We are at a unique inflection point in history. The grand narrative is showing signs of shifting away from ‘oil and gas is evil’ to one calling for a more balanced approach to managing the energy supply. With the dawning realisation that net zero is facing challenges more complex than initially imagined, it is clear that Australia and the rest of the world will depend on oil and gas for many years longer. A skilled workforce is required to manage the processing of these resources. However, the industry faces an even more monumental problem: a skills gap that will take years to repair.
This is the second of a two-part series exploring the jobs outlook and future of oil and gas talent, a companion to our recently released Subsurface Oil & Gas Employment Insights Report. Here, I will explore the long-term opportunities and challenges in building a capable oil and gas workforce that can continue playing a critical role in our energy supply.
Bottlenecks for Oil and Gas Recruitment
As I explored in the first article in this series, the oil and gas industry’s most significant recent challenge has been a prolonged reduction in capital, which has hampered progress. With a shift in government policy, capital investment is showing signs of recent growth. Now, the next major challenge will be accessing fresh talent.
The narrative portraying oil and gas as a dying industry has done considerable damage to the future workforce, making oil and gas recruitment an uphill battle. Over the past ten years, campaigns against fossil fuel use have discouraged students from pursuing careers in fields like geology or petroleum engineering. Unsurprisingly, universities have, in turn, stopped offering these courses due to a lack of demand.
The Skills Gap is Approaching a Crisis Level
Although there are signs more junior talent is entering the industry – increasing by 5% from last year, as our research shows – there is much work to be done for building a viable long-term workforce.
The oil and gas industry is facing current and projected skills shortages that are significant enough to cause alarm. At the most immediate end of the spectrum, there are presently too few professionals in the early stage of their careers (those with 0 to 10 years of experience).
Within the next 10 years, we expect an even more concerning skills gap to emerge for oil and gas professionals who have between 10 and 20 years of experience. If we lose this cohort of senior talent, who will coach and mentor the juniors?
Over the decades, companies have invested billions globally in understanding what works and what doesn’t in this industry, learning some very costly lessons along the way. We mustn’t lose this hard-earned knowledge. We need to ensure the transfer of this expertise to the next generation of oil and gas professionals, and to do that, we need new ways to find and develop new talent.
Developing Talent from Within
The reality is that hiring juniors who still need to learn the job requires senior professionals available to spend time mentoring them, correcting their work and helping them get up to speed.
While this is beneficial in the long term for the industry, the immediate pressure to get work done has led smaller companies – already running lean – to rely only on senior staff instead. After all, seniors can do the work quicker and at a lower cost. Ultimately, the cost of developing juniors has made it difficult to justify bringing on less experienced talent and developing them.
Larger companies – Woodside, Santos and their ilk – have had more success in bumping up the rate of new entrants into the industry with their graduate programs. Many smaller companies are not yet at the stage where they can recruit graduate talent, but we do expect this to change over the coming years as capital investment accelerates.
In our 2024 oil and gas salary survey, 6% of respondents had between zero to five years of industry experience, compared to just 3% the previous year. These numbers are still quite low, but it is notable that the percentage has doubled year over year.
Rebuilding Oil and Gas Graduate Programs
What will compel more young people to consider a career in oil and gas? Several factors would need to align: oil and gas engineering degrees are making a comeback in universities, and perceptions are shifting to recognise gas as an indispensable part of our energy future. In turn, universities may start offering these courses again.
In the meantime, we must consider alternatives for developing critical skills. One way around the skills chasm is tapping into other STEM disciplines with adjacent skill sets. We could attract graduates from science backgrounds – those who may have studied physics or mathematics – and retrain them for careers in the industry. This would involve offering more comprehensive oil and gas graduate programs, recognising that while they might not be petroleum engineers, they have valuable skills we can build on.
Hiring Visa Workers in Oil and Gas Jobs
The Australian government is suggesting employers offer more oil and gas jobs for professionals on visas. Although we’re fielding enquiries from many oil and gas professionals from around the world who have been granted permanent residency in Australia, many organisations are reluctant to hire them. Our survey shows just 4% of companies intend to hire people for oil and gas jobs with visa sponsorship, down from 48% last year.
The issue is that we already have underutilised talent within Australia – experienced people who are still available for work or are looking for a change after a tough few years. Employers tend to prefer local candidates who are already familiar with the Australian work environment, have local contacts and can easily meet for a coffee.
Oil and gas jobs with visa sponsorship will become important once industry hiring heats up further and the pool of available domestic candidates is exhausted. When employers start looking for additional talent, those with existing visas will likely move to the top of the list.
At the same time, however, other countries will also be looking for more oil and gas professionals, offering opportunities to our Australian workers to move abroad, whether to the Middle East, America, or elsewhere. This could leave us in a situation where we are just shuffling the same limited pool of talent around without actually increasing the number of skilled professionals available.
Preparing for Oil and Gas Jobs Growth
In any given future scenario, the industry will need a fresh influx of talent, whether from other STEM fields or other sources we can identify. Beyond short-term strategies to attract senior talent or hire people on visas, more long-term solutions are essential for addressing this talent shortage effectively.
I believe it is important to emphasise that oil and gas will be an industry that is rebuilding, not fading away in the coming years. There is much evidence to suggest that this industry will continue to be active for the rest of our professional if not natural, lifespans. Now, the challenge is to convey that message to younger generations who could become the oil and gas engineers of tomorrow.
Discover More Oil and Gas Recruitment Insights
For more insights and data on oil and gas jobs and salaries, access your free copy of our Subsurface Oil & Gas Employment Insights Report here, or please contact me or one of our recruitment specialists.