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Crucial Skills Gap Puts Oil & Gas Industry in Bind

The world’s energy needs are in rampant ascent.  Despite the U.S. boom in shale gas production and advanced technologies unlocking previously untapped global energy reserves, the International Energy Agency is predicting that the demand for energy will continue to grow by one-third by 2035.

Such a demand is pushing the oil and gas industry to expand the boundaries of exploration and production. But there is an almost cruel wrinkle to this story: For every new technology deployed, for every new well, for every new oilfield, there remains a critical shortage of skilled workers.

The shortage has been dubbed the “Great Crew Change,” a skills gap created by the perfect storm of an aging workforce, the “shale revolution,” and reverberations from layoffs during lean times. This has left the industry with a constricted talent pool pipeline and a mad scramble to recruit, train, and retain engineering and oil field talent.

“In 2008, when the global economy came off a cliff, a lot of organizations cut back and stopped their graduate programs for a couple of years,” said Steve Harvey, human resources director for the North Sea Canada part of Subsea7 in an interview with Offshore-Technology.com. “That automatically means there is a gap in the supply of talented men and women coming into the industry.”

And the need is urgent. A survey by Schlumberger Business Consulting estimated that 22,000 geoscientists and engineers will leave their jobs by 2015. And while the survey says that recruitment of new graduates will likely help close that gap substantially, the one area it can’t compensate for is the loss of experience.

And in the U.K., 98 percent of those surveyed said they were looking to hire more workers; half of the respondents said they lost key workers in 2013 and that the difficulty in finding new staff is the worst they’ve seen since 2007, according to the 19th Oil and Gas Survey from Aberdeen and Grampian Chamber of Commerce and Strathclyde University’s Fraser of Allander Institute.

The needed jobs—many of which didn’t exist five or ten years ago—often demand advanced skills. Many of these new jobs include petrophysicists, oil field mechanics, seismic interpreters, hydrocarbon mud loggers, geomechanics and subsurface specialists, and subsea engineers, among others.

“When I started work as an oil and gas engineer in the late 1970s, I couldn’t have guessed what was to come over the next 37 years,” said Fiorenzo Giuntini, a senior engineer with GE Oil & Gas.  “I’ve seen new technology emerge and totally transform how we operate.”

The oil bust of the 1980s put a major dent in the talent pool. When crude prices fell from $35 a barrel to $10, layoff notices flooded the market; hiring came to a standstill and the industry today, three decades later, is still feeling the pinch.

“A significant amount of technology, expertise and knowledge — know-how — is leaving the industry,” George King, a former mechanical engineer and now an instructor at Lone Star Corporate College in Houston, TX told NPR. “So those of us that are ending our careers in industry are coming back into education, because we have a story to tell — and we have skills and experiences that can be relayed through teaching.”

Training: Industry Lifeline
Training programs are on the rise. For example, BP has instituted the “Challenge Program” a global initiative for new graduate recruits in their first three years with the company. And GE has its Edison Engineering Development Program, a two-year, four-rotation initiative for recent engineering graduates.

“It’s important to obtain some insider knowledge on the industry so work experience placements and internships are a good starting point,” said Rhys Long, a GE Oil & Gas trainee production engineer. “Your experiences on a placement will be really valuable to help you find out which areas of engineering are best suited to you, whether its process, design, mechanics or electrical engineering. The options for engineers in the oil and gas industry are really varied.”

Training is a lifeline for companies. A 2013 study, sponsored by BP and conducted by the Society of Petroleum Engineers, found that 53 percent of those surveyed would consider jumping to another employer for lack of training and development opportunities. Seventy-five percent said training and development factored heavily into their choice of employment. The survey also found 25 percent believed a lack of training hurt their careers.

Reaching out to women is another way the industry is trying to close the gap. “I think there has been a ‘good old boys’ kind of network where the oil and gas industry has always been seen as a masculine industry,” Colin McAndrew, human resources and competency manager at Global Energy Group told offshore-technology.com. “I think it is probably a culture thing and a historical thing that has evolved over the years and is now changing because more women are looking to get into the oil and gas industry.”

The industry attracts more males because it’s intrinsically linked with heavy machinery and technology and has “traditionally been viewed as one that’s tougher for a woman,” said Sonia Ferrioli, growth and strategy lead for GE Oil & Gas. “But there has been an evolution over the past decade and now the oil and gas sector needs more women – we bring a different viewpoint and perspective that can contribute in overcoming the barriers ahead.”

Harvey told offshore-technology.com: “We are always looking to attract female graduates, but the issue I think is one of making the industry attractive to women. We need to engage far earlier in the education of women and to say that a career as an engineer can be a satisfying as opposed to a career as a nurse. We need to make it less about the machismo side of things. The industry is actually quite a flexible place to work; there are some great employment practices, where women can very much manage a career and a family.”

A more radical solution to the skills gap in the oil and gas industry is to reach across industry boundaries, says Simon Coton, managing director for NES Global Talent, a specialist in the oil and gas recruitment sector. Plucking engineers from heavy industry could help bridge the skills gap, Simon told EngineeringLive magazine.

“Structural engineers and electrical engineers from, say, the shipbuilding or infrastructure industries can be retrained to work in oil and gas because they use a lot of the same skills,” Simon told the magazine. “This phenomenon is not unique to the UK; the US and Australia are also concerned about its oil and gas labor force given expansion within the industry and the retirement of skilled, experienced workers.”

The practice of dipping into other disciplines goes for scientists, too.  However, just like engineers coming over from other heavy industries, scientists jumping into oil and gas will need additional instruction, too.

“Geologists coming from the environmental, coal, glacial, volcanology, and mineral industries have an excellent basic education in geoscience,” Daniel J. Tearpock, Chairman Emeritus of Subsurface Consultants & Associates wrote a company newsletter. “But when it comes to the required knowledge to be proficient in oil and gas exploration and development, they will need additional training in certain areas to enter this industry ready to be contributing members of the team.”

And like programs in the advanced manufacturing space, such as “Get Skills to Work,” that are aimed at tapping the skills of returning military personnel, programs in the oil and gas field are doing likewise.

“We’re also looking very closely at leveraging something that GE is very successful at doing in the U.S., which is to dip into the military pool,” Neil Saunders, GE Senior Vice President for Products and Projects at the firm’s Subsea Systems division told the Rigzone website. “[W]e find very relevant and adjacent skills there. Across GE, there’s a Junior Officers program. It’s a leadership program that’s specifically designed for ex-military personnel, so we’re bringing that into subsea as well.”

And OPITO, an oil and gas industry association based in the U.K., runs industry awareness programs for ex-military personnel. The events are held on military bases.  “We want to make sure that these highly skilled individuals are aware of what’s available out there in oil and gas, both onshore and offshore, and how they can transfer their skills and knowledge across into a sector which is crying out for people with a certain level of experience and training,” said Morven Spalding, OPITO’s skills development director in a statement about the programs.

Brock N Meeks is Editor-in-Chief of Ideas Lab.

 

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