Article by Adam Becis, Principal Reservoir Engineer

With the never-ending expansion of the energy industry into more diverse and varied locations, more and more countries are faced with regulating the development of their natural resources. It could be argued that these countries include less-developed nations with small populations and short national histories; additionally they can be geographically isolated. The arrival of the energy industry can pose a question for a recently-formed National Oil Company (NOC) or Government Authority (GA): what technical resources can be utilized to not only regulate the entry of foreign companies, but also to ensure that the country benefits the most over the production life of its hydrocarbon assets?

It may be that there is no organic technical talent available in the local workforce. Rushing to implement an industry framework, the NOC or GA may choose the short term option of utilising the services of consultants or a consultancy to provide technical advice and support.  This international consultancy experience may be vital to aid in creating industry rules and regulations, organising bid rounds, and approving initial exploration programs and developments. However, NOC or GA may be faced by the prospect that all the experience and expertise from the process will now be walking out the door, and without careful planning there may be no other option to repeat the process again. What can be done to break this cycle and develop indigenous  talent with the requisite skills to fulfill technical requirements, and develop experience and information within the organisation?

Organic Development – The Answer?

As revenue develops, many small nations combat the talent issue by investing the newly available funds in sending promising young high school students to overseas universities to study a variety of disciplines, with a focus on geology and engineering. This appears to solve the skills shortage as youthful, energetic graduates return with the necessary qualifications and a strong allegiance to the nation that has invested in their future.

However, there are difficulties with this approach. If from non-English speaking backgrounds, these students may struggle with language or cultural challenges that overseas universities may pose. Upon graduation, and with no industry experience, these same students are expected to return to the NOC or GA and immediately step into an important, senior technical role. Understandably, and through no fault of the graduate, the technical assignments completed may not be up to the required standard. The flow on effect is that the once promising young graduate may become disenchanted and unmotivated.

As the senior management of the NOC or GA comes to the realization that some of the staff resources at their disposal are not performing to the required standard, they may once again have no option but to bring in a consultancy to support and provide the necessary technical rigour. This may now offer an opportunity for the graduates to learn “on the job” working in conjunction with senior consultants. But unless they are coupled with a very understanding consultant, it is possible that a graduate will still be performing some minor, less onerous tasks.

Missing Pieces – HR & Salary

In addition, NOCs and GAs, similar to small independent petroleum operators, may not have the resources to provide the support that comes as standard within with large, multi-national companies. Tools such as skills tracking, career development paths, soft-skills training and performance review processes may simply not be optimally performed. Talent development and management frameworks may not be fully implemented, leaving young staff without a clear direction for developing their skills and expertise. 

It may also be that the local graduate, who has been sponsored to study overseas, may find themselves with employment contracts that  lock them into contracts that may be several years in length, and the remuneration differences between them and their international peers may become stark. With the potential to exploit their talents for higher reward, talented staff may jump ship at the first opportunity.

Options - What to do?

• Continue to rely on Consultants for Technical Work

This can be costly. Additionally there is problem of defining objectives and aligning consultant priorities with the interests of the NOC or GA. It may also be that some consultants will only complete the short-term objectives that they are contracted for, without a wider, and more holistic view of the needs of the employing organisation.

When the consultant leaves, the learning and information from the work they have performed may leave with them. To overcome this, a consultant can be hired on a long term or retainer basis, but this could prove to be even more expensive.

• Second Graduates out to IOCs

With the entry of an international operating company (IOC) into a country’s energy industry, a provision may be included in development agreements to ensure young national staff are seconded into operating company technical positions. This will expose them to a technical working environment and develop their skills and expertise. A secondee and secondment have to be managed well, as without due care and alignment, they may be given more marginal roles. The stark difference in remuneration may also cause the NOC employees who are seconded to leave and join the international organisation.

• Sponsor Students with No Contract Requirements

One successful strategy has been to sponsor university students in overseas programs, and encourage them to seek employment with foreign operators, particularly majors and large independents. Once they have gained the requisite skills and experience from the wider industry, these graduates will be actively recruited into the NOC or GA. However, this may come at a price. However, this strategy begs the question, what to do in the meantime? In the short term, there may be no other choice  available but to rely on less experienced staff or utilize consultants.

• Partnerships with Larger NOCs

Smaller nations may not have the resources to rapidly develop. By aligning with larger NOCs from similar countries or regions, employees from a smaller NOC or GA may gain access to career resources to which they otherwise would not be exposed. Larger NOCs operate in different countries, have varied roles, offer training opportunities and provide human resources support.

• Create a NOC Talent Development Group

By pooling the resources of a number of small NOCs and/or GAs, development opportunities may be extended to their junior staff. Dependent on language or cultural similarities staff would be able to work in different NOC/GA offices on different projects.  Creation of such a group may be difficult if a country is geographically isolated. Additionally, the associated organisations may need to have senior technical staff to provide technical guidance, support and mentoring to the junior staff.

Looking Forward - Short Term & Long Term

In the short term, one of the better options for NOCs and GAs may be to align themselves with culturally and language-similar, larger NOCs to provide roles for existing junior staff. If there are no alignment opportunities available, the only option may be to approach operating companies in the domestic industry to create secondment opportunities for younger technical professionals. This will at least enable the existing junior staff to gain industry experience and expand their technical skill set. During this period it is likely that consultants will be relied upon to provide the majority of technical support.

For the longer term, sponsorship of students at overseas universities should continue. The more graduates there are from a country in the global petroleum workforce, the greater the probability highly qualified and motivated individuals can be encouraged to work for the NOC or GA. It is a hard sell to demonstrate the benefits of scholarships when there is no guarantee that there will be a return on investment from returning experienced graduates joining the organization. However, a small number of key national staff is all that may be required, to provide the technical backbone for an NOC or GA.

Talent development is not a short term proposition, especially in an industry where projects can take years to develop and asset lives stretch into decades. This success will be measured in the ability to fulfill technical requirements, retain project information and capture technical expertise within the NOC or GA. The resultant high quality technical work will most certainly provide improved outcomes for regulation and decision making for the country in the regulation and exploitation of its energy resources.