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Downstream employment and recruitment: the wild frontier

Oilfield Technology,

The so called ‘golden age for gas’ has arrived, with increasing worldwide demand and considerable steps having been made towards the commodity becoming a truly global market in its own right. An upsurge in major LNG projects around the world, including those in Australia and the US, has seen activity levels spiraling upwards, with operators and service companies eager to get in on the ground floor and establish strong ties in multiple regions.

Strong recruitment opportunities are available and the ever present need for those with the greatest skills and experience remains but, across the globe, regional differences, financial factors and great uncertainty will continue to provide tough challenges for all within the energy industry.

Reversing fortunes

Forecasts of Asian demand for gas have continued to rise, and while Australia has emerged as the potential top contender to feed Asian appetites, both North America and China itself have ambitions to throw the proverbial spanner in the works. These regions have set their sights firmly on dramatically increasing their capacity to compete with one and other in the decades ahead.

As a result, the development of shale oil has pushed itself to the top of the agenda for many firms, who are now exploring the same gas field as before but for the alternative commodity. While the price of natural gas has fallen dramatically, oil has largely retained its value. Yet, producing oil from these fields can sometimes be far simpler and therefore more economically attractive, depending on the field in question.

Globally, the shift towards more of a focus on such ‘unconventional’ resources has redrawn the map for the energy industry as well as others (the US chemical companies, for example, are also benefitting hugely). The majors with significant petrochemical resources have been said to be emerging as early winners, while all US heavy industries are certainly reaping the rewards of lower energy prices and lower input prices for chemicals. As such, the downstream industry is on a high with far greater opportunities available than previously anticipated.

Latin America

Venezuela, for example, pledged last year to build a number of downstream refineries and other facilities to help kick start the development of its vast Orinoco belt, with the result being more employment opportunities within the country. Venezuela is well prepared to fill these vacancies due to its considerable resident oil and gas experienced personnel. Yet it suffers from a poor track record with international oil companies who can find themselves locked out of their investments and infrastructure at any given moment due to the politics of the country. Given the size of its reserves, Venezuela will never be fully sidelined, but it also may never enjoy the free flow of foreign investment dollars, which other developing nations currently benefit from. Venezuela’s talent pool is fairly solid and could be a good source for other projects in the region; however, the workarounds to their expatriation are significant.

A healthy stock of existing, experienced personnel provides a strong foundation for nations and companies to thrive and develop. Yet the Venezuelan example is far from being the typical situation experienced elsewhere, even in Latin America.

Recruitment uncertainty

Clearly, recruiting the personnel required to service these needs will be foremost in the minds of the executives whose companies hope to capitalise on the political shift towards shale gas production. Again, however, the UK government’s intention to closely monitor and regulate these new activities will lead to more questions about how activity will actually take place, or whether it will even be allowed. This creates additional recruitment challenges for all involved, with concerns likely to centre on how many additional recruits will be required, and the danger of employing too many or too few.

Middle Eastern promise

Looking towards the Middle East, where the lion’s share of the world’s energy reserves rest, approximately 7 million jobs have been created in the Gulf over the last decade alone, yet less than a third of these roles have been taken up by locals. This gap reinforces the importance of petrochemicals and chemicals producers creating greater, more fitting opportunities for the local workforce.

Global gap

This also reflects the general, global skills gap that exists within all sectors of the energy industry, with a shortage of younger working professionals and an over abundance of older staff, a large proportion of which will retire within the next decade or so. The vacuum left behind will bring enormous challenges for all, and could well cause further shifts in focus towards alternative projects or development: not through a desire on the part of the industry to do so, but as a result of a lack of experience and expertise to follow through on the ventures they would prefer.

Key to ensuring the continuing success of all energy industry sectors is being able to find the people that are most needed, and the skills shortage is the big challenging factor. The industry is now having to play catch up to back fill the period when a lot of people chose not to enter oil and gas. Politicians and oil and gas professionals must now encourage and steer the next generation of employees at the earliest opportunity, making sure that younger people enjoy science at school and fully understand and appreciate the world class opportunities within the energy industry that are readily available.

Written by Mark Guest,, UK

The full article can be found in the March 2013 issue of Hydrocarbon Engineering. It is the first part of the magazine’s Employment and Recruitment Series.

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