North Sea oil and gas faces a growing skills crisis despite the area losing some of its attractions as an investment destination to other parts of the world, according to a report from technical advisers DNV GL.
Skills shortages are already driving pay to unprecedented levels in some areas and are seen as a major barrier to growth, with nearly half of those surveyed citing skills shortages and an ageing workforce as a major concern.
Almost 20% of European respondents said they intend to expand into more challenging territories this year and 28% plan to increase R&D related to new technologies to exploit those areas. Knowledge sharing alliances were also expected to be needed to tackle challenging environments.
The UK and Norway drop in the survey – Challenging Climates: The outlook for the oil and gas industry in 2014 - from joint 4th place last year in investment attractiveness to 7th and 9th respectively.
China, Malaysia and Canada have moved up the ranking which is topped again by the United States, Brazil and Australia. Confidence among the industry executives and oil and gas professionals surveyed was lowest in Europe where only 24% were strongly confident about the prospects for this year, compared to 44% in North America and 38% in the Asia Pacific region.
Some 20% of operators in Europe think the prospects for this year are worse than in 2013. Only 10% of European executives however feared that their profits would fall.
DNV GL’s Divisional Director for Europe Liv Hovem said: “Uncertainty in the industry has a lot to do with cost, which is one of the biggest challenges for the year ahead. We’re seeing signs of softening in the mega projects, but smaller projects are still happening. Capex is rising, but subsea is mitigating some of those costs and it’s a positive signal that investment in R&D will be highest in Europe, which will help ensure that mature fields remain viable and safe.”
The report also predicts that health and safety and environmental issues, especially those relating to monitoring and managing safety barriers, will continue to develop as important priorities.