western oil & gas transportation summit presentation

Funded in part by the Government of Canada and the Canadian Association of Petroleum Producers

May 15, 2014Carla Campbell-Ott, Executive Director, Petroleum HR Council (a division of Enform)

Overcoming the Challenges of Labour Shortages Arising from the Rise in Oil and Gas Development

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Table of Contents (Agenda)

• Introduction

– Overview of the Petroleum HR Council and its Labour Market Information (LMI) Products and Services

• Canada’s Oil and Gas Industry Labour Market Outlook to 2022: Key Findings and Analysis

– Current Oil and Gas Workforce

– Employment Outlook

– Hiring Outlook

– Projected Labour and Skill Shortages

• Value-Added Analysis

– Provincial Analysis

– Full Employment Impacts of Industry Investments and Activities Over the Next Decade

• Recommended Workforce Solutions

2 www.careersinoilandgas.com

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Petroleum HR Council — a division of Enform Canada

Effective April 1, 2013, the Petroleum HR Council became part of Enform:

• Shared core relationships with industry associations, leaders and enterprises, as well as with government organizations.

• Long-standing close relationship with Enform that supports and promotes the highest safety standards in Canada’s upstream oil and gas industry through innovative training, certifications, services and resources.

• The main programs and services of the Council will continue, primarily focusing on two key areas of priority: Labour Market Information and Careers in Oil and Gas.


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LMI Value to Oil and Gas Stakeholders• Timely, relevant and credible LMI provides facts and insights into current and future labour and skill

shortages within Canada’s oil and gas industry.

• With petroleum LMI, stakeholders can develop and implement effective workforce strategies to build a sustainable oil and gas workforce.

• Specifically, LMI helps:


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Our LMI Expertise

Labour Market Outlooks: Generate long-term employment and hiring projections using an industry-validated modelling system for:

– Canada’s oil and gas industry as a whole

– Key operating regions: BC, AB, SK and rest of Canada

– Petroleum industry sectors: exploration and production (E&P), oil sands, oil and gas services and pipeline transmission

– Core and “other” occupations

• Customized scenario outlooks can also be developed.

• Supply projections and labour demand-supply gap analysis available for total industry and by core occupation to help understand risks and opportunities.

HR Trends and Insights: Provide intelligence on current and short-term labour market conditions and HR trends within Canada’s oil and gas industry.

We produce the following LMI products.


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Canada’s Oil and Gas Labour Market Outlook to 2022: Key Findings and Analysis


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Business Trends Impacting Canada’s Oil and Gas Industry• Attraction of investment

– Oil sands, especially in situ

– Liquefied natural gas (LNG)

– Shale/conventional oil

– Hebron offshore project

• Joint ventures with Asian companies

– Longer-term view of development and learning opportunity

• Downside risks

– Single customer market (US)

– Lack of infrastructure to support market diversification

– Skill shortages


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Oil and Gas Industry Activity – Two Scenarios

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The Decade Ahead analyzes the labour market outlook for two potential industry activity scenarios based on a range of oil and gas prices, capital and operating expenditure, and oil sands production forecasts.

Low Growth Scenario Expansion Scenario

Market diversification does not occur and growth is driven by North American demand. • Moderate increases to conventional oil, oil

sands and liquids-rich natural gas activity

Market diversification occurs and Canadian producers supply international markets.• Debottleneck and expansion of oil pipelines• Development of LNG export facilities and

pipelines

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Current Oil and Gas Industry Workforce TOP TEN OIL AND GAS OCCUPATIONS

BASED ON 2012 EMPLOYMENT (# of jobs)

Industry Total (195,200)

1 Oil and gas drilling, servicing, and related labourers 12,940

2 Oil and gas well drillers, servicers, testers, and related workers 12,305

3 Supervisors, oil and gas drilling and service 9,570

4 Oil and gas well drilling workers and service operators 9,030

5 Petroleum, gas, chemical process operators (no steam-ticket required) 7,140

6 Heavy equipment operators (except crane) 7,080

7 Petroleum engineers 6,860

8 Drilling coordinators/production managers 6,765

9 Truck drivers 6,440

10 Millwrights and machinists 5,160

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Sector 2012 Employment (Estimated)

Oil and gas services 94,100

Conventional E&P 72,000

Oil sands 22,300

Pipelines 6,800

Total Industry 195,200


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Oil and Gas Industry Employment Outlook to 2022

In the Low Growth scenario, the industry adds just under 18,300 jobs, while in the Expansion scenario, the industry adds 38,700 jobs.

