The downstream oil and gas sector is often seen as benefiting from the downturn in the oil price, thanks to the fall in the cost of feedstock. As Petroplan’s Huw Rothwell, Regional Director and Andrew Duffy Senior Consultant, LNG and Downstream explain, however, when seen from a recruitment perspective the situation is more nuanced than it seems.
With the U.S. refining industry operating at around 85% capacity, the outlook for recruiters appears very positive. Planned maintenance is increasing, plant turnarounds are increasing – and both require skilled personnel. The situation appears even rosier for petrochemicals companies, where more in-demand speciality products continue to get high margins – and there is a need for a lot of new construction work.
For the LNG industry the current need is for engineering hires to get new projects off the ground. This is likely to shift in three to four years when these projects move into the operational phase – the average LNG project in the US requires 2– 6,000 personnel during the construction phase. Looking further into the future, the recruitment situation in LNG will depend on the scale of take up of LNG as a fuel – particularly for transport .
So, demand for people is strong in the downstream recruitment market – the challenge is that supply does not match this demand. Downstream companies don’t just want an engineer with general experience, they want an engineer with specific project experience, or specific technology experience. This is the barrier that those trying to re-skill and make the jump from the upstream sector are coming up against – general experience in the oil and gas industry is not enough.
The demographic issue facing the industry is well-documented – a lack of graduates in relevant disciplines coming in, combined with a generation of experienced workers due to retire. Where we are seeing scarcity in the downstream sector at present, however, it is in mid-career candidates – those with between 10 and 20 years’ experience in the industry. These candidates have been in the industry long enough to build up experience, but are still young enough in their careers to be open to a move.
In spite of the buoyancy of the downstream sector, salaries and day rates have been impacted by the oil price context. For integrated companies, remuneration for those on the downstream side has been hit by what is happening in the upstream part of the business.
Petroplan is best known in the upstream sector, but has always supported projects across the entire supply chain of oil and gas. We are currently increasing our downstream capabilities to reflect the needs of our clients – in fact, we ourselves are hiring in order to meet demand.
With the uncertain geopolitical climate and supply risks around the word, the oil price will inevitably rebound – and we must plan for that. So, while we are investing in downstream as a growth area, we are maintaining our long-standing relationships and client base in upstream and mid-stream too.
 Source: U.S. Energy Information Administration