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1. Upstream, 27 January 2006
25
In Focus
An industry in need
of a makeover
Glass
half
Oil’s global mid-life crisis
Pages 26&27
Poaching and stalking on the
US oil patch
Students take the plunge
Pages 28&29
empty...
Katrina twists the knife
Page 30
Call to arms in
the oil sands
Alberta newcomers
get warm welcome
Pages 32&33
Oil plc on action stations
UK education system
gets the blame Pages 34&35
Old Father Time
creeps up on Norway
Aker’s TV ad campaign
cracks the popularity nut
Pages 36&37
Asia’s revolving
door
Lifestyle ‘will
save day Down
Under’
Pages 38&39
China is training
an oil army
Indian brain drain
follows the money
Pages 40&41
...glass
half full
Outsiders in
their own land
Every deal cranks up
demand for legal eagles
in Africa Pages 42&43
Petrobras magnet for ONE HALF of the world can’t find
Brazilians Pages 44&45
enough skilled workers to man the
The living is easy pumps primed by champagne-popping
in the Persian Gulf commodity prices. The other half is
Libya hopes to lure pouring cash into training but does not
back its lost talent have nearly enough jobs to satisfy a
Iran’s technical lions vintage crop of petroleum graduates.
led by donkeys Upstream brings its unique global
Pages 46&47 perspective to one of the oil industry’s
Russian time-warp Page 48 Photo: HELGE HANSEN
most intractable problems.

2. 26 Upstream, 27 January 2006 Upstream, 27 January 2006
27
Demographic time-
An industry bomb: the danger is
clear in this plot of
age distribution for
people in the
upstream business,
especially for North
America (the red
in need of a
curve)
makeover
Poor public image damaging recruitment prospects
just as bulk of the workforce heads for retirement
THE GLOBAL oil and gas business CHRISTOPHER HOPSON number of initiatives to attract and
Graphic: SCHLUMBERGER
is facing an uphill struggle to London retain young people in the
BUSINESS CONSULTING
attract and retain people, often due upstream industry, recognises
to the negative image of its there is an urgent need to attract
FEW PEOPLE in oil and gas will cost-control as the right utilisa-
Oil’s global mid-life crisis
environmental and social people coming out of universities fresh blood to replace the large
performance and perceptions of a with first-class degrees it typically number of professionals who will be unaware of the ticking time- tion of people. So I think we will
short-term cyclical industry that means there are less engineers. be retiring over the next decade. bomb created by the industry’s see more power given back to the
fails to offer job security. This applies to every sector, but In addition to the loss of current demographics. centre, to central drilling depart-
Jon Glesinger, managing particularly in the UK. personnel through retirement, the An uncomfortably large pro- ments and the like.”
director of Energy & Natural “In certain areas, such as industry has recognised the effects portion of older professionals will Coupled with this is the possi-
Resources at global recruitment geophysics, there are just very few of ‘staff rationalisation’ be retiring over the next decade, bility of outsourcing. “Companies
group Norman Broadbent, says people around with 10 to 15 years programmes following the mergers at an average age of 55, and there Schlumberger Business Consulting measures the personnel vacuum behind today’s current crop of leaders should ask themselves, what is
one of the biggest issues that of experience,” he claims. among both major Western oil are far too few experienced “mid- the core of my business, what
needs to be addressed to attract He suggest that if 50% of the companies and contractors that career” people in the 30 to 45- ADRIAN COTTRILL 30 and 45 with the experience to remedied by changing the way omy can be reached in less than agements have to be convinced should I keep in house and what
the right kind of people is to make UK oil and gas workforce is going caused the global workforce to year-old bracket ready to fill their London make autonomous decisions on training and development of peo- half that time. that there is no other way”. should I outsource to leverage
the industry look more attractive. to retire in the next five to 10 years shrink from over a million in the shoes. critical projects across key areas.” ple is currently managed, he con- “So we need a new way of Rostand also reckons compa- outside people, including my own
“I think we have done a very to be replaced by people who have mid-1980s to about half a million At the entry-point to the indus- Inevitably things will get worse tinues. “As an industry we are learning where you mix formal nies may need to change their retirees.”
poor job of communicating to the got 10 to 15 years’ experience the a couple of decades later. try, things could improve rela- engineering, where the issue is before they get better. “Without very conservative. For example, it and on-the-job training along organisation from the asset-based Rostand concludes: “The core
public in general just what this industry will not only have fewer “Globally there is a market tively quickly in terms of num- particularly acute. But, says Ros- any appropriate actions, we see takes eight to 10 years to make an with coaching in a blended learn- models created a decade or more of what I am saying is more
industry is all about,” he people overall but maybe also a shortage of skilled personnel and bers of graduates. But in the mid- tand, the findings apply across the mid-career picture improving autonomous geoscience profes- ing package.” No matter that the ago in the drive to focus on cost- recruitment, accelerated develop-
comments. “I think the industry is massive crisis in leadership. much of that is down to the ageing dle of the career path there is a the board of field development only after 2013,” says Rostand. sional. In other industries such as grey heads are so busy in today’s control at a time of low oil prices. ment, better location of people,
not very good at letting people “This could result in power workforce, which is a key issue at missing generation. disciplines. The situation can only be defence, automotive or IT, auton- business climate, he says, “man- “Now the issue is not so much and an outsourcing strategy.”
know it is not just about putting shifts from big Western oil the moment,” says Howard This has been caused by more Those findings were presented
petrol in your cars.” companies to those in Asia, India, Kewney, Chevron’s human than a decade of cutback and con- to participants last month.