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2012E 2013F 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F170,000

180,000

190,000

200,000

210,000

220,000

230,000

240,000

195,200199,700

213,500(+9%)

233,900(+20%)

Low Growth Scenario Expansion Scenario

Num

ber o

f Job

s


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Long-Term Hiring Outlook (2013 – 2022)Total recruitment activity over the next decade ranges between 125,000 and 150,000 to meet industry activity, age-related attrition and a 3 per cent non-retirement turnover.


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Occupations with Greatest Net Hiring Requirements to 2022

TOP TEN OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS* TO 2022 (# of job openings Low Growth – Expansion)Industry Total (62,440 – 84,030 )

1 Power engineers (steam-ticketed operators) 2,945 – 4,105

2 Heavy equipment operators (except crane) 2,425 – 3,990

3 Oil and gas well drillers, servicers, testers, and related workers 2,945 – 3,985

4 Drilling coordinators/production managers 3,050 – 3,945

5 Supervisors, oil and gas drilling and service 2,930 – 3,640

6 Oil and gas drilling, servicing, and related labourers 2,415 – 3,480

7 Petroleum engineers 2,150 – 2,910

8 Truck drivers 2,200 – 2,825

9 Oil and gas well drilling workers and service operators 1,860 – 2,590

10 Geologists and geophysicists 1,715 – 2,305

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*Net hiring requirements = hiring due to industry activity + age-related attrition (excludes non-retirement turnover)


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2006A 2007A 2008A 2009A 2010A 2011A 2012E 2013F 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

6.0

5.4

Balanced Labour Market Low Growth Scenario Expansion Scenario

Une

mpl

oym

ent R

ate

(%)

Projected Labour Shortages

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For both scenarios, there is no relief in sight as industry unemployment rates fall below a balanced labour market for the duration of the projection period.

5.1 5.64.9

Severe shortages experienced in 2007 are expected to return by 2014 when the industry unemployment rate falls to around five percent in either scenario.


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Occupational Labour Shortages

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Occupations with ten-year average projected unemployment rates below the balanced rate (both scenarios): • Chemical engineering technologists • Chemical engineers • Civil engineers • Crane operators • Drafting technologists and technicians • Drilling coordinators/production managers • Electrical/instrumentation engineers • Environmental technicians • Geologists and geophysicists • Heavy equipment operators• Heavy-duty equipment mechanics • Industrial electricians • Industrial engineering and manufacturing technologists

and technicians • Inspectors in public and environmental health and safety • Instrumentation engineering technologists • Instrumentation technicians • Insulators

• Mechanical engineering technologists

• Mechanical engineers • Millwrights and machinists• Mining engineers • Non-destructive testers and inspection technicians • Oil and gas drilling, servicing, and related labourers • Oil and gas well drillers, servicers, testers, and related

workers • Oil and gas well drilling workers and service operators • Petroleum engineers • Petroleum/mining/geological engineering technologists• Power engineers (steam-ticket required)• Project engineers • Purchasing agents and officers• Steamfitters and pipefitters • Supervisors, oil and gas drilling and service • Truck drivers • Welders


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Occupations with Above-Average Age-Related Attrition Rates

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OCCUPATIONAVE. AGE OF THE LABOUR

FORCE

TEN-YEAR AVE. AGE-RELATED

ATTRITION RATEIndustry Total 40 23%Supervisors, petroleum, gas and chemical processing and utilities 44 32%Drilling coordinators/production managers 44 31%Geologists and geophysicists 44 29%Industrial engineering and manufacturing technologists and technicians 42 29%Inspectors in public and environmental health and safety 42 29%Purchasing agents and officers 42 28%Supervisors, oil and gas drilling and service 43 27%Non-destructive testers and inspection technicians 40 26%Petroleum engineers and crane operators 42 25%Project engineers and industrial electricians 41 25%Drafting technologists and technicians 40 25%Petroleum/mining/geological engineering technologists 38 25%Civil engineers 42 24%Electrical/instrumentation engineers 40 24%Instrumentation engineering technologists 39 24%Power engineers (or steam-ticketed operators) 38 24%



Value-Added Analysis: Provincial Analysis


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Provincial Analysis

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British Columbia (BC) Alberta (AB)

Foreign investment and the province’s liquids-rich natural gas plays have kept BC’s oil and gas industry busier than expected, especially considering the lingering low natural gas price environment. However, the province is at a turning point as stakeholders wait to see if the development of an LNG export sector proceeds.

