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Oil and gas industry urged to support new skills strategy to safeguard jobs and up-skill for digital transformation

Oil and gas industry urged to support new skills strategy to safeguard jobs and up-skill for digital transformation

10 May 2018

A report into UK oil and gas workforce dynamics launched today indicates that more than 40,000 new people will need to be recruited into the industry over the next 20 years, including 10,000 in posts that don’t exist today.

The UKCS Workforce Dynamics Review, by global energy skills body OPITO in partnership with Robert Gordon University’s (RGU) Oil and Gas Institute, assesses the changing skills requirements for the industry over the next 20 years. The research will assist in providing a roadmap for a new skills strategy to ensure the sector is ready to take advantage of emerging roles and diversification opportunities.

Modelling different scenarios, the report shows that whilst total employment will fall over time, if the industry achieves its ambitions around Vision 2035 and the lower carbon transition, tens of thousands more posts can be safeguarded and around 10,000 people will need to be recruited in emerging digital roles that don’t exist today in data analytics, data science, robotics and remote operations.

John McDonald, CEO of OPITO said: "As the industry emerges from the downturn, it is crucial that we take a longer term look at the future UK oil and gas skills requirements. A new skills strategy will help us to take action now to prepare for emerging roles and ensure the existing workforce is being given opportunities to up-skill.

"Whilst total employment will fall over the next two decades, this will be a more gradual process than the sharp hit experienced over the last three years. If the industry can work together to achieve ambitions around production and energy diversification, tens of thousands more roles can be safeguarded and our industry will continue to be one of the key industrial sectors in the UK for years to come.”

Professor Paul de Leeuw, Director of the RGU Oil and Gas Institute, said: "Technology, innovation and the transition to a lower carbon future will re-shape the sector. With over 40,000 people potentially entering the industry over the next 20 years and with a substantial proportion of the workforce to be up-skilled, there is a critical role for training providers, vocational institutes and universities to help future-proof the sector and to ensure the UK retains its reputation as a leading energy basin.”

Key findings:

-    Over 40,000 people are expected to enter the industry over the next 20 years, including around 10,000 in new areas such as data science, data analytics, robotics, material science, change management and remote operations.

-    Over 80,000 workers are likely to retire or leave the sector for other reasons by 2035.

-    Following the downturn between 2014 and 2017, the industry lost over 70,000 direct and indirect jobs (a decline rate of c 10% per year). On the basis that the industry can achieve the goals around Vision 2035 and the wider energy diversification, the industry should be able to sustain over 130,000 roles in 2035, compared to around 170,000 in 2017 (a decline rate of less than 1.5% per year).

-    Closer collaboration is required between industry and training providers to up-skill and re-skill the workforce to enhance technology capabilities across the industry and ensure it is competing effectively with other sectors for the best candidates.

-    A new skills strategy is now required to ensure the industry responds effectively to securing future talent requirements and achieving the best case scenario to safeguard posts.

Representatives from operating companies and supply chain firms from across the UK took part in the data gathering exercise. The workforce data collected totalled 34,000 roles, representing 50% of the gross operated production in the UKCS. The review identifies common roles and categorises them into broad job families to study potential impacts.

The Oil and Gas Authority in collaboration with Oil and Gas UK created a new vision for the industry – Vision 2035, based on maximising economic recovery from the UKCS and a doubling of the international footprint of the UK based supply chain. Vision 2035 captures the ambition of the industry to produce an additional 3 billion barrels of oil and gas by 2035 and to double the UK’s share of the global oil and gas supply chain market from 3.7% to over 7% by 2035. The industry is currently developing a roadmap for Vision 2035.

Mr McDonald said: "The skills strategy that will emerge from the review is likely to include the development of new programmes and courses involving input from employers, trade unions, governments, agencies, educational establishments and commercial training organisations. To make the most of energy transition opportunities, common standards will be needed across the energy sectors to create a more flexible workforce for the future.”

Commenting on today’s report, Subsea UK chief executive Neil Gordon said: "It is encouraging to see that the oil and gas industry will continue to need tens of thousands of new people over the next 20 years. The future energy mix will become more diverse with other sectors such as renewables increasing their share and this is already seeing the subsea supply chain to have a much more integrated approach to working across the sectors.

"As industry introduces more technology and develops remote operations, the skill sets required will need to adapt to the needs of the numerous new job roles created. It is crucial that the subsea sector is ready to take advantage of those opportunities and help companies make the transition. At Subsea UK, we have been helping subsea companies understand and overcome the barriers of working across other sectors so they can capitalise on the energy transition so I’m pleased to see this echo our message.”

UKCS Workforce Dynamics Review, Director of the RGU Oil and Gas Institute, Professor Paul de Leeuw (left) and CEO of OPITO, John McDonald (right) with the report