Oil and gas contractor rates may increase sharply, and the pool of skilled workers available for conventional oil and gas work may reduce further. This can only be good for contractors with the right skills, but there are fears of a potential ‘boom and bust’, and also safety worries.
This is according to a survey of over 10,000 oil and gas workers by recruiter Oil and Gas People, which shows that 54% of the industry does not believe that the UK’s shale gas development plans proposed by government are sustainable.
“Shale gas represents a significant opportunity for the UK to meet its energy security targets, but the government needs to realise that the UK needs equipment, rigs and qualified staff that are in short supply,” said Kevin Forbes, CEO of Oil and Gas People.
Forbes warns that the impact of shale gas development could be broad: “There is a risk that the push for shale gas could have consequences for the oil and gas industry as a whole, with an increase in demand for staff pushing up wages and reducing the pool of skilled oil and gas contractors still further.”
The latest Hays Oil and Gas Index also warns that other countries are likely to follow the USA and UK in their drive towards shale gas development, and the index highlights that unconventional and reservoir engineering skills shortages are already acute in the USA.
ContractorCalculator CEO Dave Chaplin likens the emerging scenario to that of the IT contracting sector during the early ‘noughties’: “In the dot.com era rates more than doubled before returning to pre-boom levels when the bottom fell out of the ‘new economy’, and techies a year out of school were earning six figures.”
But rate rises is as far as the analogy will extend, believes Chaplin: “If fracking gets cancelled overnight then it would be the same as the IT crash, but this seems less likely. The dot.com era was a punt on the internet with many unknowns. Although uncertainties remain, shale gas development seems to be a safer bet with known returns.”
However, Chaplin’s greatest fear is that some operators may cut corners, threatening contractor safety: “In the Oil and Gas industry, if someone makes a mistake it can be life threatening. It takes years to train oil and gas professionals, and you can’t just hire people that haven’t had the experience, due to safety issues.”
“We still have time to start training the oil and gas recruits of the future now,” concludes Forbes. “Without the workforce, shale gas projects will not be able to go ahead and energy security will be affected.”