By Jamie Ferguson, VP of Global Business Development, Maxwell Drummond
The global energy mix is evolving, fast. The Offshore Technology Conference (OTC) marks a pivotal date in the industry calendar to reflect on the last year and the challenges and opportunities it has presented.
By the end of the century, the industry we know today will be unrecognisable. The BP Energy Outlook 2030 predicts that global primary energy consumption will increase by a staggering 39% before 2030. This escalating demand for energy will mean big changes and staffing logistics will become increasingly important.
In our International Energy survey last year, participants recognised the looming problem of significant resource gaps in people and skills. Reservoir and petroleum engineering and drilling and field operations are expected to be the areas most likely to be affected. Last year, BP publicly expressed concern about find the right people with the right skills to complete new projects in the North Sea. This concern has only intensified in 2012.
We witness a high demand for experienced oil and gas professionals on an international basis. The energy industry is inherently global, therefore it is common for workers to move between energy capitals such as Aberdeen, Houston and Dubai for the right role. People with the right skills are a valuable commodity. There is no doubt the skills gap is a worldwide concern.
The Asia Pacific region is increasingly demanding in terms of both energy consumption and production. Australia has an increased focus on exploration and production both onshore and offshore. However, the lack of experienced professionals in technical disciplines could have serious implications on the timing of project development and completion. In Australia, the skills gap in the natural resources market is extreme as the country is experiencing exponential growth both on and offshore. As more projects reach the sign-off stage, we predict see labour shortages will continue for some time, particularly in the key technical disciplines such as engineering, subsea and subsurface. Our Perth office works with various Australian exploration and production companies, major contractors and service providers who are looking to recruit experienced individuals in the oil and gas industry from places like Aberdeen and Norway, markets which have a high concentration of subsea and offshore production expertise.
The trend for deepwater developments is evident in Brazil, a region experiencing an unprecedented boom in Exploration and Production. The government estimates 250,000 workers will be needed for the development of new oil fields over the next four years. From Maxwell Drummond’s experience, government red tape has historically made it difficult to bring foreign talent into Brazil, although there are indications this is changing. Stringent local labour practices, laws governing the importation of workers and an extensive work visa program all contribute to the pressures on recruitment.
Visa issues have been a problem in Brazil but are thankfully are now much simpler. Previously, a company wanting to employ an expatriate had to prove the skills they were looking for were unavailable locally. Nowadays, although a company wanting to bring in foreign talent will still face paperwork, a work visa will be granted in 60-90 days if all the proper procedures are carried out. These small changes are vital in order for Brazil to meet its global potential.
Africa has also benefited from an improved regulatory regime. The continent as a whole has long been tainted by above ground risks and lack of a legal framework but as companies are gaining an understanding of how to deal with the local political environment, more attention is being drawn to the newfound oil reserves. As expected, this new activity is leading to a talent shortage in the region. However, African countries are already making a significant attempt to attract top managerial talent to the region. There has been a steady rise in both permanent and contract salaries and it is expected the increase in average executive compensation will continue. While senior and middle management typically comprises expats, technical specialist roles are more commonly being filled by local citizens, an indication that developments in training the regional workforce are gaining pace. An increasingly common request from our African client base is to re-attract the national diaspora back to their home country. As the region matures we expect this trend to continue and become increasingly important.
Whilst changes in regulations are welcome, often other solutions are required to attract and retain new talent to the oil and gas industry. In Canada, there is an increasing trend for workers with experience in natural resource sectors to transfer their skills to the Canadian oil sands projects in order to plug the skills gap. Ernst and Young’s Human Resources in Canada’s Oil and Gas sector report revealed that Alberta will be an estimated 77,000 workers short in the coming decade, partly due to large projects such as those around Fort McMurray in Alberta and associated pipeline projects. Whilst skills transfers can be a solution, we would urge the industry to be cautious. Some skills are less transferable such as those of petroleum or reservoir engineers or people working in drilling and completions who specialize in the Oil Sands market. Therefore, it’s important for the industry to attract the young qualified engineers into the sector and into Canada.
With evidence that a skills gap affecting some locations may last up to 20 years, we believe one potential solution is collaboration. Geographical regions must now begin to share knowledge and experience, technology, business models, operations and maintenance practices to benefit the industry, individual businesses and employees. This way, we will fulfil the potential of each industry and secure the brightest energy future for all.
About the author
Jamie Ferguson joined Maxwell
Drummond’s Aberdeen team in 2006 and by July 2011 was promoted to Vice President
of Global Business Development. Jamie has extensive experience managing
executive level searches for clients spanning the oil and gas value chain and
has deep industry networks developed from working on assignments in over 20
countries on 6 continents.
Maxwell Drummond International is a world leading retained search consultancy
offering professional search services to clients in all sectors of the energy
and natural resources industries.
Mark Froggatt joined Maxwell Drummond’s Houston team as a Senior Consultant in 2012. Mark has held a range of executive and advisory roles in the oil and gas sector over 20 years since graduating in Law from Cambridge University. He maintains close links with many UK- and US-based majors and independents - both exploration and production and services companies - and as a fluent Spanish speaker has undertaken several projects in Mexico and other Latin American countries
