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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Oil Industry Faces Unexpected Skill Shortage

Automation, data analytics, the Internet of Things—you name it, the oil industry wants it. In the new post-crisis, efficiency-driven industry the adoption of digital technology has really flourished, and, as so often happens, now this fast-growing adoption is creating a shortage; a talent shortage, for a change.

Oil companies are increasingly relying on things like cloud computing and Internet of Things to stay ahead of the competition. This means they need more and more software engineers to keep the whole thing going, writes energy industry analyst Mark Venables in a story for Forbes.

Because of the nature of the oil and gas business, the rush to adopt cloud solutions, IoT connectedness, and machine learning is understandable. Managing hundreds of wells across hundreds of acres, monitoring well flows and predicting well performance are just a few examples of how instrumental digital technology has become for the fossil fuels industry. It saves money, it boosts efficiency, and it makes work in the field and on the platforms safer.

Yet all this monitoring, managing, and predicting require human talent. Software engineering talent, to be precise. The more sensors you have, the more devices you connect to an IoT network, the more data you generate. This data then needs to be analyzed to be of any use. Since artificial intelligence capable of doing this is yet to come, human talent is essential.

Venables quotes Huw Rothwell from oil and gas recruitment firm Petroplan as saying there is growing demand for people with the knowledge and expertise in software engineering for the energy industry. Satisfying this demand will likely become a challenge as the talent shortage in energy is only part of a wider talent shortage in a world bent on becoming as connected as possible. Related: This Is How Much U.S. Households Lose As Gas Prices Rise

The engineering shortage is not new: a 2017 white paper from Experis Engineering noted engineering positions have been among the hardest to fill in the United States for nine years in a row. Globally, engineering positions are the fourth-hardest to fill. Now zoom in on software engineers, who are bound to be at the top of list of engineers most in demand.

What makes the shortage problem worse is that, as is the case with pretty much any other talent, it’s not so much about quantity as it is about quality. The oil and gas industry needs quality software engineering talent and it needs it fast. Recent Forrester research suggests that companies that have been slow in attracting the right engineering talent risk having to pay up to 20 percent above-market salaries. This would only add to a swelling bill for E&Ps as oilfield service providers are also raising their rates amid improving market conditions.

The Experis report identified five key challenges companies needing to hire engineers encounter. These include lack of experience as number one, lack of hard job and technical skills, too-high salary demands, lack of soft skills, and lack of formal engineering educations. Each of these is tough enough on its own. Taken together, they suggest the talent shortage problem will only become worse in the future.

By Irina Slav for Oilprice.com

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  • Manoj Kumar on July 03 2018 said:
    This is the industry which was cutting jobs like never seen before. In this process, many lives were destroyed and career took a hit. When engineers are asking more then why they should be complaining. They will want Software engineer with O&G experience. People with this skill already get a good salary then why they will move to unstable industry like this.
  • david on July 03 2018 said:
    With the deep slash of jobs in 2014 through the industry, I don't think any of this is unexpected. The longer the drought the longer it takes to restore jobs with increase demand.
  • jpm on July 04 2018 said:
    Strange there is a shortage in IT skills especially when the major oil companies are getting rid of their local IT staff and outsourcing their IT to places like India and Thailand.
  • Al on July 07 2018 said:
    Plenty of skilled O&G ppl available, but our memories are long. We were discarded at the first sign of trouble in lue of cheap under skilled workers... and now you complain?!?We remember your lack of loyalty to us. It will cost you big $$$'s when and if we return... and there will be no loyal to anyone but ourselves. Let the bidding begin!!! We've have years of missed salaries to recover.
  • Rick on October 13 2018 said:
    lol, unexpected they say...

    Let's see how unexpected this really was:

    * Before the current downturn the oil and gas industry was battling a huge talent skill/shortage due to the same sort of fire all/hire none policies in the 80’s/90’s.

    * According to Halliburton around 20-30% of former employees do not return after losing their jobs, so we can kiss those workers goodbye.

    * Now we also have baby boomers retiring. Even if some return due to good salaries in the future there’s a limit to how long they can stick around.

    * Younger generations tend to not come anywhere close to this ill reputed industry due to the environment, shady practices, etc., especially now that everyone has seen (due to the internet) what it does to its workers when a downturn hits.

    * Many workers who weren’t even unemployed during this downturn say they want to leave the industry ASAP so they won’t get stuck out of a job in their 50’s when another downturn hits.

    * Wages are lower now. Apparently people think O&G workers have lots of fun staying away from families and friends, missing events, risking their lives, etc., and really want to stick around when you pay them significantly less than before. If the industry salaries aren’t competitive, some other industry will have them.

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