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Drilling for talent: the challenges facing UK North Sea Oil and Gas

Despite the current economic downturn, there can be no doubt that the UK North Sea will remain an important energy-producing region for years to come. The region still boasts estimated oil and gas reserves of 9.4 billion boe with a 50 per cent plus chance of recoverability[1].

However, UK drilling activity is in decline, and is nowhere near the levels necessary to unlock the area’s remaining potential. This is not just a concern for the industry, but the entire country. UK offshore oil and gas continues to be the country’s largest industrial investor, paying more tax to the Exchequer than any other corporate sector. In 2014, the North Sea oil and gas industry supported around 450,000 jobs across the country, contributing around 1.5 per cent of national GDP[2]. Without domestic production, we would have had to import an extra £31 billion worth of energy in 2012[3]. But we can only produce as much as we drill – ultimately, the stakes could not be higher.

So what obstacles do drilling companies in the North Sea face? Many of the issues comes down to the sector’s inherent volatility. Drilling activity is highly sensitive to moveable factors such as the oil price, and is one of the first areas to be affected in the face of a decline. As we have seen, a dip in prices can lead to prolonged periods of reduced or low activity. When opportunities do arise they usually do so with little forward notice, leaving companies scrambling to ready themselves to take advantage.

The people problem

Seasoned industry professionals know that the boom follows bust, and when the oil price recovers (as it undoubtedly will) and drilling activity returns, one of the major manifestations of volatility will undoubtedly be the inherent difficulty in getting the right people with the right technical skills to the right place for the right duration.

There are additional issues particular to the North Sea region that exacerbate the challenge. Firstly, competition with other regions around the world – in an industry traditionally short on human capital – makes it especially difficult to retain talent.

There’s also the matter of job satisfaction and the opportunity to work with cutting-edge technology. The North Sea is, of course, a very mature, developed region, filled with aging drilling rigs. These do the job, but newer regions tend to have a higher proportion of next generation rigs, boasting better conditions for workers.

Much like the oil price, rig availability is largely a matter of supply and demand beyond the immediate control of drilling companies. Therefore there are limited options when it comes to mitigating the impact of volatility in these areas. When it comes to the impact of volatility on human capital, however, there is more that can be done.

A partner you can trust

Companies need to be flexible and use all possible resources at their disposal to retain and attract talent in this crucial area. A common factor behind successful hiring is partnering with third party workforce specialists such as recruitment agencies. When demand is high, and timing so crucial, positions can be routinely filled mere minutes after becoming available, simply by being able to tap into a global network of highly skilled workers. To have access to the full picture of just who is available, and when, can put firms at a major advantage.


[1] Page 5, Oil and Gas UK Activity Survey 2014



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