Jun 2008 - OPEC

The industry’s
human
dimension
hat drives the oil industry? Some might suggest it is the
exploration, development, production and delivery of
oil in an economic and environmentally sound manner.
And there is certainly nothing wrong in this response.
However, to find a more succinct answer it is important
to dig a little deeper. What is the one thing the industry
cannot be without?
Oil for one, but we know there are sufficient resources
for the foreseeable future. So, the remaining
answer is the human resource. It is what founded the
oil business and what continues to drive it today. Where
would any company be without versatile and flexible
employees? The human dimension is the fulcrum: a
central element on which the often disparate parts of
the oil industry hang.
Yet, over the past decade, concerns have emerged over
shortages of skilled labour, particularly in construction
and operations. In turn, this has also led to an increase
in wages. The reasons for this shortage are varied.
On the demand side, the energy industry’s recent
considerable expansion has led to calls for more skilled
personnel, especially geoscientists, drillers and engineers.
Coupled with this is the increasing number of
companies searching for new talent, not only in the oil
industry, but in the expanding service and emerging
knowledge economies. And additionally, the industry’s
age profile fairly heavily leans towards the retirement
end. Over the next ten years or so, many businesses are
expected to have to replace a sizable percentage of their
workforce.
On the supply side, a shortfall in qualified talent from
educational institutions around the world is a hindrance.
In some respects, the origins of this can be found in universities
reining in the number of people they took in for
energy-related courses during the final 20 years or so
of the last century, because at the time the industry did
not need graduates in such numbers. Today, the numbers
are believed to be increasing, but their entry into
the workforce, assuming they join the industry, may not
be fully felt for some time.
The current situation is one that deserves much
thought; and following quickly on from this, significant
action. So just what can be done?
Firstly, it is important to make the industry an attractive
career choice, in areas such as employment policies,
tailored training to combat areas where there is a scarcity
of skills, remuneration packages and, overall, making
sure there are efficient processes in place to ensure
the industry fosters an environment that can find, hire,
train and keep talented people.
And secondly, there is the relationship between the
industry and universities. There needs to be strong links
between the two to develop and nurture graduates at an
early stage. For example, by making sure industry-focused
courses are attractive, by highlighting that the industry
will play a major global role for generations to come, and
by making it easier for students to enroll in universities
across national borders. Students in the classrooms today
are the key to the industry’s future.
It is clear the industry is making strides in helping
alleviate the skilled human resource shortage, but more
still needs to be done. It requires concerted efforts from
all stakeholders, such as international oil companies, national
oil companies, service companies, regulators and
academia, to restore this essential capacity. The benefits
of this are readily apparent.
(An in-depth article covering this issue can be found
on page 14).
Commentary
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