for 2007 show positive progress.
Numbers for 2006 reveal that total employment provided by the oil and gas sector in the UK is estimated to have risen, hitting 480,000, of which 380,000 were involved in domestic production; comprising 30,000 people in oil and gas companies and major contractors, 260,000 within the wider supply chain and 90,000 supported by economic activity induced by oil and gas employees’ spending throughout the economy.
The organisation does, however, say that the number of jobs involved in domestic production is not expected to increase further in 2007 given the lower investment forecast. But an increased demand for people in export markets is not being ruled out.
So while the industry makes steady progress with targeted recruitment strategies to plug the skills gap, it must still battle against the dangers of working in hostile regions set against a global credit crunch where exploration costs are running very high. So before the next wave of skilled scientists and engineers become eligible to retire within the next decade, the industry must step up ways to recruit a skilled workforce to combat the underlying problem of ensuring a stable and secure future for the offshore and energy industry at large.