A survey carried out by the Latin America and Africa,” he resources director in Aberdeen. solidation, along with the prevail- “In the room we had senior
recruitment group across 1000 suggests. “As a global oil company we are ing image of oil and gas among people from oil companies repre-
people in the energy industry Franklin Boitier, a manager with always looking at how to meet the young, especially in the US. senting two-thirds of worldwide
showed that predominantly people Total in Paris, says one the biggest tomorrow’s requirements. Today in With oil prices rocketing and oil production,” says Rostand.
within the business thought it a recruitment challenges is Chevron our average age is around the resultant dramatic rise in “They came in with an idea that
46 or 47. However, if activity, this personnel vacuum poaching was a solution. They
you went back 20 years has suddenly become of even came out realising it was not.
in the company it greater concern. It looms as a That alone will have an impact on
would have been much basic pinch-point to hobble pro- the industry, I think.”
less than that.” ject progress in the immediate The basic conclusions are sim-
Deloitte says the future. ple. “We need to recruit more
industry is facing a Precious little information young people; we need a large-
complex global about the precise scale of the scale knowledge transfer from
problem, not so much problem has been available, let those close to retirement to accel-
created by an overall alone much sign of industry erate the development of new
shortage of capable reaching a concensus on the way recruits; and current approaches
people but more that to solve it. However, a convinc- like mid-career recruitment will
they are located in the ingly thorough and unique evalu- not work.”
wrong places. ation has just been completed Demand for petroleum talent
It suggests that to that could help alter that. will increase by around 7% a year
remedy this oil “Everybody has been talking in the next 10 years, and on a
companies in particular about the big crew change but global basis the supply of techni-
should follow the lead until now nobody has quantified cal professionals is enough for
of service companies, what it actually means,” says that period, says the report.
A matter of perceptions: many outsiders see the industry as dirty and dangerous, which take a much Antoine Rostand, head of “However, the balance varies sig-
with little in the way of job security Photo: BUSINESS WIRE more global approach. Schlumberger Business Consult- nificantly across the globe.”
Many service ing in Paris, the business man- The major regions of serious
great place to work, and a long- overcoming the image problem in companies have taken bold steps agement arm of that company. shortage of graduates will be
term proposition that they savour what is so often perceived to be a over recent years to What Rostand’s team has done North America, the Middle East
as it is technically challenging. dirty industry. internationalise their operations over the last year is to conduct the (a lot of oil and not a lot of peo-
However, when the same group “We have to prove what we are and invest heavily in recruitment first real study to quantify the ple) and to some extent Russia.
was asked about what people doing all the time. When you go and training. global challenge that the industry On the other hand, Asia and Latin
outside the business thought out onto the street and talk to “I think that when you look at faces. They have carried out a America have “abundant excess”
about the industry they said the people you convince a lot of them where the oil price is today and benchmarking survey of more of technical graduates from
complete opposite — it is a bad of the value of our industry. You where it looks like being in the than 30 oil and gas companies emerging sources such as
place to go, has a hire-and-fire have to go out there and talk to future it will sustain significant and nearly every university Venezuela, Mexico, China, India
mentality, and is dirty and the teachers and pupils in the levels of activity on a worldwide involved in petroleum studies and Indonesia.
dangerous with a poor safety classroom,” he suggests. basis,” says Michael Salter, chief around the world. This means companies will
record. Oil companies are beginning to operating officer of the Aberdeen- Their report, Surviving the have to recruit from new areas —
A major new report looking at recognise that globally they need based Abbot Group. Skills Shortage, examines global from where the graduates are, not
the global issues surrounding to increase the pool of labour, as “I think we have an industry supply and demand trends for where the companies want them
recruitment and leadership in the shuffling around staff within a now that has got some confidence petrotechnical professionals, to be — and this presents chal-
upstream business, produced by large organisation or poaching to go out and hire people the way how companies are reacting, and lenges for the established models
Norman Broadbent together with from competitors does nothing to it did in the 1980s. However, it what best practices could be currently in place at most inter-
the UK’s Energy Institute and solve the long-term overall will still be a cyclical business, but imported from other industries. national operators.
