Utilizing Executive Search Services

By Jamie Ferguson, VP of Global Business Development, Maxwell Drummond

A recent survey by Lloyds’ Banking Group indicated that the strained supply of talent in the oil and gas industry is having a detrimental effect on future growth with 46% of respondents deeming the skills shortage as a hindrance if companies fail to overcome it. As these shortages continue, surges in demand, the need for niche and highly specialized experience and an aging workforce have forced companies to implement new talent acquisition strategies to overcome the present deficits. A common element in many strategies is partnering with retained executive recruitment firms to aid in the search for certain types of talent.

Companies use executive search consultancies for various reasons. Recruiting for unique mixtures of characteristics and skills and for executive leadership positions can be very cumbersome. The time that it takes to properly research prospective candidates, generate interest and qualify them for the position is often more than hiring managers are able to spend on one role. The extensive research involved in executive recruiting ensures that the most highly qualified individuals are not over looked. In a recent study from the Association of Executive Search Consultants (AESC), HR executives surveyed conveyed that they were most likely to use retained executive search for confidential searches, cross border searches, when they are seeking market intelligence and when there are strict time constraints. Executive search is also heavily relied upon to conduct the most challenging and important searches to a company and the practice is highly regarded among leading HR executives, especially for roles in the higher compensation ranges of $200,000 and above. At this level, if the wrong candidate is hired there is a potential for a catastrophic effect on the company’s position with its shareholders or their position in the market place.

Oil and gas companies are beginning to look internationally for talent. Australian companies are looking at the Canadian workforce for skilled workers; companies with unconventional operations in international markets are looking to the US for experience. With the globalization of the industry, the workforce is becoming globalized as well, and streamlined immigration and visa policies are allowing this to continue at a rapid pace. Executive search consultancies with global capabilities can offer companies a more international slate of candidates with various skill sets and experiences.

Deloitte’s TalentEdge 2020 report indicates that recruiting hard-to-find skill sets as a top area of concern for the coming years. With the development of new technology and more innovative methods of extracting hydrocarbon reserves, niche technical skill sets are becoming increasingly important. The networks built by search consultants allow them to quickly identify these types of individuals and build relationships with them. If there are 10 qualified individuals for a certain position in the world, chances are that an executive search firm has access to the majority of them through their internationally developed networks.

Utilizing executive search services takes the guess work out of recruiting for these positions and offers shareholders and company leaders peace of mind that due diligence is being paid to the task.

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.

Onshore China

By Philip de Waal, Vice President Asia Pacific, Maxwell Drummond International

When it comes to natural gas production, all eyes of the international energy industry are on the United States shale sector. However, while the industry is watching the US closely, many other regions are positioning themselves to move into the spotlight. Most notably: China.

Shale has become a key area of co-operation for the US and China. After a 2009 visit to Beijing, President Obama and President Hu developed clean energy initiatives including The US China Energy Co-operation Program and a shale gas initiative allowing China to use experience gained in the US to develop its’ own reserves.

China is one of the fastest growing energy markets in the world and the country is planning to make a rapid entrance into the shale game. According to the US Energy Information Administration, China leads the world in recoverable shale gas reserves with an estimated 1,200 trillion cubic feet. Last year, the country released targets for its 12^th Five Year Plan and a top priority is quickly exploiting the resource in Beijing. 15 to 30 billion cubic metres of shale gas production (roughly 5% of all gas production) is expected to be developed by 2020.

China’s push to boost domestic energy supplies beyond traditional sources and importation has been successful in many areas – it is the world’s biggest installer of wind turbines and the biggest builder of nuclear reactors. But whether they can overcome the hurdles associated with shale gas exploitation? It remains to be seen.

First issue is the lack of technical knowledge required for the development of shale fields. The region can look to the International Oil Companies already in play there, such as Shell and Hess, to acquire this, as well as continue to invest in US shale plays. China’s top three oil majors have all made significant investments in US shale gas assets in the last 12 months, such as those of Devon Energy and Chesapeake Energy’s stake in Colorado and Wyoming acreage, with a goal of obtaining knowledge and technical skills to help in the development of their home country’s resources. Talent shortages will no doubt plague the nation as well. Companies with plans to operate in the region, and those that already, must be proactive in their recruiting efforts and develop talent management strategies that bring in a workforce with the technical know-how the country so desperately requires. Further hurdles to overcome will be the publics’ negative perception of the methods used to extract reserves, as well as the country’s water scarcity, brought on by droughts the country faces in the Northwest and Central North basins, which hold three of the four major shale basins.

Once the country has developed solutions to these obstacles, it will truly become a major onshore player.

About the author
Philip de Waal was appointed as Vice President Asia Pacific for Maxwell Drummond in September 2011. He joined the Houston office of Maxwell Drummond in 2007 as Business Development Manager. From September 2007 until August 2011 he established a presence for Maxwell Drummond in Africa by opening an office in Johannesburg.

