Overcoming the oil and gas workforce hurdle in Africa
Is African oil and gas production limited by a skills gap?
Africa has been a major focus for the oil and gas sector for decades, since the discovery of significant Algerian and Nigerian resources in 1956.
Below are a few key facts about the region's energy economy.
19 African countries are significant producers of oil and/or gas.
Nigeria alone produced over 2.5 million barrels of oil a day last year and has produced over USD$85 billion worth of gas in the last 15 years
Significant discoveries in Ghana, Tanzania, Mozambique and Uganda have enhanced optimism for both professionals and hiring managers.
Sourcing the required workforce numbers and skills will enable the region to make the most of its potential. This is a challenge many hiring managers and producers are grappling with.
Optimism and opportunity
The oil and gas sector has had a muted few years, but optimism is growing, especially within Africa.
Airswift’s Global Energy Talent Index (GETI), revealed that Africa’s workforce is the second most optimistic worldwide, with 47 per cent of candidates surveyed expecting the market to recover within the next 12 months to a point where stable prices and reduced costs make most projects economically viable.
This perceived market recovery is partially down to the recent reduction of production costs and de-escalation of border disputes, but primarily due to the sheer number of projects on the horizon.
Eni/ExxonMobil’s Coral Field project in Mozambique, a significant LNG development, is scheduled to start production by 2020 with an estimated investment of USD$8bn. Then there’s the 1,443-kilometre crude export pipeline project running from Hoima in Uganda and through Tanzania and totalling upwards of USD$3.5bn. However, there is a hurdle in the way. A skills shortage.
These projects will lead to a huge demand for talent in the oil and gas sector and indirectly create a need for additional and improved transport infrastructure in less developed economies such as Uganda and Mozambique.
While this will have a positive impact on economic development, it will undoubtedly increase the need for talent and widen the skills gap further.
The hurdle: a growing skills shortage and increased demand
GETI revealed that 85 per cent of professionals and hiring managers believe there is still a skills shortage within the African oil and gas sector.
Another piece of research has even named the skills shortage as a bottleneck to the industry. So how will these projects succeed?
The problem is compounded by the fact that the homegrown talent pool is limited, yet companies have to adhere to strict local content rules, which has an average requirement of 80 per cent being employed from the local workforce.
This lack of talent can be seen at all levels, from engineers and project managers to lower-level labouring jobs. It can be felt across the region, but primarily in Ghana, Mozambique, Kenya and Uganda where major projects are underway.
Then there’s the sheer scale of the issue. There is a huge variety of projects that are in the pipeline: look at the USD$16 billion Egina field development in Nigeria, or the USD$7 billion Offshore Cape Three Points project in Ghana.
Their huge manpower requirements mean it’s not a small shortfall of talent – the Egina project alone will mean Total almost doubling its workforce in Africa.
Part of the solution is to look for those with transferable skills from other related industries that include technical ability, experience of managing people and sales negotiation.
However, adaptable workers like this are in short supply, so the right training is crucial.
These same transferable skills will also play a vital role in providing a quality talent pool to the growing infrastructure and process sectors. These sectors will boom as a result of new oil and gas projects and help that workforce transition to supporting broader economic development.
It is in the capable hands of the workforce solutions provider to solve the issue of the current skill shortage within the African oil and gas industry.
Making the jump: education programmes for local talent
The workforce needs upskilling; more importantly the local workforce needs upskilling. The benefits are twofold: narrowing the skill gap as well as meeting the region's strict local content rules.
Whether it’s providing the basic knowledge for entry level jobs, upskilling the workforce for higher-level managerial or engineering jobs, or providing transferable skills, training and mentoring programs, it’s essential.
By upskilling and investing in the local workforce, the long-term benefits will be huge, saving the operators money due to lower national wages and reducing the relocation packages for expats.
This needs to start with education, with schools incorporating necessary skills into the syllabus, all the way through to university level and graduate training schemes.
Some mentoring programmes are even taking employees overseas for additional training in the industry.
This means providing the specialist, international workforce to deliver the projects, as well as the best available candidates from the local marketplace to be trained and mentored to take over the positions when ready.
It also involves drawing on our knowledge and experience of local regulations, the local and global talent pool, and multiple nationalisation strategies to help operators design and implement their local content plans.
This benefits both the operators as they have the correct talent and also the workers themselves, who gain transferable skills they can take into other upcoming sectors, improving their long-term career prospects and boosting local economies.
Ultimately, the success of these projects will come down to having the right talent in the right place at the right time – something the workforce solutions industry is uniquely suited to facilitate.
This post was written by: Richard Clay, Business Development Director for Africa at Airswift