Deloitte, is due to be unveiled next problem. maybe the cycles will be much Much emphasis naturally fell The mid-career problem is
month. The Society of Petroleum longer and less steep than in the on the sub-surface disciplines of clearly the most pressing: “There
Glesinger says with fewer Engineers, which has unveiled a recent past.” geology, geophysics, and petroleum are not enough people between
US students take the plunge : Pages 28&29

3. 28 Upstream, 27 January 2006 Upstream, 27 January 2006
29
Poaching and stalking in recruitment rush on the US oil patch
ROBUST commodity prices BLAKE WRIGHT vice president of Shell EP because it is one of the tighter industry. While the practice is guys are hard to come by and the way out to mid-2009. predicament. Though crews
and a shortage of oil and gas Houston Americas. “We are hiring areas of the market.” a problem across all most (head-hunting) Drillers are keen to get new are smaller, the sheer number
professionals have fuelled a across the entire company, The market is tight in each disciplines, it has become consultancies are just carving recruits on board and trained of current newbuild projects is
hiring frenzy in the US oil certainly across what we segment of the business due in more acute of late in the each other up. All that does in ahead of this wave of much greater and is close to
patch. on the perpetual prowl for handle here in the Americas, part to competition from other engineering sector. The end the end is make the same guy newbuildings so that any outpacing contractors’
Operators and contractors new talent and this year is no and we have been very industries and the black eye result is not ideal but it can 20% more expensive.” green hands will be up to abilities to hire new staff.
alike are hot on the exception, especially with successful at that this year. given the oil patch for its mean the difference between Rig contractors are looking speed when the rigs are Late last year, contractors
recruitment trail, stalking project economics shifting “We set out some pretty cyclical and sometimes winning and losing a for talent to run their growing delivered. surveyed in the annual Reed
universities keen on bringing with the higher oil price and tough targets for ourselves unstable nature. significant piece of business. fleet of drilling units. The According to one rig source, Rig Census cited crew
fresh blood into their oily making once marginal and we beat those targets both When recruitment efforts “There are jobs we could get global marine drilling drillers, assistant drillers and availability as the top concern
ranks, but at times having to potential developments on the experienced side and fall short, it is left to but don’t because we don’t community is currently electricians top the list of hot going forward. By comparison,
result to stripping the profitable ventures. new graduate recruitment. We companies to infiltrate the have the people to put on building more than 60 new personnel commodities. and somewhat ironically, in
competition of its managers. “We’re hiring everywhere,” tend to focus in on the ranks of rivals and pluck them,” one engineering rigs with delivery dates slated Land drillers find 2004 rig rates were rated the Hiring across the board: Marvin Odum, executive vice president of
Supermajors like Shell are says Marvin Odum, executive technical professional ranks talent from inside the manager complains. “Senior for as early as next month all themselves in a similar chief worry. Shell EP Americas Photo: BLAKE WRIGHT
Ample opportunities for well-paid career inspire growing number of petroleum engineering graduates in the US
Students
take the
plunge
THE GRADUATON rate of petrol- CANDICE COWIN
eum engineers in the US is still Houston
well below the peak levels
reached during the oil boom of
the late 1970s and early 1980s but with 298 students crossing the
numbers are steadily creeping stage last year.
higher. The University of Texas in
For example, the petroleum Austin has also seen a sharp rise
engineering school at the Col- in graduate numbers over the
orado School of Mines (CSM) past four to five years.
saw peak numbers of close to 200 UT was producing about 25 to
a year in the early 1980s drop to a 30 graduates by the late 1990s but
low of about 25 the following has doubled that rate since 2001.
decade. The number is expected to reach
CSM plans to hand out 45 up to 60 students by the end of
petroleum engineering degrees this year.
this year, up to 70 in 2007, and UT says the improvement is
possibly 100 by 2008. largely a result of its aggressive
“People all over the world for recruiting programme. “We have
the past few years have been an external advisory committee
faced every day with the rising made up of upper-medium to
price of gasoline, crude oil and high-level executives in the indus-
natural gas,” says Dr Craig Van try that meet with us twice a year
Kirk, CSM’s petroleum engineer- to discuss industry issues and
ing department head. needs,” says John Halton, UT’s
“These stories influence high- associate dean of college rela-
school teachers, counsellors and tions.
parents who in turn suggest pur- “About four years ago, they
suing petroleum engineering to pointed out to us the coming
their students, and that is one of a workforce shortage and asked us
combination of several factors to do something about it,” he
driving increasing enrolment,” he adds.
explains. Halton explains that UT goes
Van Kirk adds that the ease of about recruiting petroleum engi-
finding a job, the assurance of neering students as actively as it Total immersion: a University of Texas student gets a taste of offshore
starting salaries in the $50,000- recruits football players. realities during a session at the annual Longhorn Training Camp. The
per-year range and opportunities Recruiters regularly visit high Shell-sponsored camp (above and right) gives students hands-on
to travel the world while working schools to talk with students and training in areas such as production operations and HSE
are also enticing more students. parents who have indicated an Photo: UNIVERSITY OF TEXAS
Larger petroleum engineering interest in petroleum engineer-
programmes like the one at Texas ing. The university is also in regu- training in production opera- worth of money spent on train-
A&M University in College Sta- lar contact with alumni who help tions, drilling and well control ing,” says Halton.
