Kiran Stacey Is the oil and gas industry heading for a staffing crisis?

Last month, I blogged on worries within the oil and gas industry that it could be running out of workers.

Executives have been worried for a while that their workforces are getting older, with a lack of new talent coming in to replace retiring staff. Instead, young engineers and other bright graduates who are looking for a career in industry are heading for the much more sexy green energy sector.

At the time, I quoted Christine Tiscareno, an S&P analyst, as saying:

The industry has a big problem with a lack of people. This could have implications for safety. There are, for example, about five people in the world who would be able to coordinate a response to a major spill.

So what to make of a report out last week from Oil & Gas UK, insisting that the average age of offshore workers was actually falling?

The report made for interesting reading, finding that:

  • The average age of offshore workers is 40.4 years old – the lowest since O&GUK began compiling this data in 2006.
  • 51,116 individuals are travelling offshore to work – a 1 per cent rise on the previous year and the highest recorded since 2006.
  • The total number of ‘core’ workers (those who spend more than 100 nights offshore) has increased by 13.4 per cent from the previous year.
  • There have been increases in the numbers of 18 to 23 year olds and 24 to 29 year olds working in areas such as deck crew, drilling, electrical, management, production, rigging and scaffolding.

The industry body commented:

With staff aged between 18 and 65, the average age of 40.4 is a healthy one and dispels any notion of an ageing offshore workforce operating in the UK Continental Shelf.

So are Tiscareno and other industry insiders wrong to warn of a possible recruitment crisis? Not at all.

This data only goes back four years, so any comparisons really only tell us about very short-term changes. In the long term, everyone admits the industry has a problem. Trisha O’Reilly from Oil & Gas UK told me this morning:

The industry has an image problem. There is a concern that we do not have enough skilled people, especially in areas that have to compete with renewables.

In the shorter term, there is a different recruitment problem: the government’s cap on migration. In September, O&GUK warned:

The interim cap is already causing delays to key projects within the sector and a permanent cap would have a significant, damaging effect on activity and consequently employment within the oil and gas industry.

But on this point, there may be some respite for the industry. One of the problems that has most worried companies is that the new rules prevented them from putting together international teams of their own staff to work on projects in the UK.

But, as the FT reported last week, it now looks like a deal will be done to exempt such workers from the migration cap after all.

So for oil and gas companies it seems that the short term staffing problem has been alleviated, but the longer-term issues are still very much alive.