Skills: Oil & gas sector over a barrel

London - A study by management consultancy Arthur D Little commissioned by industry body Subsea UK has revealed that in the subsea oil and gas sector alone, which accounts for about 29 per cent of UK production, revenues grew from £3.35bn in 2006 to £4.3bn in 2007.

'The consistently high oil price over the last four to five years means companies are now looking at projects that were not viable before,' said Joe Rothwell, operations manager at engineering staffing specialist EPCglobal.

The company is looking for petroleum and reservoir and downstream feed engineers for its busy subsea operation, and construction and project management engineers for international roles. 'As smaller companies are considering the more marginal fields, the exploration and production industry is also booming. In the downstream industry a lot of design work for overseas installations is happening in the UK,' said Rothwell.

Munro Consulting, a retained executive search business with a strong engineering recruitment division, needs engineers across the board. It wants professional engineers who have or working towards chartered status. 'Our engineering recruitment division is hiring across most disciplines within oil and gas,' said David Allan, business manager for the energy sector. 'There seems to be a particularly high demand for process design and process control engineers.'

The high oil price is helping prolong the future of North Sea operations. 'In the North Sea there is a big push to get more out of existing fields and people are looking for new and innovative ways to do this,' said Lesley de Jager, senior recruitment adviser for Poyry Energy (Aberdeen).

Poyry is looking for process engineers, particularly at senior level. 'We have ambitious expansion plans and are looking for 50 people over the next 18 months, 15 of which will be recruited this year,' said de Jager. 'This is based on demand and growth on our books. There is no one large project, just demand for operations support and offshore design projects, for instance.'

The downstream industry is also recruiting staff strongly. Petroplus Refining and Marketing is seeking engineers with specific refinery experience, including inspection, instrument reliability and project engineers, material and corrosions specialists and senior process engineers. 'Growth is being generated by high demand throughout the industry and our continued investment into new site infrastructure is also driving this forward,' said Tracey Hill, resourcing and capability specialist.

'In addition to this is the requirement to meet changes in legislation and compliance with environmental, safety and product specification, along with the organic growth of our business. As it continues to be a candidate-driven market, finding high-quality engineers is becoming even more of a challenge across our industry.

'This, as expected, continues to drive salaries up and opens more opportunities within the contractor marketplace, with these salaries seeing a continuation of the trend of significant increases.'

However, finding people to fill available roles can be a problem. Saipem UK is seeking engineers with competence in structural engineering, foundations/ offshore geotechnical engineering, naval architecture, welding engineering, pipelay project engineering, subsea/ pipeline design engineering, site/ methods and offshore field engineering. This includes senior staff for succession planning, junior staff for training and development and some contract roles to cover short-term needs.

'New contract awards are fuelling a buoyant market due to high oil and gas prices. The contract market is becoming very expensive to retain and attract contract staff, so more effort is being placed on permanent staff,' said Richard Harrison, Saipem engineering manager.

'However, it is increasingly difficult to attract competent persons under these market conditions, partly due to shortage of personnel in industry and partly due to contract rates.'

Munro's Allan said: "A lack of engineers is not down to them being recruited by other sectors as the oil and gas industry tends to pay more than elsewhere. The average starting salary for graduates in the UK is around £20,000, whereas the average starting salary for an engineering graduate in the oil and gas sector is around £26,000.

'It is simply down to the fact that demand exceeds supply. The UK engineering skills crisis is not a sector-specific problem, it affects companies right across industry.'

The UK has just been ranked near the bottom of an international league of the most attractive places to work. In a recent survey, EPCglobal questioned 1,700 engineers worldwide to help employers understand the challenge of recruiting overseas talent. One dissatisfaction of those who had worked in the UK was work benefits and hours. Companies are now working hard to respond to employees' needs in this area.

'Increasing rates and salaries to get candidates "through the door" is the easy option,' said Saipem's Harrison. 'Retaining good staff is much harder. Simply increasing salaries will not retain good staff. We have a good working environment, and focus on developing and coaching staff to enhance their career prospects and expectations.'

According to the Munro business manager: "Oil and gas sector companies are putting together the best packages and incentives to attract the right people and increasingly we see evidence of companies creating "conversion" programmes — intensive retraining programmes aimed at attracting experienced engineers from other sectors."

In Allan's view, although peak oil production may be near, or may even have been passed, engineers within the industry need not fear for their long-term careers because of diversification among producers. 'Despite the forecast that global oil production may have already peaked, the career prospects for engineers joining the oil and gas sector are as strong as they have ever been. The world's energy needs continue to rise at an alarming rate and it is recognised that fossil fuels will play a decreasing part within the energy mix over the next several decades,' he said.

Allan said many dominant sector players had already started to diversify their energy portfolios beyond oil and gas into, for example, wind, solar and ocean energy. 'That's good for people's long-term career prospects. Much public and private money is being poured into the quest to harness alternative energies and convert them into useable forms — there is a lot of innovation taking place.

'Our oil and gas engineers and technologies have led the world in delivering many ground-breaking solutions. Our current and future oil and gas engineers are therefore best placed to lead the eventual, inevitable conversion to alternative energy.'

"Even if we have reached peak oil, oil and gas production will continue for many decades yet," he added. "If the theory that most of the world's "easy oil" has been produced holds true, even more technological innovation will be required to get the last of the resource out of the ground. So whichever way you consider it, the outlook is good for energy engineers in the UK."

Article from the latest issue of The Engineer, a sister publication of Process Engineering