The North Sea has been producing oil and gas for half century next year and the challenges the region faces are well documented.
The ‘Fuelling the Next Generation’ report released this week showed the scale of the skills shortage is much less apparent than it was 12 to 18 months ago. This means that all the work the industry has been doing from grassroots level in schools right through to engaging with potential transitioners and the wider public is working.
The study, commissioned by Oil & Gas UK, OPITO and the department for Business, Innovation and Skills, has delivered the truest reflection of how life is going to look for those of us in the sector over the next five years.
This has been what we have been missing and it provides us an accurate insight into where the industry is and what areas we need to work on going forward.
The good news is that despite the North Sea being a mature basin, there will be a need for 12,000 new entrants between now and 2019.
We must carry on the hard work already ongoing together as an industry if we are to have this steady flow of people looking for a career in the sector.
We have to keep inspiring school pupils to study Science, Technology, Engineering and Maths (STEM) subjects, as well as undergraduates to become the future lawyers, accountants and business analysts, as well as the geoscientists, metallurgists and petro-physicists. The same is true for encouraging those about to leave the Armed Forces, women and other adult returners who are already equipped with a previous career’s worth of the skills and abilities.
The report shows that the effort companies are putting in to ensure an in-house pipeline of talent for the future is working – 86% of companies have implemented training and mentoring programmes with 6,000 graduates and 13,000 apprentices currently employed in the sector.
It shows we have taken positive strides towards increasing the number of women in the industry, they now make up a quarter of a workforce. This is still below the national average of 47% so efforts in this field will continue.
There has been high profile headlines in recent days focussing on the fact the industry could lose up to 35,000 people over the next five years. While this is true, it is important to put that into context.
There will be changes in employment patterns and these will affect employment in the sector across the UK. The forecast reduction in jobs comes from the anticipated decline in capital expenditure and the fact that a percentage of people will retire between now and 2019.
While the changing workforce profile will see an overall reduction of 9%, which breaks down to a 1% drop in tier 1 roles, and an 8% decrease in supply chain workers domestically over the next five years, the number of service personnel required on the export side of businesses will actually increase by 9% over the same period.
This is an industry where the number of people working within it ebbs and flows according to factors such as trends in domestic capital expenditure, exploration activity and the heightened activity around decommissioning.
We are a country bursting with a talent pool second to none, there is record investment in new field development in the North Sea and our research and development teams continue to push the boundaries pioneering new paths in enhanced oil recovery techniques.
Our ability to ride the wave will come down to the skills we have as an industry. With the number of international projects supported by UK companies with North Sea-trained personnel expected to increase from 26% to 35% by 2019, the onus is on us as a sector to continue being the centre of excellence.
John McDonald is the managing director of Opito UK
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