The importance of skilled new generations for the industry

OPEC Bulletin Commentary April 2011

Staying ahead of the game! Keeping pace with changing technology! Penetrating new frontiers!

However you care to put it, the challenges facing the oil industry are countless, formidable, diverse in nature, familiar to many of us, well-defined and yet prone to both sudden change and steady evolution.

In such an environment, "Always be prepared" is a key maxim for responsible stakeholders, OPEC among them.

Even facing one of the most basic challenges for any business sector - meeting future demand - is not as straightforward as it may seem at first in the oil industry.

Our present reference case scenario shows world oil demand growing by 25 per cent by 2030. But, of course, even if this demand rise ultimately turns out to be close to the actual figure, the amount of new capacity that will be added will exceed this by significant amounts, because it must also accommodate declining output or even total depletion from many existing fields. Plant and equipment may need to be replaced or updated due to obsolescence. New incremental production may come from more difficult, remote areas. New regulations may add to the complexity - and cost - of future operations. Technology will continue to surprise us. And then there is the unpredictable nature of energy policy-making in consuming countries; OPEC has been highly critical of this, with its damaging impact on security of demand.

Therefore, how can one truly predict how much OPEC crude will be required over the next two decades? Scenarios point us in the direction of future possibilities, from today's perspective. But they can only go as far as the existing analytical tools allow.

However, this commentary is not about the whys and wherefores of scenario-building, market analysis or any other such matter.

Instead, it addresses the stages that precede this - human resources and the importance of training and bringing on skilled new generations to man the industry, as today's managers, executives, field-operators and other officials retire or move on for other reasons.

The above example has been chosen to illustrate the extent of the vision, the expertise, the application and the dedication that is required to ensure the future well-being of the oil industry. It is a formidable challenge. An enduring challenge. There are no quick fixes. And yet, at the same time, no stone should be left unturned.

OPEC has long recognized this. Our latest World Oil Outlook (WOO) reminds us of the impact of the recent financial crisis and the economic downturn on jobs: "This has been particularly apparent in industries that require significant numbers of skilled personnel for long-term projects, such as the petroleum industry." It continues: "Alongside the current global economic climate, the human resource challenges include the large-scale downsizing that led to a lack of recruitment into the energy sector during the 1980s and 1990s. At this time, many universities cut back drastically on the number of people taking energy disciplines because the industry did not need graduates in such numbers. In recent years, there has also been a dramatic expansion in the service and emerging knowledge economies, which has led to fierce competition for talent."

The oil industry must see people as long-term assets. "This means making the industry more attractive to prospective graduates and employees from across the world and broadening the ways and means available to keep talented people in the industry," WOO stresses.

This month, OPEC has been holding its 11th Multi-Disciplinary Training Course (MTDC) in Vienna. This internal course is designed to provide participants from Member Countries with a broad overview of the Secretariat's activities, as well as deepen their technical understanding of the oil industry, particularly with regard to the market. As was stated in the opening address: "We hope that, after this training course, you will be better able to participate in energy discussions and in the development of national energy policies." Another expressed hope was that participants would "develop a good network" with those from other Member Countries - ie dialogue and cooperation, another hallmark of OPEC's legacy.

The activities of the MDTC constitute only a tiny fraction of the training that takes place continually within our Member Countries, and are part of broader-based efforts to attract fresh new talent to the industry and, equally importantly, keep it there.

All in all, it is the responsibility of all parties to ensure that the industry functions well in the future and can handle the many challenges facing it for decades to come, and a well-trained, committed workforce is central to this.

OPEC Bulletin April 2011

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