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Funded in part by the Government of Canada and the Canadian Association of Petroleum Producers
November 21, 2013
Genevieve Peters
The Decade Ahead:
Labour Market Outlook to 2022 for Canada’s Oil and Gas Industry
www.petrohrsc.ca
Table of Contents (Agenda)
• Introduction
– Overview of the Petroleum HR Council and its Labour Market Information (LMI) Products and Services
– Labour Market Outlooks: Scope and Methodology
• Canada’s Oil and Gas Industry Labour Market Outlook to 2022: Key Findings and Analysis
– Current Oil and Gas Workforce
– Employment and Hiring Outlook
– Projected Labour and Skill Shortages
• Value-Added Analysis
– Sector Analysis
– Provincial Analysis
• Recommended Workforce Solutions
• Resources
– Careers in Oil and Gas
– Enform
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Petroleum HR Council—Now Part of Enform Canada
Effective April 1, 2013, the Petroleum HR Council became part of Enform:
• The organizations shared core relationships with industry associations, leaders and enterprises and governments.
• Long-standing close relationship that supports and promotes the highest safety standards in Canada’s upstream oil and gas industry through innovative training, certifications, services and resources.
• Main programs and services of the Council will continue:
– Labour Market Information
– Careers in Oil and Gas
– First Nations Training & Employment in Oil and Gas
– eGSO Marketing and Dissemination
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LMI Value to Oil and Gas Stakeholders
• Timely, relevant and credible LMI provides facts and insights into current and future labour and skill shortages within Canada’s oil and gas industry.
• With petroleum LMI, stakeholders can develop and implement effective workforce strategies to build a sustainable oil and gas workforce.
• Specifically, LMI helps:
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Our LMI Expertise
Labour Market Outlooks: Generate long-term employment and hiring projections using an industry-validated modelling system for:
– Canada’s oil and gas industry as a whole
– Key operating regions: BC, AB, SK and rest of Canada
– Petroleum industry sectors: exploration and production (E&P), oil sands, oil and gas services and pipeline transmission
– Core and “other” occupations
• Customized scenario outlooks can also be developed.
• Supply projections and labour demand-supply gap analysis available for total industry and by core occupation to help understand risks and opportunities.
HR Trends and Insights: Provide intelligence on current and short-term labour market conditions and HR trends within Canada’s oil and gas industry.
To download any of these products, visit www.petrohrsc.ca.
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Labour Market Outlooks: Overview of Scope and Methodology
Labour demand projections
• Employment and hiring outlooks
– Hiring due to industry activity, age-related attrition and non-retirement turnover
• Available for total industry and by:
– Sector: oil and gas services, exploration and production (conventional E&P and oil sands) and pipelines
– Province: British Columbia, Alberta, Saskatchewan and rest of Canada
– Core and “other” occupations
• Occupational requirements are correlated to employment drivers, which vary by sector:
– Oil and gas services and conventional E&P: oil and gas capital and operating expenditures
– Oil sands operations: oil sands production
– Pipelines: oil and gas operating expenditures
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Labour Market Outlooks: Overview of Scope and Methodology (cont’d)
Labour supply projections
• Available for industry total and by core occupation
• Take into account two sources of labour supply:
– New entrants
– In-mobility labour supply
• Consider industry’s historical share of Canada’s labour supply and ability to attract workers in the future
Projected labour and skill shortages
• Available for industry total and by core occupation
• Labour shortages exist when projected unemployment rates fall below the “balanced” unemployment rate
– Balanced rate is set at 6 per cent for industry total but differs for each occupation
Labour market analysis
• Assesses business and labour market trends impacting oil and gas industry’s workforce
• Recommends strategies and solutions for stakeholder consideration7
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Core Occupations
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OIL AND GAS OCCUPATIONS DETAILED IN THIS STUDY
1 Crane and heavy equipment operators 14 Oil and gas well drilling workers and service operators
2 Drafting technologists and technicians 15 Power engineers (steam-ticketed operators)
3 Drilling coordinators/production managers 16 Production clerks
4 Engineers: chemical, civil, electrical/ instrumentation, mechanical, mining, petroleum, project 17 Petroleum, gas and chemical process operators (no steam-
ticket required)
5 Engineering technologists: chemical, civil, industrial, instrumentation, mechanical, petroleum/mining/geological 18 Public, environmental, health and safety inspectors
6 Geologists and geophysicists 19 Purchasing agents and officers
7 Heavy-duty equipment mechanics 20 Steamfitters and pipefitters
8 Industrial electricians 21 Supervisors, oil and gas drilling and service
9 Insulators 22 Supervisors, petroleum, gas and chemical processing and utilities
10 Millwrights and machinists 23 Technicians: environmental, instrumentation
11 Non-destructive testers and inspection technicians 24 Truck drivers
12 Oil and gas drilling, servicing, and related labourers 25 Welders
13 Oil and gas well drillers, servicers, testers, and related workers 26 Other occupations
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Oil and Gas Industry Activity – Two Scenarios
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The Decade Ahead analyzes the labour market outlook for two potential industry activity scenarios based on a range of oil and gas prices, capital and operating expenditure, and oil sands production forecasts.
