(EnergyAsia, April 21 2011, Thursday) — The upstream oil and gas industry will face a major shortage of petrotechnical professionals (PTP) with the impending global loss of 5,000 experienced workers by 2014, according to France-based Schlumberger Business Consulting (SBC).

In its 2010 Oil & Gas Human Resources Benchmark Report, the company said the “big crew change” will have a huge impact on the upstream industry which is facing rising operating costs and increased regulations.

For the first time in the annual report’s seven-year history, SBC said it is measuring the impact of human resource strategies on oil and gas production growth.

The 2010 survey’s insights are structured around PTP Intensity, a concept developed by SBC to show the correlation between the ratio of PTPs to operated production and production growth based on the last five years’ compound annual growth rate (CAGR).

The company said the study reveals that growing companies have a higher PTP Intensity than others. A high PTP Intensity means that there are more PTPs per 1,000 barrels of oil produced than for companies with a lower PTP Intensity.

Schlumberger noted that recent trends and serious accidents, most notably last year’s massive Gulf of Mexico oil leak, will lead to higher costs and a generally higher PTP Intensity industry-wide, noting that deepwater projects are being subject to stricter regulations which may spread beyond deepwater operations.

Due to the critical role of technology in deepwater drilling and to the development of unconventional oil and gas resources, companies need to adapt quickly to manage their talent pools to accommodate growth and changes to the regulatory environment or risk losing their competitive advantage, the company said.

The report noted the following challenges ahead:

•    Big crew change – The generation of geoscientists and petroleum engineers hired before the deep recruitment cuts of the mid-1980s is approaching retirement, a natural attrition that will result in the industry losing 5,000 experienced PTPs by 2014. Higher graduate recruitment targets are too late to reverse this trend in the next three years. Petrotechnical professionals refer to geoscientists (including geologists, geophysicists and petrophysicists) and petroleum engineers (including reservoir, drilling, completion and production engineers).

•    Demand for graduates – The survey shows demand for graduates is recovering and outpacing the pessimistic forecasts of a year ago. Recruitment targets for technical staff in 2011 are 15% higher than levels planned in 2009, and are stabilising at around 9,000 petrotechnical professionals (PTPs) per year. National oil companies (NOCs), independents and majors all plan to intensify recruitment efforts from 2011 onwards.

•    Supply of graduates – While universities appear on track to provide the oil and gas industry with sufficient graduates in geosciences and petroleum engineering, supply from quality institutes will remain tight.
Geographically, the 2010 survey reveals that Asia and Russia/CIS account for 72% of graduates in geosciences and 79% in petroleum engineering, with more than 30% attributable to China alone. Companies will need to adapt their recruitment to the new distribution of talent worldwide.

•    Female ratios – Universities represent an untapped reservoir of female talent for the oil and gas industry. Women comprise more than 40% of graduates in Asia, in contrast with their counterparts in North American universities hardly reaching 20% among PTP graduates. Generally, the number of female PTPs in exploration and production (E&P) companies has increased since 2006, with female ratios in NOCs rising to 27% from 19% in the geosciences and to 17% from 15% in petroleum engineering. Independent companies show the same increasing trend with female PTPs in geosciences at 22% from 18% previously and 14% from 12% in petroleum engineering. Female ratios remain unchanged at the major companies at 17% in geosciences and 10% in petroleum engineering.

•    Mid-career recruitment – Recruitment targets for PTPs in mid-career are soaring, with NOCs and majors reporting the highest rates of increase. The labor market for experienced PTPs will be tight over the next three years, resulting in the poaching of staff, salary escalation and higher attrition rates. These staffing issues will have serious consequences on projects and production capacity, with companies contributing to the 2010 survey expressing concern of related project delays that may drive decision makers to take more risk.

•    PTP Intensity – This year’s survey demonstrates through the PTP Intensity measurement the close link between people and growth. E&P companies will need to consider this link along with other possible contributing factors such as portfolio composition, recruitment of mid-career professionals rather than inexperienced graduates, competency development and time to autonomy.

The 2010 Oil & Gas HR Benchmark was compiled by the SBC Energy Institute using data from 11 national oil companies, five majors, 12 independents, one oil field services company and 77 universities. The contributing companies account for 30% of world oil production.

SBC, the global management consultancy arm of US-based oilfield services giant Schlumberger Ltd, operates from 13 offices around the world, with almost 200 professionals advising clients’ top management on a wide spectrum of issues ranging from strategy and organization to operational efficiency.

The SBC Energy Institute is SBC’s thought leadership and research vehicle. Headquartered in Paris, the institute both draws on and feeds SBC’s expertise as the pre-eminent intellectual powerhouse of the oil and gas sector. Its mission is to undertake pertinent research and develop robust points of view on issues that will define the future of the global energy sector.