x Abu Dhabi, UAEMonday 22 January 2018

Outside the Gulf petroleum graduate numbers increase

The US-based Society of Petroleum Engineers finds that the number of graduates entering the industry has increased in the past five years.

While recruiting technical talent is a new worry for national oil companies in the Gulf region, oil producers based in Europe and North America have been grappling with a skills shortage for years.

Universities in those regions have responded, turning out higher numbers of graduates from their petroleum engineering programmes as oil-patch employers offered tempting starting salaries.

Not every engineering student was swayed by growing public disdain for companies pumping "dirty" oil and government policies promoting renewable energy.

"Over the past five years, petroleum engineering programmes have been successful in increasing the number of graduates in response to widely discussed concerns about the ageing of the workforce and the massive retirements of experienced professionals who will need to be replaced in the next decade," wrote the US-based Society of Petroleum Engineers (SPE) in a report last January. "The shortage of human assets has been listed among the top priorities for the industry for several years."

The number of freshly graduated petroleum engineers seeking entry to the oil and gas industry hit a 20-year high this year, just as many experienced professionals had postponed retirement plans because of the global economic downturn. As a result, the SPE expected only 70 per cent of the available petroleum engineering graduates this year to find jobs in the oil and gas industry, down from 90 per cent last year.

It urged oil companies not to scale back recruitment this year, warning that such a move could lead to "a permanent loss of this talent from the industry, and chill the interest of future engineering students in pursuing careers in the oil and gas industry".

Oil companies should treat the recession-driven delay in the expected "big crew change" as a "window of opportunity" for seasoned professionals to transfer knowledge to new entrants, the SPE said.

A 2008 study by the consulting arm of the international oil services company Schlumberger showed that even the fastest-moving companies took six to seven years to train newly hired petroleum engineers to perform without supervision, because of the complexity of decisions and the level of mastery of advanced technology their jobs required. The long lead time to develop human capital could leave many oil and gas producers high and dry when global energy consumption inevitably picks up.

"The recession will end, and energy demand will rebound. The 'baby boomers' in the industry will retire, and the forecast 'big crew change' will occur," the SPE said.

"There is a significant downside to not taking advantage of this opportunity to recruit the expanded class of new graduates in 2010 and over the next several years - the potential loss of these engineering graduates to other industries," it said.

The organisation also noted that emerging oil and gas areas had significant needs for engineering staff. So, it appears, does the Gulf region.

The sudden and unexpected surplus of western petroleum engineering graduates combined with insufficient home-grown talent could, from necessity, lead some GCC national oil companies to extend their targets for workforce nationalisation.