tion are also seeing an uphill identify potential recruits. and health, safety and environ- Amid the looming workforce
trend. Retention of students enrolled ment practices. shortage, petroleum engineers
A&M gave out 880 petroleum in the petroleum engineering pro- Beyond piquing students’ from all of the nation’s engineer-
engineering degrees in 1985. That gramme is also a concern at UT. interest in what goes on in the ing colleges and universities are a
number had fallen to a record low One of the university’s newest field, the camp also serves to pre- hot commodity.
of 162 by 1990. The number rose retention tactics is the Longhorn pare them for the workforce after For example, 100% of the
briefly after 1990 and fell again to Training Camp. graduation. petroleum engineering graduates
191 in 2001. Held annually in Louisiana, “If our students can be produc- from UT have been placed in jobs
However, the graduation rate the camp gives students an tive more quickly we can save within three months of leaving
has steadily increased since then opportunity to get hands-on employers two or three months university for the past 15 years.
Katrina twists the knife: Page 30

4. 30 Upstream, 27 January 2006
Katrina twists the knife
Monster hurricanes making a bad
situation worse for Gulf employers
HURRICANES Katrina and Rita ANTHONY GUEGEL
further stretched an already tight Houston
labour market when the storms
surged ashore Louisiana last
August and September. “Blood, sweat and tears, because
While marine contractors it is not very easy to develop a
along the Gulf Coast fall short of competent professional in a
stamping the word ‘crisis’ on the rushed time,” he replies.
situation, there is complete agree- “It’s an ageing workforce; it’s
ment that the issue is of growing an ageing issue,” agrees one New
concern. Orleans-based industry analyst.
That concern has, of course, The analyst adds that drillers,
been a long time in the making. too, are having a hard time find-
The industry was having prob- ing enough hands to man their
lems attracting new recruits long rigs offshore, and the demand for
before drillers and well service those crews is coming from
companies got busy again in reac- onshore rivals.
tion to the steep rise in oil prices. “The drilling guys are com-
Meanwhile, older, experienced plaining about it,” he says. “The Life-changing experience: personnel who lost houses forced to make other living arrangements and in
hands who did not retire of their historical deal was that you many cases look for employment in the area of their new home Photo: GUNNAR BLONDAL
own free will fell victim to the trained your drillers onshore and
capricious hire-and-fire mentality then moved them offshore and that only experienced crews be industry has taken a more aggres- hurricanes or other catastrophic
amid the sharp peaks and dark paid them more. deployed on their rigs or plat- sive approach to stealing person- events.
valleys of the business. “But the growth has been in the forms out of a legitimate fear that nel from the competition with A spokesman for supply boat
Pipe fitters, welders, engineers onshore drilling, not the offshore novices raise the chances for acci- small wage increases, the Supe- owner Tidewater says lack of
— you name it, companies are drilling, so I think the flow may be dents to happen. rior spokesman claims. manpower is more of a problem
short of it. going the other way.” Superior has managed to keep In order both to aid and retain with its Quality Shipyards sub-
“In my personal opinion, I Diversified well services con- its liftboats and other jobs its employees, the company sidiary in Houma, Louisiana.
think in the last 10, 15 years the tractor Superior Energy, which manned, even after the storms offered around $2 million in “We’re still able to man our
business has demonstrated to the operates crews both in the US passed, but the hurricanes made financial assistance to secure boats,” he insists, but attracting
youth that it’s probably better to Gulf of Mexico and on land, has an already bad situation worse. housing and schools for their new employees to the offshore
take another avenue than to also suffered from fewer people Personnel who lost their children. crewboat business remains a
become an engineer,” argues interested in working offshore, houses were forced to make other It also set up the Superior Cat- “continual challenge”.
Jorge Foglietta, president of according to a company living arrangements and in many astrophic Relief Fund, a non- Tidewater’s crews are “the peo-
Tecna Engineering in Houston. spokesman. cases look for employment in the profit charity supported mostly ple truly in the trenches running
How will he attract new The problem is exacerbated by area of their new home. by employees to assist their co- the boats and we need good qual-
employees to his company? Superior’s customers demanding With this added shortage, the workers impacted by the ified labour to do that”, he adds.
Call to arms in the oil sands : Pages 32&33

5. 32 Upstream, 27 January 2006 Upstream, 27 January 2006
33
Rich pool
Call to arms in the oil sands
Canada goes all out to attract the Chilly charms:
of native
talent on
skilled workers it needs to stoke many new arrivals
to northern doorstep
the energy gravy train’s engine Alberta’s cold,
bleak oil sands OIL SANDS have long played a
THE OIL sands boom under way DANN ROGERS region feel the role in the ancient aboriginal cul-
in northern Alberta is creating Calgary strains of being far ture of what is now northern
record profits for producers but a from home Alberta and producers are eager
lack of skilled workers to com- Photo: AP to tap into that local knowledge to
plete the proposed projects is human resources plan for the help alleviate the industry’s
putting continued growth in industry that builds a platform skilled labour shortages.
question. for future growth and sustain- Syncrude Canada, the biggest
In the coming five years alone, able, attractive employment. Five employer of natives in the region,
Returning the favour: Keith MacPhail and his wife Kathy unveil an additional C$48 billion initiatives have been identified recently recognised the contribu-
the largest personal gift to a polytechnic in Canada’s history at (US$41.5 billion) worth of capital and are at various stages of imple- tion of the region’s First Nations
SAIT last month Photo: SAIT spending on oil sands projects is mentation. with the launch of the company’s
expected in the province. The council has developed fifth annual Aboriginal Report.
