Yup, including chemical plants that using naptha or polypropylene
Still, demand are not that strong currently

The Oil & Gas industry’s next crisis is not about oil price

Oct 1, Tobias Read

According to a general consensus, 200,000 professional grade jobs have been lost from the upstream industry in the last twelve months. With new capital expenditure as rare as hens’ teeth, 2016 is shaping up to be another tough year.

My expectation is that the overall number of losses will go over 250,000: Obviously, this is not an encouraging statistic. There is also a longer term impact to consider, alongside the awful cost to individuals and families whose very real struggles make up the top line statistics. The headline figure only charts job losses; it does not take into account jobs that are not being created. Budding graduate engineers who are not being hired will have a real, long-term impact on the industry’s talent pool – a point I credit to Bill Thomas of the SWCC. This deficit in new entrants to the talent pool will continue to mount until there is a clear recovery and mothballed graduate schemes are restarted. That may be two to four years out.

Those that have exited the industry in the mid to later stages of their career are good people, often some of the most qualified. Those lucky enough to be at the right age for retirement, probably have retired. Those with mortgages and car payments are the most battered and bruised by all this and many have had to find options outside the sector.

So what of the great crew change? This was the name given to the impending retirement of large numbers of oil & gas professionals. According to a recent article in the Oil & Gas Financial Journal, 71% are over the age of 50, and they will have prospered during the boom years. Their departure would create a skill shortage that would pose real problems if the recruitment and development of young engineers couldn’t keep pace. This used to preoccupy everybody in the business. Right now, you don’t hear much talk of it. Not surprising really. Who wants to talk about skill shortages when major employers are trying to decide which 20% of their businesses to lay-off? People are retiring? OK. That alleviates some pressure.

You’ll have spotted the problem here. It concerns me greatly, and frankly it should concern every CEO of every oil related business:

Losing significant numbers from the older end of the workforce, while not bringing in anyone at the younger end will have two main impacts. Firstly, you’ll see a reduction in the pressure to downsize your workforce. You don’t have to lay off people who are retiring, or who were never hired. So that’s comforting. Secondly, you’ll create a massive skill gap in the future workforce.

I know that everybody is preparing themselves for longer term low oil prices and recruitment and rebuilding the talent pool is not on anyone’s list of priorities. This is woefully shortsighted. I’m reminded of the story of the man who fell off the roof of a skyscraper. As he looked at his reflection in the glass on the way down he said to himself. ‘Well, so far so good.’ The moral of the story. It’s not how you fall, it’s how you land.

This industry will land. In the upstream sector we are in for an extended period of at least three years of under-investment following the recent six years of over-investment and, before we know it, global demand will accelerate, reserves will deplete and productive assets will atrophy.

At that point, and I’m thinking now of 2018, the market will rebound, slowly at first but then with a vengeance. At that point the industry is going to kick in again only to find that it has lost much of the talent required to deliver projects. The war for talent will return, contractor rates will rapidly increase regaining recent lost ground and achieving new highs. This may tempt retirees back from their beach retreats and a return to the oil patch for those not too battered by the experience of being forcibly removed during the current cost cutting.

While the great crew change was much talked about until last year, it never really bit. Yes wages and day-rates accelerated but never to critical levels. Next time it will bite hard. There is no magic wand and there is nothing we can do about it. This is a market of supply and demand. We can’t force oil companies to invest in graduate schemes or to retain non-critical staff when the market is down. If you are an employee there may be good news ahead; job security for another cycle beacons.

If you are an employer then your situation will be more difficult. This will be the actual ‘great crew change’. Talent will be in short supply, supply chain costs will increase, raising break-even and lowering profits. Future talent will come from wider afield.

Where once the US and the UK exported ex-pats, those destinations will now become key sources of talent, subject as always to visa restrictions. Other than that there are not many answers.

