Musings From The Oil Patch
Comment of the Day

October 27 2011

Commentary by Eoin Treacy

Musings From The Oil Patch

Thanks to a subscriber for this interesting report by Allen Brooks for PPHB. Here is a section on the aging profile of energy sector employees:
The bad news for the industry was summarized in a study produced by Schlumberger Business Consulting (SLB-NYSE) showing that by 2014, only 17,000 new petro-technical professionals would enter the workforce while 22,000 would be retiring, or a net shrinkage of 5,000 skilled workers. IHS projected that half the petroleum industry is likely to retire within the next 10 years placing a significant strain on the ability of the industry to continue to grow as it has in recent years. The Schlumberger study also found that due to the industry's growth - both domestically and internationally - the recruitment target for technical staff in 2011 was 15% greater than the levels anticipated in 2009, further pressuring company capabilities and escalating wages and overall compensation in response to the pressure to hire staff.

A 2007 study on industry hiring prepared by executive recruiting firm Boyden in conjunction with the University of Houston's C.T. Bauer School of Business pointed out that between 1982 when the industry's last great boom ended and 2000, according to the American Petroleum Institute, some half a million jobs were lost in the petroleum industry. At the time of the study, the authors put the average age of management and technical personnel in the petroleum industry at between 48 and 50.

Eoin Treacy's view At a market in Shanghai a few years ago I chatted with an American who was being shown around by some of his Chinese colleagues. His business was focused on repairing or recycling mobile phones. Every month his company collected approximately 250,000 damaged phones and shipped them to China for reconditioning. I asked how he got into that business and he said that he used to be an oil driller. During the early 1990s he lost his job three times in a year as the sector went through a process of rationalisation and he decided it was time for a change.

The above data suggests he is not alone. The aging profile of the energy sector remains a cause for concern. The development of unconventional energy reserves will require novel thinking and technological innovation. Oil companies have the money to throw at these conundrums but will also require plenty of talented people. Mining and energy have received a great deal of bad press some deserved some not contrived. They need to do a much better job of publicising the positives of their industries if greater numbers of young people are to aspire to participate.

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