In addition to the 33,000 information packages promoting The report relates stories about
Bonavista boss direct, indirect and induced jobs
already on the books, it is pre-
dicted that the oil sands will cre-
petroleum career opportunities
to traditional workers and is
developing an outreach strategy
the role that aboriginals played in
the development of the region
and how they have helped the
puts education ate a total of 240,000 new jobs
across Canada by 2008.
Roughly 60% of these will be
to teach industry how to
approach new workers such as
women, immigrants and natives.
company to establish itself in the
industry.
“The aboriginal community is
inside Alberta with the majority It is developing competency a tremendous source of talent,”
front and centre in the manufacturing sector.
Oil sands companies in the
Wood Buffalo region, which
standards and assessment mate-
rials for occupations in the well
service sector.
says Syncrude president and
chief operating officer Jim Carter.
The industry, he adds, has a
BONAVISTA Energy Trust of confidence. Leaving SAIT I includes Fort McMurray, project One of its greatest challenges great need for highly skilled peo-
president and chief executive knew I could do anything.” they will be hiring about 6000 will be to develop a model to help ple and the aboriginal commu-
Keith MacPhail has put some The Alberta government has new, permanent operations posi- industry understand the factors nity is a logical place to look. Cur-
serious money into addressing pledged to match the C$10 tions from 2005 to 2014. Another of attraction, development and rently, Syncrude has 400 aborigi-
Canada’s demand for skilled million donation when funds 9000 will be required to replace retention for hard-to-recruit loca- nal employees and about 370
workers. come available from the workers lost due to attrition. tions. contractors.
In December he donated province’s Access to the Future The jobs may be available but The hub of oil sands activity in The company sees a local
C$10 million (US$8.6 million) Fund. young people are not flocking to northern Alberta is the town of workforce as an immense asset
to his alma mater, the Calgary- “The $20 million investment them. This is not some inexplica- Fort McMurray, the epitome of a because many new arrivals to the
based Southern Alberta Institute will go towards the ble phenomenon, industry associ- gold rush town in which easy cold, bleak region feel the strains
of Technology, to create the development of a new state-of- ations have pointed out for the money and easy access to numer- of being in a strange land. There
MacPhail School of Energy. the-art Trades and Technology past 10 years. ous vices prevail. is no dislocation shock for those
This will be Canada’s first- Complex,” says Lewis. It stems from the slash-and- “We need to understand what who have called the area home all
ever energy school and the first “This will help SAIT add burn tactics of the industry in the these factors are before we can their lives.
time a department at SAIT has more student spaces to better 1980s and 1990s when low oil develop the model. But once that “When you have the strong ties
been named after an individual. address skilled labour shortages prices engendered a corporate is done we will provide the model to the community, there’s a huge
“As an educator, you hope in the energy industry.” efficiency drive that has caused and related best practices, tolls retention benefit,” says Carter.
the classroom experience and MacPhail, who graduated the shortages of today. There was and resources to industry, and “They are an amazing and signif-
curriculum you provide to from SAIT’s Petroleum never any job security in the they can implement them in their icant labour pool that we can use
students brings them success in Technology-Geology industry and that lesson was human resources practices,” says to meet our very high workforce
life,” says the institute’s programme in 1981, says even passed on from the workers of the the council’s executive director demand.
president and chief executive at that time the industry was past 25 years to their children. Cheryl Knight. “The oil sands are a very
Irene Lewis. called a ‘sunset business’. Compounding that is the fact There remains much to do, human resource-intense indus-
“It is heartwarming to know However, he believes there are that so many older workers are including better forecasting of try, so we need a lot of skilled peo-
that Mr MacPhail’s SAIT still 30 to 50 years left, approaching retirement age just labour supply and demand, and ple. What is more important
experience helped bring him particularly with the oil sands. as these new projects begin. identifying transferable skills, she beyond that is we also do a lot of
success and encouraged him to “I have had a great career The Petroleum Human Re- adds business with aboriginal firms.”
give back so generously.” and am proud to give back,” he sources Council of Canada was “Most importantly, we need to Jim Boucher, chief of Fort
“SAIT was exactly what I adds. “I want to see the Trades created in 2001 in an attempt to find a better way to co-ordinate McKay First Nation, thinks the
needed,” says MacPhail. “The and Technology Complex built address these issues. all the information we create and report is a “good bridge for com-
programme was focused on the and the energy school formed. Its mandate is to define a get it into the right hands.” munication”.
oil industry, which was an area I “But most of all I want to see He adds Syncrude is important
had grown to like over the
summers that I spent working in
it.
the bottleneck opened up so
that there are more students
going through programmes and
Alberta newcomers for the aboriginal communities
because it provides employment
and business opportunities. “(The
“It was a great experience that
provided me with an injection
ultimately coming out with a
technical education.” get warm welcome First Nations) think Syncrude is a
friend of the community and an
important element of the commu-
Suncor eye to the future THE PROVINCIAL government
of Alberta believes immigration
the number of immigrants by
speeding up processing times for
nity’s social structure.