As an employer, look to your behavior now while the tide is out. People have long memories. If you have to fire people, fire people nicely and leave the door open for them to return when you need them. Maintain your contacts in staffing and work closely with key suppliers to secure access to future talent. If you don’t, then you will be forced to simply revert to fundamentals and pay more than the next company.

It may not feel like it now, but 2018 is not far away. New years bring new problems and in our industry, the pace of change is rapid. The days when we worried about $145 oil may seem a long way behind us, but I assure you they are right behind us. Just as the next burgeoning crisis is right in front of us.



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Tobias Read is the CEO of Swift Worldwide Resources, a world leader in Oil & Gas staffing with thousands of employees across the global industry.

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spot on. As a HR, I been trying to preach about succession planning as I foresee that it will be a major crisis in the aging O&G. The current economic downturn also dampen the effort to sell the initiative.

Almost a year only... and what do mechanical engineer do in ong company like helliburton, sapura and technip..
These are the big player in ong i believe?
OnG has so many sub field, i cant see it clear till now hahah

anybody knows range E2 salary for Executive/Engineer Petronas Downstream based on Kerteh for Shutdown and Turnaround

Oil n gas high pay is due to yearly high increment?
if not how to get a high pay as the starting pay are just about the same.

Hello peeps

Nice to meet you guys. I am an engineering student currently involve in a subsea project and I am completely clueless on the operations. Google and youtube arent that helpful as most of the search yield results such as advertisement of subsea products/equipment, corporate videos, and OnG company websites. I suppose the articles from these results are biased towards their company and is not accurate for learning. Thus, I would appreciate if anyone from subsea background here is willing to share some experience. I would be happy to call you/travel to meet you to gain all the valuable knowledge. Cheers!

Hello everyone.

I have just finished my petrochemical engineering degree last month and I am really interested to work in the oil and gas industry especially in the upstream sector. Thus, I would appreciate if anyone here is willing to share some information on which websites and channels that I should look into as I am a fresh graduate seeking for jobs. Besides that, I would be happy to gain valuable knowledge from you guys on which engineering fields or courses that I should be going as I would really wish to go into these field. Thank you very much for the help.

Bro, congrats on completing your degree. I suggest you start reading from V1, i believe some people already discussed about this. Good luck. Cheers

Bro, what kind of subsea project that you are working on? I think there are a few sites/forum that you can get info from like oilpro.com or linkedin,maybe.

Downstream is better for your field of studies, lowest level job are lab jobs.
Upstream no doubt are higher salary, but with recent MLNG2 case and another 1300 staffs getting slashed without compensations, do you think it is really good?

I am doing a university project, haha.

But, I dont think going to upstream is a problem. I am willing to wait until oil price gets bettter only join. I am still studying

Sure, any field going in is not a problem, but getting slashed is a problem. You may get 5 figures when joined, but only can last you for few years and no job after that, what would you think at that time

I suppose the experience you obtain can get you another similar job from other companies?

Are you trying to say that upstream is always insecure? Or this period of time only as oil industry is not doing well.

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This post has been edited by ps3roxor: Jul 25 2019, 10:24 PM

Usually it is secured, but then nothing will bloom forever, upstream are more on digging, so with current economy, upstream business are quite bad since most downstream are importing oil from cheaper sources.
It will be worst if you join Shell, look at them now, either get slashed with minimal compensation or get pay cut by 40-50%, read more news and international portals as they are more opened on telling the facts. Lowyat forum are more on cover up stories for this matter.
Now Petronas are not in the good book, but they are still letting white elephant projects to stay on due to political issues

Saw a few vacancies in the jobstreet portal;

Tendering Engineer - Cameron Solution Sdn Bhd
Planner - Mcdermott
Various openings for KNM Process Systems Sdn Bhd
Senior Cost Estimator - Aker Solutions
Cost Engineer - Technip

Lol. Slashed, yes. Minimal compensation and pay cut? Sejuk cerita, bang.

The Slashing Starts today till Next week. Appox 700++ People.......

Someone care to share the package?