OTC: Strategies considered for personnel shortage

May 10, 2005
Oil and gas professionals believe they need a combination of strategies to counteract their industry's personnel shortage.

Angel White
Associate Editor

HOUSTON, May 10 -- Oil and gas professionals believe they need a combination of strategies to counteract their industry's personnel shortage.

The problem, said panelists at an Offshore Technology Conference session May 4, is most critical in the US upstream sector, in which the average age is 49 years and from which a record number of retirements is expected in 5-10 years.

Greg Guidry, Shell Oil Co. Gulf of Mexico East asset manager, cited a 2004 American Petroleum Institute survey that showed that in 5 years the shortage of engineers and geoscientists relative to expected needs will be 38% and of operations, maintenance, and instrumentation-electrical workers, 28%.

Panelists agreed that solutions depend on industry and individual-company efforts and that internships will be important.

Steve Holditch, Texas A&M University Petroleum Engineering Department director and professor, suggested companies offer more scholarships and internships.

He said companies must emphasize that their industry offers fast advancement for new employees and provides many opportunities, including high standards of living globally and a commitment to protecting the environment.

International students
Petroleum engineering students from outside the US, panelists said, are an underused resource.

Holditch said recruiters often ignore international students who may not have work visas or US citizenship but who can fill positions outside the US.

Henry N. Edmundson, Schlumberger Ltd.'s technical career director, suggested oil and gas companies "look to the East" for upstream talent.

Edmundson said many students are enrolled in petroleum engineering courses in China.

In response to a comment from the audience, the panelists agreed that traditional "Eurocentric" ideas of executives hinder the advancement of young, nonwhite employees.

A panelist, Kate Baker, BP E&P distinguished senior advisor, said hiring international employees for top positions will enable international entry-level hires to realize that achieving top-level positions is possible.

A recent survey concluded that companies must start from within their own ranks to change the industry's image.

Energy research firm John S. Herold Inc. said, "Since the 1981 oil peak, the giant oil companies have shed more than 1.11 million employees."

Aliza Fan, a coauthor of the study, said, "Can you blame a petroleum engineer who graduated in the mid-1980s—bruised and battered over the years by layoffs and endless job searches—from dissuading his children from entering the oil patch now despite the current good times?"

Edmunson said internal training is necessary to retain employees. For instance, training programs should be available to enable field engineers to become petroleum technical experts.

Also, Holditch suggested, companies should take strides to make youths aware of the global, high-tech, and growing nature of the oil and gas industry.

Responding to questions, panelists agreed that oil and gas companies, especially project managers, are leery of hiring entry-level, inexperienced graduates.

Holderith said, "Students are trained to hit the ground running." He encouraged oil and gas companies to support the universities by hiring graduates.