“It contributes a lot to our
SUNCOR Energy is doing its bit These scholarships will focus on from overseas could provide at foreign-credential recognition region for the betterment of our
to fund solutions to Alberta’s aboriginal, immigrant and least some of the answer to the and offering more training to communities. They also are
labour shortages. The Calgary female students — skilled worker shortage in the oil address skills and language gaps. involved in (providing) educa-
oil sands producer recently demographic groups currently sands arena, writes Dann Rogers. The government plans to tional opportunities.”
donated C$3 million (US$2.6 under-represented in Alberta’s A new policy has been unveiled enhance existing programmes
million) to the Northern Alberta trades workforce. designed to attract and retain and services that help immigrants to settle permanently in the
Institute of Technology’s (NAIT) NAIT president Sam Shaw immigrants by helping to support make the transition into Albertan region. Alberta has set a target of
newly unveiled Building on says the institution will train their transition into Alberta’s eco- society, and has set up commu- boosting annual immigration to
Demand campaign. 160,000 skilled workers in the nomic, social and cultural life. nity based ‘welcoming commit- 24,000 people, up from 16,500 in
The goal is to raise $50 apprenticeship and business “While our first priority is to tees’. 2004.
million for the construction of fields from 2010 to 2020. increase the skills and employ- Alberta Economic Develop- “The economic prosperity that
11 centres around the province “There is no question that ment of Albertans, we also recog- ment is marketing the province as Alberta enjoys today was built by
to boost the training of skilled we have got a looming skills nise the importance of immi- the safest place in the world for generations of immigrants and
apprentices and business shortage and all of industry is grants in building a sustainable people to live and work while the Canadians from other provinces
students. going to have to look at a Alberta labour force,” says Mike government also expects to who seized the opportunities that
The Suncor donation will be number of strategies to address Cardinal, the province’s Minister expand its provincial nominee Alberta provides,” says Ed Stel-
used to create the NAIT Suncor this,” says Cathy Glover, of Human Resources and programme to recruit foreign mach, Minister of International
Energy Centre for Piping manager of the Suncor Energy Employment. skilled workers. and Intergovernmental Rela-
Technologies in Edmonton. It Foundation. “This is really “Government will increase its The latter initiative is distinct tions.
will also support 10 about the future and ensuring efforts to let people from other from the Canadian federal gov- “Alberta’s tradition of welcom-
scholarships each year for five that we have skilled countries know that Alberta is a ernment’s temporary foreign ing newcomers into our economy
years for participating students. tradespeople in place.” great place to live.” workers programme in that it is and communities will lead us to
The province aims to increase aimed at convincing immigrants success in our second century.”
Oil plc on action stations in the UK: Pages 34&35

6. 34 Upstream, 27 January 2006 Upstream, 27 January 2006
35
Education system gets blame Unions round on
as subsea sector feels pinch ‘lack of foresight’
TRADES unions in Britain are hands-on experience gained
BRITAIN’S fast-growing subsea focal point for such expertise attractive,” he says. He warns sharply critical of what they per- through apprentices working
business is a prime example of worldwide. that the UK subsea industry ceive as a real lack of commit- with experienced tradesmen,
an industry sector hampered by “Norway can also lay claim could come under threat from ment by many oil companies in with educational support pro-
an acute shortage of skilled with Stavanger and Oslo having other countries with better dealing with the skills crisis, vided in the classroom. “The
people, write Christopher huge expertise. However, we resources. “The problem in the writes Christopher Hopson. problem is the lower down the
Hopson and Adrian Cottrill. have exported a lot of this UK is we have always been very “We have probably failed so far food chain you are in this indus-
Its needs have a high profile in experience, particularly to places short-sighted in that we have in terms of our focus on this prob- try the more difficult it is to get
the country at present, largely like Houston over the years,” he only been able to see a lem,” says Graham Tran, Amicus access to training,” he adds.
