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Staffing Is Main Constraint to Oil Output, Schlumberger Says

By Stephen Voss

The biggest constraint to expanding global oil and gas production is a lack of trained younger and mid-career workers in the oil industry, said the head of the world's largest oil-field-services company, Schlumberger Ltd.

The U.S., Canada, Russia and the Middle East have the largest supply deficits in ``petro-technical'' staff while China, India and Indonesia have an excess, Schlumberger said. The Houston-based company based its findings on recruitment data from 115 universities and a survey of 30 oil companies.

``The only serious constraint to a smooth, steady increase in new supply is in the availability of people with proper experience and sufficient technical education,'' Schlumberger's Chief Executive Officer Andrew Gould said yesterday in London. ``A shortage exists at all levels.''

The findings support comments from executives at major oil companies, such as BP Plc Chief Executive-designate Tony Hayward, who said Feb. 8 that demand for oil services and construction crews is ``stretched to breaking point'' and partly responsible for BP's new ``conservative'' production forecasts.

A ``people gap'' is looming in the oil industry after years of not hiring younger employees, Gould said while attending the annual International Petroleum Week conference in London.

The staff demographics for a typical medium-sized oil company in 2005 shows a peak number of workers with about 20 to 25 years experience and relatively few staff at lower experience levels, Schlumberger said. In 2010, the chart will show two peaks; one where staff have about 30 years experience and are getting close to retirement, and another smaller peak of staff with about 5 years experience.

Fiscal Terms

Filling the gap between those two experience levels will require new ways of managing personnel, such as developing younger skills at a quicker pace and retaining older staff in semi-retirement jobs so that vital knowledge isn't lost, Gould said.

He was dismissive of other constraints on supply, including harsher fiscal terms for foreign oil companies in some parts of the world.

``At current prices, the industry has plenty of projects to execute and access to reserves is not having a major impact,'' he said. ``There is a lack of construction capacity for the equipment needed for new projects but this is an issue that time will solve.''

To contact the reporter on this story: Stephen Voss in London at sev@bloomberg.net  

 

 

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