Skills shortage: a barrier to oil and gas growth

Despite an overall positive outlook for the oil and gas industry in 2014, senior oil and gas professionals, in response to a survey from DNV GL, have predicted that a deficit of skilled professionals will be the biggest barrier to the growth of their businesses in 2014.

The industry’s shrinking pool of engineering talent has topped industry leaders’ list of professional concerns for a second year running; a trend that is driving up salaries to unprecedented levels in some areas. The respondents to the survey said that the median daily rate they are willing to pay individual contractors in technical areas with a particular expertise shortage is US$ 1000.

Key findings

The research and survey also found the following:

• The overall outlook for 2014 is confident among industry professionals with 88% being optimistic about this year.
• 47% consider skills shortages as the top barrier to growth.
• Globally, the positions that will be hardest to fill within the oil and gas industry are project managers, who are most in demand in the Asia Pacific region where many of the world’s largest projects are currently located. Also in demand globally are offshore engineers and safety and risk engineers.
• Skills shortages are most acute in North America given the rapid growth of shale oil and gas production and the changing nature of projects.

Comments

Elisabeth Torstad, CEO of DNV GL Oil & Gas said, ‘the sector is increasingly moving into challenging environments which require technical expertise to provide solutions, yet many companies are faced with an ongoing skills shortage. This need is driving up salaries at a time when there is already pressure to reduce costs. While technology can go some way to plugging the gap, it can’t fully replace human intervention.

‘The industry needs to take a longer term view of building professional skills, rather than putting the brakes on nurturing talent when the oil price weakens. While we cannot fully duplicate and replace the experience of retiring professionals in the sector; we can work smarter through structured approaches to managing industry knowledge and ensuring that the complete build is effectively transferred to younger generations.

‘A more diverse approach to recruitment would also help to address the issue. The skills it takes to manage the construction of a space shuttle or hospital are not necessarily so dissimilar to what’s needed to manage the construction of an oil platform. And while decisions for global projects are today made in a few hubs around the world, I’m confident that we will employ a more geographically diverse working model in a few years. We will have a talent squeeze if we seek to duplicate the people in the industry today, but not if we are able to utilise the wider talent pool available to us.’