Oil well pump

Perspectives

Challenges and solutions for Middle East Energy & Resources

Deployment of nationals in a post-oil economy

The challenges that we address in this whitepaper include an ageing workforce in an oil and gas industry already grappling with an underweight qualified junior talent pool, as well as nationalization pressures from governments to reduce heavy, costly reliance on expatriates.

The energy and resources industry has been the backbone of the Middle East’s economic development in recent years as a result of an increase in the global oil and gas demand and rising prices. The MENA region accounted for around 50 percent of the world’s global oil reserves and around 40 percent of the global natural gas reserves in 2013, which makes the region a key player in the oil and gas industry worldwide. The abundance of these precious commodities in the MENA region brought several advantages to the oil and gas-rich countries as oil and gas exports were a major catalyst for economic development and wealth accumulation. Oil and gas companies operating in this region also benefited from the increase in oil and gas demand over the years, a situation that has presented them with challenges as well. The challenges that we address in this whitepaper include an ageing workforce in an oil and gas industry already grappling with an underweight qualified junior talent pool, as well as nationalization pressures from governments to reduce heavy, costly reliance on expatriates. The long term sustainability of the oil and gas industry will largely depend on the ability and willingness to embrace these challenges through corporate and governmental initiatives. The oil and gas industry in the MENA region and the world is facing a shrinking talent pool as older, more experienced oil and gas employees retire or leave the industry, while a more junior workforce lacks the technical, vocational and soft skills required by the industry. The Society of Petroleum Engineers estimates that up to 50 percent of skilled engineers could retire within the next five to seven years, presenting an immense human capital and talent management challenge to the oil and gas industry. Moreover, oil rich countries in the MENA region lag behind their global counterparts in the number of engineering and science university students that graduate every year. Only 6 percent of GCC students graduating in 2012 majored in engineering and science, compared to 24 percent in Malaysia. Despite being a highly automated industry, the human capital element remains critical as oil and gas jobs require a wide array of skills ranging from highly technical to operational and commercial. Acquiring expertise in these areas requires years of training and experience in ambiguous and challenging situations, and such training and experience is lacking in the more junior workforce.

With companies in the MENA region facing nationalization challenges, oil and gas companies continue to face a dilemma of reducing their heavy dependence on expatriates in the wake of a shortage in skilled and qualified nationals. What can be done to deploy national talent in the MENA region’s oil and gas industry?

To read about the solutions, download and read the full report through the link on the left.

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