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.

Canadian Oil Sands

By Graeme Edge, General Manager, Canada, Maxwell Drummond

Canada’s energy industry is threatened by the global crunch for talent. A recent report by the Petroleum Human Resources Council of Canada (PHRCC) stated that the Canadian oil and gas industry needs to fill at least 9,500 jobs by 2015. The country is already short when it comes to the number of qualified workers needed to keep growth plans on track, and workforce requirements in the oil sands sector of Alberta will continue to rise as projects continue to come to fruition.

 

According to the PHRCC’s report, Alberta’s oil sands employment is expected to jump by 29% from the 2011. This sector requires a workforce with a variety of skills; environmental engineers are needed in the planning phases, projects under construction require project managers and engineers. Skilled trade workers in construction, manufacturing, transportation and service industry are also in high demand.

 

Thankfully, the Canadian government has recognized that these deficits cannot be filled within the region and measures need to be taken to bring in skilled personnel internationally. Traditionally, the Canadian immigration policy has made it difficult for companies to navigate through the red tape involved in hiring cross-borders. The Canadian Federal Government has announced that its 2012 budget allows reform to immigration programs to better align them with the country’s labor needs. Proposed reforms include modernizing the selection process under the Federal Skilled Worker applications to better reflect the need for younger immigrants with Canadian work experience, creating a new Federal Skilled Trades program and modifying the Canadian Experience Class to better facilitate the transition to permanent residence by skilled temporary workers.

 

Not only does Canadian immigration policy need adjustment but increased collaboration is required to close the knowledge gap between the younger generation of talent and the experienced management preparing for retirement. Talent development is a critical component to all human resources agendas but an even greater importance needs to be stressed in regions where a talent crisis already exist. Companies must implement continual training, not just for new hires, but for more experienced individuals who have the potential to take on leadership and managerial roles. Companies and the industry alike must collaborate with the Canadian government to establish training institutions and ensure clarification on regulations, application procedures and accreditation. Further collaboration is necessary between recruitment departments and outsourced recruitment specialists to identify international talent and attract these individuals to the country.

 

About the author
Graeme Edge joined Maxwell Drummond in 2007 as a Senior Consultant in our Calgary office. In 2011 Graeme was promoted to General Manager, Canada. Graeme has worked in most sectors of the upstream oil and gas industry including major independent operators, EPC contractors, oilfield service companies, subsea and the SME technology sector.

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.

Texas Shale Activity

By Jamie Ferguson, VP of Global Business Development, Maxwell Drummond


The U.S. Energy Information Administration's (EIA) Annual Energy Outlook 2012 estimates that the United States possessed 2,214 trillion cubic feet (tcf) of technically recoverable natural gas resources. Natural gas from proven and unproven shale resources accounts for 542 tcf of this resource estimate. Texas has long been recognized as the key state for oil and gas exploration and production in the United States. Although much has been said about the Gulf of Mexico’s offshore resurgence post-Macondo, Texas’ onshore oil and natural gas exploration and production activity has also been on a strong upswing. The sector has seen substantial growth over the last decade thanks to the emergence of new technologies which have increased the amount of recoverable gas and improved the economics of the extraction of Shale Gas in the state. Not only have estimates of natural gas still in ground increased substantially, but “legacy” fields, once thought of as obsolete are coming alive as new methods of hydrocarbon recovery have come to fruition.

The Barnett Shale in the Dallas area and the Eagle Ford Shale basins are emerging as crucial components in the nation’s natural gas supply. Estimates from the U.S. EIA state that shale gas will eventually account for nearly half of the total U.S. supply by 2035, and this is a conservative estimate according to many analysts. Even though industry has been aware of the Barnett Shale since the early 20th century, the first wells were not drilled until 1993 and the number of permits granted remained relatively low until 2001 when activity skyrocketed. The level of activity peaked in the mid-2000s and although drilling is slower, production continues. Last year, almost 2 tcf of natural gas was produced. The Eagle Ford Shale, too, is a key driver of Texas’, producing more than traditional shale plays. Technological advances in fracking will also play into production in the Eagle Ford, as its high carbonate content is the ideal setting for cutting-edge technology to be utilized.

A study conducted by the Center for Community and Business Research at the University of Texas-San Antonio has found that the Eagle Ford alone has paid $3.1 billion in salaries and worker benefits, and Midland, TX’s 3.5% unemployment rate was the lowest seen in Texas in April of this year, demonstrating the profound economic effect the oil and gas industry has on areas surrounding these prolific Texas basins.

The supply of natural gas is not as dependent on foreign producers as is the supply of crude oil and the delivery system is less subject to interruption. Additionally, this sector of industry is forecast to provide more than 1.6 million jobs over the next 25 years providing valuable employment opportunities for skilled workers at every level.

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.