Key Labor Shortage Reported in Middle East Energy Sector

Energy Sector Needs More Nationals

According to a study conducted by Mr. Kenneth McKellar, a partner and Middle East energy and resources expert at Deloitte in the Middle East, unless more, young, skilled and talented native individuals are trained and employed for leadership in the utilities and energy sector, these industries will soon face a crisis in management services.

Mr. McKellar explained the development of the crisis as follows:

“In the recent past, national oil companies in the Middle East had to compete with other regions of the world for the best available human resources from their partners, the International Oil Companies who positioned their best exploration and production talent at the more technologically challenging areas such as the deep water Gulf of Mexico, Brazil, West Africa, the Caspian and emerging areas of Asia Pacific. Today, IOCs are attracted by the size, availability and stability of the resources available in the Middle East region.”

Fortunately the shortage of talent from the Middle East is being addressed by Gulf Cooperation Council (GCC) countries in several ways. Quotas are being established to insure there is at least a minimum number of nationals employed at the management level in the utilities and energy sector; funding for educational as well as vocational programs is gaining strength; and succession planning is also being emphasized as a ‘key imperative.’

Aging Leadership

Today, according to McKellar’s study, the average age of the technical staff in the resources and energy industry is over 50. An important approach to correcting this problem and bringing down the average age of technical staff is to select the most talented young employees and fast-track them according to their individual technical and business skills.

The study identified some important ways that the national oil companies are using in response to the problem of nationalization and dearth of skills, including paying for advanced education which is a primary part of staff development and retention. Just last year Saudi Aramco sponsored the continuing education of almost 2,000 undergraduate and graduate Saudi students in North America, Europe and also in Saudi Arabia.

Present Situation Untenable

If the GCC and other Middle Eastern countries do not fully address the issue of lack of home-grown talent in the energy and resources sector, an unsustainable and untenable situation of transient, expatriate labor will be needed to support this crucial industry, a prospect which is fraught with problems and uncertainty.