The oil and gas industries, whether upstream or downstream, are so important to the well-being of the global economy in general and the producing countries in particular.
They are characterised by high capital and operating costs, the risk of life- and property-threatening incidents, the high degree of technology involved, impact on the environment and the need to develop the necessary workforce for profitable, risk-free and environmentally safe industries.
The question of the workforce in the oil and gas industries has been a subject of discussion for a long time now. The reason for that is the worry of the industry whether it has, or it will find, the necessary and well qualified workforce for running its existing and forthcoming operations.
For this to be achieved, the human resources departments have been elevated to a well-deserved level throughout government agencies or private companies.
In its 2011 “World Oil Outlook”, the Opec Secretariat said that “human resource plays a strategically important role in the oil and gas business. The ability to innovate, explore, plan, and execute large-scale, complex development projects in a cost-effective and environmentally-friendly manner requires a highly qualified and experienced workforce”. The report goes on to say that “the future availability of qualified technical talent remains a major challenge facing the oil industry”.
The problem may have started in the 1980s and 1990s when oil and gas prices were so low as to force the organisations and companies into severe cost-cutting programmes which resulted in many people made redundant and leaving the industry for good. At the same time the emergence of new trends in the economies with regards to the service industries may have contributed for the outflow, and especially in the developed countries.
Considering the upcoming expansion of the oil and gas industries worldwide, the need for more qualified and well-trained people cannot be underestimated.
In our region, the task for the industry is not just to keep its production capacity but to expand it to take care of market requirements and the natural decline and attrition of existing facilities. To give one example, the oil refining industry in the Middle East is likely to more than double by 2020 from around 8 million barrels a day now. It will also become more complex and costly to build and operate.
For this reason, one can imagine the task ahead for providing the right mix of engineers and technicians with proper university and institutional qualifications and who have to be inducted in specialised and formal training courses before they become eligible for actual responsibilities.
In Vietnam, a country which is a relative newcomer to the oil and gas industries as its Petro Vietnam company was only established in 1977, has trained about 3,795 engineers and technicians in more than 1,000 courses between 1998 and 2012. On average each individual received eight to 10 courses at a total cost of almost $25 million (Dh91.7 million).
The educational background is important for any human resources development programme. For engineers a minimum of graduate university degree is needed while for technicians a minimum of technical schooling of two years after high school graduation is essential. After that comes the role of training courses done in-house or out of the company with equipment manufacturers, process developers and contractors, where the training is part of their obligations for the successful completion and commissioning of new projects.
The task has become even more formal by the establishment of specialised training companies who rely on in-house instructors and associated trainers from the industry as required. It is worthwhile to encourage such companies and organisations in our region and seek their co-operation with well-established similar outfits in developed countries.
Even in the US and as recently as a few days ago, Austin Industrial, a specialised company for training and development said, “The biggest issue facing the industry is the labour shortage that has been growing worse by the year” and that “the future becoming more desperate”.
At the highest level, BP recently announced its “recruitment campaign for future downstream leaders”, a worldwide programme in “refining, marketing, safety and operational risk, information technology and services”. Each year, thirty candidates are brought “to benefit from a bespoke global development programme that lasts a minimum of three years”.
Let us hope that in our region, educational and training institutes as well as universities are well geared to provide the current and future requirements of the workforce in an industry that is the backbone of the region’s economy. It is no longer possible to employ people without formal education and training in the hope that they will learn on the job.
We cannot afford such luxury in today’s expensive and complex plants and systems.
The writer is former head of the Energy Studies Department at the Opec Secretariat in Vienna.