Skills shortage may slow Africa oil growth
Fri Jun 30, 2006 10:57 AM GMT
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By William Maclean
ALGIERS (Reuters) - Africa, an increasing supplier of global energy, may be unable to expand its output as fast as expected in coming years due to a shortage of industry skills.
Inadequate schools and relative poverty mean Africa is badly placed to compete for the expertise it will need to develop new fields, a situation only made worse by a wider international shortage of oil and gas engineers and geologists, analysts say.
Will that affect the pace of new oil coming onstream?
"Absolutely. That's going to be the issue. That's one of the main depressive themes for (Africa's oil) development," said Robert Taylor, business development manager for IHRDC, an energy industry training and consulting company.
"Nobody's talking about it in Africa. What they're talking about is creating jobs generally. But creating something like a petroleum engineer takes 10 years. As they start developing the big fields, you don't just go create a petroleum engineer job."
The United States already receives about 15 percent of its oil imports from Africa's Gulf of Guinea region. Analysts predict this may rise to 25 percent by 2015. Additional amounts come from Algeria and Libya.
But experts at an industry conference in Algeria on African energy said a shortage of exploration and development skills was looming from two sources: a global shortage of expatriate experts and a lack of homegrown talent in Africa itself.
"Oil companies, contractors and other enterprises are locked in a fierce competition for a skilled labour pool which is too small for the available work," said a briefing paper by AMEC, an energy services firm, cited by conference participants.
"Skill shortages are worst in Africa, the Middle East and parts of the former Soviet Union."
Experts said it was no longer possible to use expatriates on the scale of 20 years ago because there were simply too few of them, so training Africans was increasingly important.
"However, developing local capacity of this kind can take a decade and managers are particularly hard to find," said AMEC.
Ahmed El-Ghaber, technical adviser to the National Oil Corporation of Libya, told Reuters: "We need to get the technical gap (with the West) closed as much as possible."
"It's not an easy task. To make an expert will take you years and you need patience and care."
POACHING OF STAFF
Alexandre Bayonne, an energy consultant from Congo Republic, said the country needs to do more to train nationals to take over the complex, senior roles long dominated by expatriates.
"Accords with foreign operators on skills transfer are not enough. We want more investment in training per se," he said.
Dave Lafiaji, executive secretary of the African Petroleum Producers Association, said African governments had to realise that local mastery of skills attracted international investment.
Africa's race for oil talent is replicated in other regions of the energy sector, an industry with an ageing workforce suffering a lack of skills after years of cuts and layoffs with consolidations and mergers. The workforce's average age is 48.
But Africa's relative poverty means it is less able to keep talented people. Poaching of staff is a constant problem.
Ghaber was one of several executives at the meeting, who said north African state firms regularly lost talented nationals to energy companies in the Gulf who paid higher salaries.
"We make all efforts to keep our people but if he wants to go you cannot keep someone by force, you have to go back to your pool and train more young guys," said Ghaber. "The point is to see whether the company can handle such a drain over time."
In the West, Big Oil's image as a dirty industry with an uncertain, boom and bust record of layoffs deters young people. In Africa, the problem is that schools are hard put to educate young people adequately to embark on the engineering training.
China is pumping out engineering contractors, but experts at the conference said their expertise tended to be in downstream services. Upstream, western oil majors were at the cutting edge.
Taylor said it was a mistake to think the agreements with foreign operators on training were a sustainable solution.
"They (Africans) think it's going to be like a gift from foreign operators who will transfer technology -- but that's all on paper. How's it actually going to transform into finding young people who are going to be educated to take these skills?"
"Also, it's not easy to tell an expert 'go work 60 hours a week and then at the same teach and transfer your knowledge' and typically for no extra reimbursement."
"Transferring skills is a job in itself and oil companies will be pressed simply to have the expertise to extract the oil and gas."
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