OGV Energy predicts a bright future ahead

The oil and gas industry, which provides a large percentage of the UK’s energy needs, currently supports around 300,000 jobs across the UK, 45 percent of which are based in Scotland.

Although employment in the sector has reduced from its 2014 peak, the recent uptick in activity on the UK Continental Shelf (UKCS) and the increased production and investment in recent months have made industry associations and businesses more optimistic about the employment situation in the oil and gas industry.

According to Oil & Gas UK’s Workforce Report 2018, even though some organisations continued to make workforce reductions last year, many other firms were adding employees as activity started to increase in 2018. The industry downturn, which heralded the biggest cost reductions and workforce rationalisation in the industry’s recent history, now appears to be behind us and Energy companies are increasingly focused on making their improvements sustainable and adding new products and services to their market value proposition.

Oil & Gas UK’s Business Outlook Report 2018 showed that 56 percent of surveyed companies expected their employee numbers to increase throughout last year, while just six percent expected further job reductions. Due to the uptick in operating expenditure and the capital allocated to new development projects being at its highest in five years, Oil & Gas UK expected more activity to filter through to the services sector.

In May 2018, a report by the Oil and Gas Institute at Robert Gordon University (RGU) and OPITO, a not-for-profit skills body for the energy industry, found that the UKCS sector will likely need to recruit over 40,000 people between 2018 and 2035 to offset natural attrition and to ensure it can support Vision 2035—the UK’s plan to maximise economic recovery from the UKCS and double the international footprint of the UK-based supply chain by 2035.

Those 40,000 recruits would include around 10,000 new positions with skills in areas which the oil and gas industry is betting on to help shape the future—data science and data analytics, robotics, material science, change management, and remote operations.

Currently, the petroleum licence holders on the UKCS employ around 11 percent of the workforce, while the supply chain community accounts for the remaining 89 percent, according to the ‘UKCS Workforce Dynamics report 2018–2035’. Technical roles related to drilling & wells, operations and engineering, represent some 73 percent of the positions in the UKCS, while the other 27 percent are made up of business support roles, such as procurement & supply chain management, Business Development & Sales, HSE, HR, Finance, and IT roles.

Looking forward to 2035, “Closer collaboration is required between industry and training providers to up-skill and re-skill the workforce to enhance technology skills and capabilities across the industry, with a key focus on the skills required to deliver Vision 2035 and the broader energy diversification,” the report stated.

The 29th Oil and Gas Survey, conducted by Aberdeen & Grampian Chamber of Commerce in partnership with the Fraser of Allander Institute and KPMG in the autumn of 2018, showed that workforce recruitment is on the rise among oil and gas contractors in the UKCS as business confidence reached its highest level since 2013.

Contractors are also optimistic that the upward trend in business confidence will continue into the year ahead, with 64 percent of firms expecting a further increase in business optimism and fewer than 5 percent forecasting the outlook would worsen, the survey found.

Other key findings from the survey showed that 33 percent of companies are looking to increase their UK workforce by 10 percent or more in 2019; a total of 44 percent of contractors are working at or above optimum levels—the highest share since 2014; and that engineers and technical staff are already identified as being in short supply.

Commenting on the report, Deirdre Michie, Chief Executive of Oil & Gas UK, said:

“We do now see a more positive mood in the sector, with more projects approved this year than in the last three years combined.”

“Our strategy under Vision 2035 aims to add a generation of productive life to the basin, whilst doubling the supply chain’s global footprint. To achieve this, we need to continue to attract investment by ensuring strong competitive conditions for the basin, whilst expanding our reach through transporting the industry’s vast range of skills and talent across the globe,” Michie noted.

Kenny Dooley – Managing Director of OGV Energy, industry jobs board, echoed these sentiments: “The recent industry reports all combine to provide strong evidence that the Oil and Gas industry is moving the right direction once again after 4 difficult years. It is imperative that the lessons learned over this period are remembered and the improvements in processes and behaviours are sustained as the industry re-adjusts and moves forward into a new digital era that will see less “Grunt” and more “Grey matter” as automation and artificial intelligence starts to take effect.