Technology has a significant impact on the province’s oil and gas production potential as it allows companies to undertake new exploration and rework old wells. Alberta’s oil sands are expected to expand at a sustainable rate although growth may be impeded by market and transportation constraints.

Saskatchewan (SK) Rest of Canada (RoC)

Growth is driven by increased activity in the prolific Bakken shale oil formation where technology is reversing the decline in light oil production. Technology is also boosting activity around Lloydminster as thermal technology is being applied to enhance heavy oil production in the area. With the increased use of rail to address pipeline capacity issues, activity is expected to increase over the next couple of years, regardless of scenario.

The majority of current industry activity is for Manitoba’s production from the Bakken shale oil formation, Nova Scotia’s offshore natural gas and Newfoundland and Labrador offshore oil. Technology has increased the potential of industry expansion across Canada, including the development of shale oil and gas deposits and the potential for LNG exports from Canada’s east coast.


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TOP TEN BC-BASED OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS TO 2022 (# of job openings Low Growth – Expansion)

Total BC-Based Oil and Gas Industry (3,100 – 4,100)

1 Oil and gas well drillers, servicers, testers, and related workers 285 – 410

2 Oil and gas drilling, servicing, and related labourers 225 – 355

3 Supervisors, oil and gas drilling and service 245 – 315

4 Truck drivers 225 – 300

5 Oil and gas well drilling workers and service operators 180 – 265

6 Drilling coordinators/production managers 180 – 230

7 Petroleum, gas, chemical process operators (no steam-ticket required) 145 – 185

8 Heavy equipment operators (except crane) 135 – 180

9 Millwrights and machinists 130 – 175

10 Welders 95 – 130

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Net Hiring Requirements in BC Oil and Gas Industry(Low Growth and Expansion)

Hiring due to industry activity

640 to 1,600

Hiring due to age-related attrition

2,460 to 2,500

10-year net hiring requirements

3,100 to 4,100


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TOP TEN ALBERTA-BASED OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS TO 2022 (# of job openings Low Growth – Expansion)

Total Alberta-Based Oil and Gas Industry (53,800 – 72,700)

1 Power engineers (steam-ticketed operators) 2,925 – 4,075

2 Heavy equipment operators 2,110 – 3,575

3 Drilling coordinators/production managers 2,585 – 3,350

4 Oil and gas well drillers, servicers, testers, and related workers 2,305 – 3,065

5 Supervisors, oil and gas drilling and service 2,320 – 2,865

6 Oil and gas drilling, servicing, and related labourers 1,920 – 2,700

7 Petroleum engineers 1,920 – 2,605

8 Truck drivers 1,690 – 2,140

9 Geologists and geophysicists 1,510 – 2,040

10 Oil and gas well drilling workers and service operators 1,465 – 2,000

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Net Hiring Requirements in AB Oil and Gas Industry(Low Growth and Expansion)


17,100 to 35,000


36,700 to 37,700


53,800 to 72,700


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TOP TEN SASKATCHEWAN-BASED OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS TO 2022 (# of job openings Low Growth – Expansion)

Total Saskatchewan – based Oil and Gas Industry (2,600 – 3,450)








8 Heavy equipment operators (except crane) 115 – 150


10 Welders 80 – 105

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Net Hiring Requirements in SK Oil and Gas Industry(Low Growth and Expansion)


300 to 1,100


2,300 to 2,350


2,600 to 3,450


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TOP TEN REST OF CANADA OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS TO 2022 (# of job openings Low Growth – Expansion)

Total Rest of Canada-based Oil and Gas Industry (2,900 – 3,750)







7 Petroleum engineers 95 – 125


9 Geologists and geophysicists 75 – 105


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Net Hiring Requirements in RoC Oil and Gas Industry(Low Growth and Expansion)


250 to 1,050


2,650 to 2,700


2,900 to 3,750


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Employment Impacts of Oil and Gas Investment and Activities to 2022

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Investments and activities by the oil and gas industry benefit all Canadians.



Building Canada’s Workforce

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Ideal Canadian Labour Supply Pools

Demand for Labour

Labour Force Participation Rate

Growth Rate of Working Age Population

Landed Immigrants

New Entrants

Unemployed/Underemployed

Aboriginal Peoples

Temporary Foreign Workers (TFWs)

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Demand-driven Workforce Solutions

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Given the global competitiveness for skilled workers, industry must continue working with government, education and training institutions and other labour supply stakeholders to increase the talent pool for the oil and gas industry.

www.petrohrsc.ca26 Funded in part by the Government of Canada and the Canadian Association of Petroleum Producers

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