because of the efforts of the two- says. maximum of 12 months ahead,” regional officer, who is the Molloy says there are a vast
year-old ginger group Subsea Stevenson says Technip has he claims. unions’ representative on the number of the ageing workforce
UK. certainly noticed oil companies However, Stevenson is industry-government Pilot forum. who would welcome job sharing
“One of the biggest employing a lot more staff on the hopeful the Industry Leadership The unions put the blame for opportunities with a younger per-
challenges facing us is the subsea side. “Man-to-man Team’s Skills Group, on which he the current malaise squarely on son. “Given its stance on such
shortage of skilled people for marking, effectively a double- sits, is developing a good the boom-and-bust nature of the things as employment rights I just
new developments,” emphasised checking mechanism by oil understanding of what needs to oil business, citing a lack of fore- don’t think this industry wants to
Subsea UK chief executive David companies on contractors, is be done. “It will certainly help us sight and investment. change the way it has been doing
Pridden at a recent industry another issue,” he says. in the subsea sector as it is Jake Molloy, general secretary things all these years,” he says.
meeting. “If not corrected we Technip human resources building awareness of the skills of the Offshore Industry Liaison While welcoming some of the
will end up as a net importer of director Kevin Gorman says that problem,” he says. Committee, contrasts the positive “good work” being done by the
people, pushing up prices and although the company is Subsea UK’s Pridden says the attitude taken towards recruit- Skills Group of the Industry
making the UK less competitive. competitive on pay it is still a situation “is being exacerbated ment in Norway — where Statoil Leadership Team, Tran contends
“The root cause of this is our constant battle to retain staff. by a continual reduction of the is currently looking for large that some within the industry are
education system and the lack of “If we have all got the same UK’s skills base due to an ageing numbers of new staff — with the still trying to “water down” its ini-
young people studying science problem then rather than try to workforce and a severe shortage short-term approach taken by tiatives by maintaining the coun-
and engineering. Engineering fix it separately we should all try of science and technology many oil companies in the UK, try does not have a recruitment
needs to be perceived as an to do so together,” he suggests. graduates coming in to the which seem to prefer poaching problem but instead should focus
attractive subject and the The subsea employment story industry. Encouraging signs: Michael Salter, Abbot Group chief operating officer and chair of the Industry Leadership Team steering group dealing with the skills issue
o Photos: CHRISTOPHER HOPSON staff from contractors. on the competence and skills of
“The sustained success of the “I am still not convinced there the existing workforce.
UK subsea industry as it operates is a huge skills shortage. There Tran claims the time could not
Oil plc on action stations
in the North Sea and, are plenty of people waiting to be better for oil companies, sit-
increasingly, in provinces come into this industry given the ting on massive profits, to follow
worldwide will be largely opportunity. It is the ‘contractori- the lead set by the contractors,
dependent on its ability to sation and casualisation’ that which are already paying a levy to
continue to attract and retain continues apace which is a real the Engineering Construction
young talent. They will after all turn-off,” he claims. Industry Training Board.
be the subsea decision-makers of Molloy suggests the creation of He contrasts the commitment
‘Skills sharing’ on table: Technip the future,” he says. UK industry leaders get together to tackle the challenges of attracting and training future professionals an offshore contracts pool of and proactive role on skills taken
Offshore UK managing director Subsea industry guru Ian Ball, available labour that everyone by Total UK’s managing director
Ian Stevenson recently retired from a long BRITAIN’S oil and gas operators CHRISTOPHER HOPSON that are, I think, the answers we evidence,” says Salter. He understand why this industry is could dip into when the opportu- Michel Contie with the attitude of
career with Shell, certainly feels are all too aware of a skills gap Aberdeen are going to get.” believes there is already plenty of crucial to their own lives, and also nities arise. other operators, which seem
industry needs to demonstrate is somewhat different offshore this is a sector where the skills brought about by an ageing North Salter says the study will look evidence to reflect the fact the to attract the young people at Tran believes a partnership happy to let the few do the work.
that it has an exciting future,” he with no major problems on the shortage is being felt particularly Sea workforce and are mobilising in detail at three main areas: the industry is moving in the right school into the courses that will between the UK’s Offshore Con- “Some oil companies have no
argued. radar screen apart from a acutely. to retain the country’s historic ernment of the whole British current state of the workforce in direction, and not suffering from develop our future profession- tractors Association and the Ami- shame in claiming that once
Companies in Aberdeen with a shortage of divers. The “Subsea has never actually position as a prime source of training system have prompted terms of its age profile; the cur- an image problem that he als,” he adds. cus and GMB unions has put in trained they will offer workers
heavy subsea involvement — International Marine Contractors achieved anything like the global talent for the industry. the creation of new Sector Skills rent activity plans of the industry believes is “a little bit over- Howard Kewney, Chevron’s place a proper training rate for better terms and conditions to
Technip, Subsea 7 and Stolt (now Association puts this down in the recognition it deserves in terms A series of complex factors Councils taking over from and likely human resource stated”. human resources director in apprentices working offshore, tempt them over,” he says.