Low Growth Scenario Expansion Scenario
Market diversification does not occur and growth is driven by North American demand.
• Moderate increases to conventional oil, oil sands and liquids-rich natural gas activity
Market diversification occurs and Canadian producers supply international markets.
• Debottleneck and expansion of oil pipelines• Development of LNG export facilities and
pipelines
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Oil and Gas Industry Employment Outlook to 2022
In the Low Growth scenario, the industry adds just under 18,300 jobs, while in the Expansion scenario, the industry adds 38,700 jobs.
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2012E 2013F 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F170,000
180,000
190,000
200,000
210,000
220,000
230,000
240,000
195,200
199,700
213,500(+9%)
233,900(+20%)
Low Growth Scenario Expansion Scenario
Nu
mb
er o
f Jo
bs
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Long-Term Hiring Outlook (2013 – 2022)Total recruitment activity over the next decade ranges between 125,000 and 150,000 to meet industry activity, age-related attrition and a 3 per cent non-retirement turnover.
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Occupations with Greatest Net Hiring Requirements to 2022
TEN OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS* TO 2022 ALL INDUSTRY SECTORS (# of job openings Low Growth – Expansion)
Industry Total (62,440 – 84,030 )
1 Power engineers (steam-ticketed operators) 2,945 – 4,105
2 Heavy equipment operators (except crane) 2,425 – 3,990
3 Oil and gas well drillers, servicers, testers, and related workers 2,945 – 3,985
4 Drilling coordinators/production managers 3,050 – 3,945
5 Supervisors, oil and gas drilling and service 2,930 – 3,640
6 Oil and gas drilling, servicing, and related labourers 2,415 – 3,480
7 Petroleum engineers 2,150 – 2,910
8 Truck drivers 2,200 – 2,825
9 Oil and gas well drilling workers and service operators 1,860 – 2,590
10 Geologists and geophysicists 1,715 – 2,305
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*Net hiring requirements = hiring due to industry activity + age-related attrition (excludes non-retirement turnover)
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2006A 2007A 2008A 2009A 2010A 2011A 2012E 2013F 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
6.0
5.4
Balanced Labour Market Low Growth Scenario Expansion Scenario
Un
em
plo
ym
en
t R
ate
(%
)
Projected Labour Shortages
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For both scenarios, there is no relief in sight as industry unemployment rates fall below a balanced labour market for the duration of the projection period.
5.15.6
4.9
Severe shortages experienced in 2007 are expected to return by 2014 when the industry unemployment rate falls to around five percent in either scenario.
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Sector Analysis
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Oil and Gas Services Exploration and
Production (E&P) Pipelines
Employment within the services sector (i.e., drilling and completions, geophysical, and petroleum services) is projected to increase in either scenario.
If market diversification occurs, employment will further increase to meet growing demands for production from oil sands, shale oil and gas and the development of the LNG export sector.
Great opportunities exist around LNG export development, oil sands developments and expanded offshore activities.
However, significant investment from the E&P sector (both conventional E&P activity and oil sands operations) is required as these developments are very expensive and require long lead times.
Several thousand kilometers of new pipelines are required to realize market diversification.
While the construction phase of the pipeline expansion and the required workforce will be significant, increases within the pipeline operations workforce will not be as intensive.
Age-related attrition will be a key concern for the sector.
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Oil and Gas Services Sector - Hiring Requirements to 2022
Over 22,000 workers will be needed to replace employees retiring between 2013 and 2022. An additional 25,900 workers will be required to accommodate industry growth in the expansion scenario.
