EMBARGOED UNTIL 00.01 hrs 30 June 2008
30 June 2008
KPMG identifies major global skills shortage as potentially the single biggest single threat Oil Companies must overcome - National Oil Companies Fear Lack of Skilled Personnel
- KPMG launches National Oil Companies Survey (NOCS)
- World’s largest National Oil Companies surveyed believe lack of skilled personnel the number one risk to their businesses
- Investment in training one of the keys (RC) to future growth
- Smaller National Oil Companies more concerned with declining domestic reserves
Some of the world’s ‘Titans’ (largest NOCs), face a major skills shortage over the next decade as they struggle to replace their aging workforce, according to a survey released today by KPMG International.
In ‘Key Issues for Rising National Oil Companies’, a poll of Director-level executives across some of the world’s ‘leading’ national oil producers who control 72 percent of the world’s oil reserves, 100 percent of the companies surveyed said that a lack of skilled personnel was the biggest threat to their businesses going forward.
Anthony Lobo, Partner, KPMG in the UK, and Head of the UK’s Oil and Gas practice, said: “The rapid growth of the National Oil Company sector has outstripped the availability of employees in many parts of the world, and it is now a real risk to the future of some of these companies as they and their contractors struggle to meet demand and deal with the issues created by a workforce approaching retirement age.”
The survey comes on the back of a growing confidence among NOCs to produce their own oil with less reliance on outside support. Some of the world’s biggest exporters of oil and gas are now state-owned, including Saudi Aramco, Gazprom and the National Iranian Oil Company.
Yet at the same time, the report concludes, previous industry layoffs and recruitment freezes at times of low oil prices made the sector unattractive to graduates and in some areas, the petroleum industry is now seen as an industry of the past.
However, the ‘Tigers’ (smaller NOCs) are more concerned with declining domestic reserves (75 percent) and political risk (63 percent) as the biggest risk factors threatening their own companies.
Anthony Lobo added: “This report finds an interesting dichotomy between the largest and smaller national oil companies and their concerns. It is interesting to note their mutual concern regarding political instability and the risks associated with it, a factor that could affect all companies, large or small. The lack of skilled personnel is the chief concern of larger national oil companies, far greater than their smaller counterparts, who are principally concerned with the more immediate issue of declining domestic reserves. A further important finding of the report should be noted and that is the increasingly important role that service companies are playing through the key projects they have undertaken with NOCs. I predict that the growing power of service companies will play a significant role in the future of the industry.”
-ENDS-
For further information please contact:
Anthony Lobo
UK Head of Oil and Gas
KPMG in U.K.
Tel: 00 44 20 7311 8482
E-mail: Anthony.lobo@kpmg.co.uk
Lorna Siddall
Head of Public Relations, Global Markets
KPMG International
Tel: 00 44 20 7694 8234
Mobile: 00 447715 760 337
E-mail: lorna.siddall@kpmg.co.uk
About the research:
This report was written by Dr Valerie Marcel, Associate Fellow at Chatham House. Valerie is a well-known oil and gas academic who specialises in oil markets, the role of National Oil Companies and political stability in Middle Eastern producing states. Her previous publications include Oil Titans; National Oil Companies in the Middle East, published by Brookings Institution & Chatham House (2006). Chatham House has been the home of the Royal Institute of International Affairs for over eight decades. Its mission is to be a world-leading source of independent analysis, informed debate and influential ideas on how to build a prosperous and secure world for all.
Qualitative interviews were also conducted with the following senior executives:
- Saudi Aramco – Khalid A. Al-Falih, Executive Vice President for Operations
- Thamir Ghadhban, Chairman of Advisory Commission, Prime Minister’s Office, Government of Iraq
- Kuwait Petroleum Corporation – Jamal A. Alnouri, Managing Director of Planning
- Petrobras – Milton Costa Filho, Managing Director of Petroleo Brasileiro Mexico
About KPMG
KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 145 countries and have 123,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss cooperative. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
KPMG International performs no professional services for clients nor, concomitantly, generates any revenue.