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Shortage of key skills will be greatest barrier to oil and gas industry growth, new research reveals

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Challeging Climates
Amid a positive outlook for the industry in 2014, senior oil and gas professionals have predicted that a deficit of skilled professionals will be the biggest barrier to the growth of their businesses in 2014, according to a research report released today by the leading technical advisor to the sector, DNV GL.
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elisabeth torstad
Elisabeth Tørstad, CEO of DNV GL - Oil & Gas

The industry’s dwindling pool of engineering talent has topped industry leaders’ list of professional concerns for a second year running; a trend that is driving up salaries to unprecedented levels in some areas. The median daily rate that respondents to DNV GL’s research admitted they are willing to pay individual contractors in technical areas with a particular expertise shortage is USD 1,000.

Challenging Climates: The outlook for the oil and gas industry in 2014 is an annual litmus test for industry sentiment in the year ahead. It has been produced with input from a survey of more than 430 oil and gas professionals and in-depth interviews with more than 20 industry executives.

Key findings include:

  • The overall outlook for 2014 is confident among industry professionals: around nine in 10 (88%) are optimistic about the outlook for 2014
  • However, 47% of respondents consider skills shortages as the top barrier to growth. This issue also topped the list in 2013
  • Globally, the positions that will be hardest to fill within the oil and gas industry are project managers (38%), who are most in demand in Asia Pacific (42%) where many of the world’s largest projects are located. Also in demand globally are offshore-related engineers (eg, marine, technical, operational, piping) (24%) and safety and risk engineers (16%)).
  • Skills shortages are most acute in North America (59%) given the rapid growth of shale oil and gas production there and the changing nature of projects.

Elisabeth Tørstad, CEO of DNV GL – Oil & Gas, says: “The sector is increasingly moving into challenging environments which require deep technical expertise to provide solutions, yet many companies are faced with an ongoing skills shortage. This need is driving up salaries at a time when there is already pressure to reduce costs. While technology can go some way to plugging the gap, it can’t fully replace human intervention.

“The industry needs to take a longer-term view of building professional skills, rather than putting the brakes on nurturing talent when the oil price weakens. While we cannot fully duplicate and replace the experience of retiring professionals in the sector, we can work smarter through structured approaches to managing industry knowledge and ensuring that the competence built is effectively transferred to younger generations.

“A more diverse approach to recruitment would also help to address the issue. The skills it takes to manage the construction of a space shuttle or hospital are not necessarily so dissimilar to what’s needed to manage the construction of an oil platform. And while decisions for global projects are today made in a few hubs around the world, I’m confident that we will employ a more geographically diverse working model in a few years. We will have a talent squeeze if we seek to duplicate the people in the industry today, but not if we are able to utilise the wider talent pool available to us.”

Download a complimentary copy of Challenging Climates here.