South Africa has a long history of drilling and exploration dating as far back as 1965, yet the oil and gas industry within the country still remains relatively unexplored. South Africa holds 95% of Africa’s total coal reserves and has the world’s ninth-largest amount of recoverable coal. The potential in the oil, gas and energy industry now however lies within deepwater drilling sites.
The biggest challenge faced in the oil and gas industry within South Africa is similar to that faced by the rest of the world; the shortage of skilled workers. Much of the skills shortage in South Africa relates to the areas of high expertise, such as engineers, but also stretches to the blue collar areas, such as welders and pipe-fitters.
The skilled workers in highest demand are the mid-tier level workers, those with around 10 to 15 years experience. In conjunction with this, the neglecting of trade skills training in favour of more academic routes, and the lack of training programmes at a university level in South Africa, has commensurately resulted in the greater demand for lower level skilled workers.
Challenges facing the shortage of skilled workers are met with strict quotas set by the Black Economic Empowerment Act in South Africa. The Back Economic Empowerment Act requires companies in South Africa to hire from the domestic talent pool, specifically from groups considered to be disadvantaged along the lines of ethnicity or gender. This act could exacerbate the skills shortage further, as South Africa does not presently have the volume of skilled workers they need for these roles within the their own pool of talent.
The industry within South Africa relies heavily on expatriates from Western nations to fill these skilled positions. Deepwater drilling conditions are similar to those found in offshore fields in the North Sea and Canada, therefore much of the expertise and technical skills have to be imported from such as these regions in to South Africa.
Efforts have now been made to combat the skills shortage in South Africa. A new scholarship has been offered to African nationals by the prestigious Robert Gordon University in Aberdeen, Scotland. The university is offering a ‘training of trainers’ programme to boost local expert capacity in the lucrative South African oil and gas industry that has a limited number of experts.
The oil and gas industry is also embarking on significant training initiatives now that the South African Government has made it a tax deductible expense, with major companies recruiting 100-200 graduates a year. This will further help to increase skills availability, as workers at university level will have an opportunity to learn the desirable skills needed from major companies within the industry.
Petroplan feel that the exploration and refining capacity in South Africa will continue to increase in the future as new areas are discovered; although profit margins will, for the moment, be impacted as the local talent pool is limited. The skilled expatriates imported to work in South Africa will continue to be the key players in the industry until such time skills development in the region can provide entry level engineers in the various disciplines required.
For any more information on the oil and gas industry in South Africa, please feel free to contact our office in Cape Town on +27 21 250 0030 or email them on [email protected]