Acergy) — met at the start of last main to the ageing workforce. of its importance and influence have combined to create person- national training organisations. requirements; and current capa- He points to the success of the Aberdeen, says the general skills and praises contractors for their He suggests the setting up of an
year to discuss the skills Stevenson says one subject on the business bottom line,” he nel shortages across the business. A new SSC, called Cogent, has bility ‘pinch-points’ and ways to industry’s technician training shortage is presenting a real chal- commitment to the skills agenda. offshore academy into which
problem. being discussed by the subsea says. “The shortage of key skills is joined together Opito, the alleviate them. programme, which has produced lenge to many operators who are However, he says not enough is operators would pay a levy to
“We are seeing a lot of people community is ‘skills sharing’ Now, in a time of skills one of the biggest strategic national upstream training A team gathering data on some 540 new trainees over the struggling to fill positions. “The being done in the drilling sector, improve the general standard of
move from the main contractors between companies. Another shortages in all sectors, the threats facing the long-term well- organisation; Pinto, the equiva- future activity plans and their past five years. industry needs to increase its which needs specialised electrical training in the North Sea.
to the operators who have issue being looked at is the squeeze on subsea is even more being of the industry and the only lent downstream body; and CMP- implications for people and skills “We have to win the cost chal- labour pool because otherwise all and mechanical skills, and tends “I don’t think we would be in
‘manned up’ either directly or poaching of staff, which has keenly felt. As to the geography way to address it is to invest in NTO, responsible for chemicals is now assessing the effects of lenge through an increase of pro- that happens is that you shuffle to be neglected. this mess if operators hadn’t
indirectly by taking some staff become a problem in some areas of all this, Ball reckons that people and training,” says training. Chancellor Gordon Brown’s lat- ductivity, meaning being at the the pack. “Drilling and catering contrac- started to contract out so much
and contract positions,” says Ian of the industry, although not “while the Gulf of Mexico and Andrew MacDonald, managing Offshore Contractors Associa- est oil tax hike. forefront of new technology, “At this point there is nothing tors in the UK are increasingly work a number of years ago.
Stevenson, managing director of specifically subsea. the remaining North Sea director of Aberdeen-based tion chief executive Bill Murray “Once we have got all this data bringing the best people to this critical that is going to stop our employing people out of such What we need is a long-term plan
Technip Offshore UK, “The fact that the number of operations do seem to have search and selection specialists highlights specific shortages in we will then decide how best we industry, bringing more collabo- North Sea business but there are places as Barbados, the Cayman and commitment from the oil
responsible for the North Sea and people disappearing out of the access to people who are happy Maxwell Drummond. areas such as instrumentation are going to focus the efforts of ration within the industry and areas where we are having diffi- Islands, Cyprus and Singapore. companies on exploration and
Canada. industry has grown quite rapidly to work there, it is more difficult Sobering statistics from the and electrical trades, and a par- the industry going forward. We alignment with the supply chain,” culty, such as drilling and subsea, Trying to attract people to work production so we are in a better
Stevenson points to a huge of late means we have to try to to get the right skills to other firm show that the average age in ticular problem within lifting and are trying to get away from the says Michel Contie, managing and generally in just attracting for some far-flung agency that position to sell the attractiveness
growth in subsea activity increase recruitment and reduce areas, such as Africa and the Far the UK sector is hovering handling. “There is a dramatic anecdotal stuff and get ourselves director of Total E&P UK. experienced professional people doesn’t care about their welfare is of this industry.
globally but particularly in the the numbers leaving by making East, where it is very important between 48 and 52, roughly 10 shortage of riggers at the into a position where we can “We also have to win the hearts into all areas of our operation,” very difficult,” comments Molloy. “Without it we are probably
North Sea, which has been a the office atmosphere more to kick things off right”. years older than in other engi- moment. focus resources based on fact and and minds of the public so they he adds. He highlights the value of going nowhere,” adds Tran.
neering industries. It is estimated “The education system we have
that 50% of oil workers will have in Britain, which focuses on non-
the option to retire over the next mathematical or non-science
10 years. subjects, produces a relative
Across the UK, the offshore dearth of suitably qualified and
segment is tackling an ageing interested school leavers,” he con-
workforce, successive waves of tends.
redundancies; and rapid techno- The Industry Leadership Team
logical advances that require an (ILT) — whose members include
upgrading of skills. key operators, contractors, small
A recent report by the to medium enterprises and the
Aberdeen and Grampian Cham- trades unions — has established a
ber of Commerce, produced with specialist group to look at the
Deloitte, points out that as a skills issue. A major report on
mature region the UK is at a workforce capacity and capabil-
crossroads as it reaches the end of ity is due in late March or early
self-sufficiency in oil and gas. April.
The skills of future employees “There is an ageing workforce
and managers are critical for the in the UK oil business but there
health of the sector and the wider are encouraging signs as an
economy. The report identifies industry we are bringing in new
the underlying causes of the gaps people,” says Michael Salter,
as: the cyclical nature of the oil chief operating officer of the
industry; continual pressures on Abbot Group and chair of the ILT
costs; international movement of steering group dealing with the
staff; and the sector’s new struc- issue.
ture created by the entry of “Whether we are bringing in
smaller, specialist operators. the right numbers of people and
Reforms by Tony Blair’s gov- whether we need to expand on
Old Father Time creeps up on Norway: Pages 36&37