The human factor is vital for growth

The expansion of the oil industry worldwide is expected to keep pace with increasing demand as new facilities are constructed and the ageing ones modernised or replaced.

The scale of this expansion can be judged by taking into account anticipated investments. Opec reckons the sector will commit something in the order of $4.2 trillion (Dh15.42 trillion) between 2010 and 2035. The market survey discussed in this column a few weeks ago indicated that expenditure in the hydrocarbon processing industry this year is likely to be $222 billion.

Daunting problem

While no one doubts the ability to generate the necessary funds, the industry is faced with another daunting problem, that of human resources. Providing adequate workforce for such a vital industry that affects all people and their well-being must be on the minds of every decision maker in the government or related sectors.

Development programmes are increasingly turning their attention to ‘human capital'. However, alarming news and analysis about a ‘talent crunch' has been flitting thick and fast.

The Global Energy Talent, a company specialising in recruitment and training, stresses that the human resource factor in the oil and gas industry in the Arabian Gulf assumes greater importance because of the aim of nationalising the labour force.

It goes on to say that "the average age of production engineers in the region is already at around 51 years" and that "by the end of this decade there will be a 38 per cent shortage in the influx of talented engineers and a 28 per cent shortage of instrumentation and electrical workers".

Schlumberger Business Consulting 2010 Oil and Gas Human Resources Benchmark Study reveals a "big crew change" in the global upstream industry, which will lead to the loss of 5,000 experienced professionals by 2014.

The importance of this survey comes from the fact that the contributing companies account for 30 per cent of world oil production. Yet, in another survey, nearly 90 per cent of human resources executives at 22 top international oil and gas companies conceded the industry faces a talent shortage.

So what is to be done to secure the future growth of the industry? The solution is complex in the sense that experienced engineers and technicians must be rewarded not only to stabilise the workforce and fend off competition but to pass on their experience to newcomers through training or on-the-job interaction.

Process simulators are now available for plants ranging from the most simple to the very complex and could be made an integral part of plant control in a real time environment.

Grooming of staff must begin at the planning stages of projects. Training of young engineers can be achieved by involving them with studies and engineering companies in charge of the project and later on with contractors during the actual execution of the project.

Vendors of major equipment and machinery also have an interest in training the owner's engineers to make sure of a smooth handover.

One must stress the importance of technical training schools to prepare technicians at the entry level before more sophisticated training is imparted on the facilities training centres or on the job.

Governments have a responsibility to enhance staff skills at the educational level by preparing technical institutes and universities to actually serve the industry. But the oil and gas industry is so international in nature that mobility of experienced staff is hard to control.

Companies also have the responsibility to invest in training centres. It is reported that Shell and Exxon are aiming to train 10,000 students annually worldwide with a view to keeping their workforces well supplied. There is so much expansion envisaged in our region that no effort can be overlooked to attract, maintain and retain a happy workforce.

The writer is former head of the Energy Studies Department at Opec Secretariat in Vienna.