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2013F 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Hiring Due to Industry Activity Expansion Scenario (25,900 workers)
Hiring Due to Age-Related Attrition (22,000 workers)
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TOP 20 OIL AND GAS SERVICES OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTSTO 2022
(# of job openings: Low Growth – Expansion)
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Total Oil and Gas Services (37,700 – 47,900)
1 Oil and gas well drillers, servicers, testers, and related workers
3,025 – 3,990 11 Petroleum engineers 650 – 815
2 Oil and gas drilling, servicing, and related labourers
2,630 – 3,605 12 Petroleum, gas, chemical process operators (no steam-ticket required)
635 – 800
3 Supervisors, oil and gas drilling and service
2,635 – 3,270 13 Steamfitters and pipefitters 610 – 785
4 Truck drivers 2,105 – 2,675 14 Petroleum/mining/geological engineering technologists
520 – 655
5 Oil and gas well drilling workers and service operators
1,965 – 2,630 15 Heavy-duty equipment mechanics 465 – 590
6 Drilling coordinators/production managers
1,990 – 2,435 16 Industrial electricians 335 – 420
7 Heavy equipment operators (except crane)
1,300 – 1,645 17 Inspectors in public and environmental health and safety
325 – 400
8 Millwrights and machinists 1,125 – 1,430 18 Machinists and machining and tooling inspectors
240 – 305
9 Welders 910 – 1,165 19 Purchasing agents and officers 225 – 275
10 Geologists and geophysicists 800 – 980 20 Supervisors, petroleum, gas and chemical processing and utilities
225 – 270
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Provincial Analysis
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British Columbia (BC) Alberta (AB)
Foreign investment and the province’s liquids-rich natural gas plays have kept BC’s oil and gas industry busier than expected, especially considering the lingering low natural gas price environment. However, the province is at a turning point as stakeholders wait to see if the development of an LNG export sector proceeds.
Technology has a significant impact on the province’s oil and gas production potential as it allows companies to undertake new exploration and rework old wells. Alberta’s oil sands are expected to expand at a sustainable rate although growth may be impeded by market and transportation constraints.
Saskatchewan (SK) Rest of Canada (RoC)
Growth is driven by increased activity in the prolific Bakken shale oil formation where technology is reversing the decline in light oil production. Technology is also boosting activity around Lloydminster as thermal technology is being applied to enhance heavy oil production in the area. With the increased use of rail to address pipeline capacity issues, activity is expected to increase over the next couple of years, regardless of scenario.
The majority of current industry activity is for Manitoba’s production from the Bakken shale oil formation, Nova Scotia’s offshore natural gas and Newfoundland and Labrador offshore oil. Technology has increased the potential of industry expansion across Canada, including the development of shale oil and gas deposits and the potential for LNG exports from Canada’s east coast.
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Employment Impacts of Oil and Gas Investment and Activities to 2022
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Investments and activities by the oil and gas industry benefit all Canadians.
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Best Practices in Attraction, Retention and Workforce Development
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Best Practice Recommendations
Improve retention through leadership development with managers and supervisors.
Increase worker loyalty by implementing intensive “boot camps” or other leadership training to help managers leverage mentoring and team-building skills to build stronger working relationships with employees.
Leverage defined career pathways to attract and retain workers.
Promote long-term worker retention by offering prospective workers and employees multiple career advancement pathways with varying options to progress within the company into different occupations or business divisions.
Perform regular reviews to ensure employees are compensated competitively.
Increase worker retention by reviewing and evaluating each worker’s performance to ensure that workers are compensated at an appropriate market level for their level of experience.
Shift away from contract employment.Avoid high operating costs caused by competition in a highly competitive labour market by shifting from contract workers to permanent employees.
Leverage multiple channels for recruiting.
Increase the pool of job applicants by accessing a larger number of channels for recruiting. Include strategies for employee referrals, social media, and local job boards to target workers interested in moving to the area based on family, lifestyle, or life stage reasons.
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Best Practices in Attraction, Retention and Workforce Development
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Best Practice Recommendations
Recruit from under-represented labour supply pools.Leverage diversity partnerships to access under-represented labour supply groups, including targeted recruitment within Aboriginal, youth and immigrant populations.
Leverage company branding.
Recruit using a company branding strategy that emphasizes the company culture, leadership, strategy, stability, safety record, and financial performance or other differentiating factors that are key selling points to attract top staff.
Maintain competitive benefits.
Compare benefits versus competitor’s offerings including a review of perks such as vehicle allowances for managers, housing stipends, paid flights, accommodations for fly-in/fly-out workers, pay adjustments for higher tax rates and long-term incentives.
Explore business partnerships with Aboriginal groups.Industry and Aboriginal groups may benefit from business partnership opportunities such as co-owned drilling rigs and provision of camp services.
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Demand-driven Workforce Solutions
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Given the global competitiveness for skilled workers, industry must continue working with government, education and training institutions and other labour supply stakeholders to increase the talent pool for the oil and gas industry.
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Resources: Careers in Oil & Gas – www.careersinoilandgas.com
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Resources: Choose Your Future – Career Quiz
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Resources: Day in the Life
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Resources: Occupational Information – Occupational Summaries
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Resources: Rich with Potential – Career Practitioner Guide
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Resources: Job Board
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www.petrohrsc.ca29 Funded in part by the Government of Canada and the Canadian Association of Petroleum Producers
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