This past year the UAE hosted an unprecedented recruitment event for industry operators. The Energy Recruitment Live Event brought 1,000 industry jobseekers to Dubai. In a region known since the 1960’s as one of the world’s premier oil and gas producers, and a source of equally unprecedented oil and gas engineering talent, holding an event such as this is a sign. It’s a sign that the global recruitment race has stepped up once again.
Around the same time of the recruitment event, OilCareers.com, an industry job board and a benchmark of the industry’s employment climate, reported that 12,500 new jobs were posted to its website, a 60% percent increase year over year, with a only a 22% rise in overall applications for those positions.
Fluctuations and volatility in the price of crude are often a signal to young engineering candidates that a career in the oil and gas market is just as volatile. As the price rises, so does the demand for top engineering talent. As the price moves downward, so does production and employment in the industry.
The real problem stems from the fact that relatively flat oil prices from the 1980’s to early 2000’s made technical oil and gas careers much less attractive to engineering students. Domestic and expatriate engineering talent is aging and production methods are changing, even in large upstream markets like those here in the UAE. In fact, several mining and production programs were disbanded at Universities and Colleges around the world during that period. The results of the 20 year lull are being seen today. There are not enough engineers to readily address the issue of attrition in the technical sector of the industry.
Add to that the fact, that with rising oil prices, the conversion of shale and tar sands in North America becomes more feasible. The price on land leases in certain cases have increased “10-fold in the past five weeks” as reported by Bloomberg only a month ago. New technologies related to shale conversion activity involving geosciences, IT and undersea technologies are making careers in those regions more attractive to young engineers. This is largely because, should the speculative shale bubble burst, they have skills applicable to other industries as opposed to the rig engineers of yesterday.
Of course the industry still needs rig engineers badly in the short term; however, recent industry white paper suggests the need will decrease by about 14% by 2018. This hardly instills confidence in prospective students to the trade.
An industry educator recently spoke with one of my colleagues and his comments sum up the problem:
“What was taught in schools 20 years ago is not very applicable in today’s hi-tech industry. In countries where new discoveries are being made like Ghana, Angola and Kazakhstan, while the desire is there to enter the industry, the educational resources are not. We’re helping develop educational programs in these areas and connecting developing markets with experts in the industry to improve the quality and quantity of their engineering talent to help balance supply and demand,” states the Chairman of the Society of Petroleum Engineers (SPE) Talent Council and Professor at London’s Imperial College, Dr. Alain Gringarten.
“In countries where oil is the main industry, everyone wants ‘in’ so finding a number of interested candidates is not a problem. In the Western world, we are competing with lucrative IT careers for young talent. In the UK, it’s the financial sector. When the price per barrel rises, our number of applications for enrollment goes up, when the price goes down, enrollment drops off on a proportionately measurable level. There is a lag in supply and demand of engineering candidates We’ve mapped the data and the correlation is very strong.”
It’s reasonable to suggest that we are in full “demand mode” for experienced and new petrol industry engineering talent given that we are seeing engineering recruitment events taking place in an area holding about 20% of the world’s reserves.
Recent events spotlighted in the media such as the Iranian embargo and reaction, oil hoarding in Europe and Asia, and the possibility of $5 USD per gallon petrol in the USA also suggest that the race for technical candidates, both new and experienced in the sector, will only get more heated in the future.