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The “Great Crew Change” has been widely reported in the global scale for the upstream oil and gas sector, starting from the early part of last decade. This term refers to a sudden and irrecoverable loss of knowledge and expertise in an industry, because of the age demographics leading to a high proportion of the workforce becoming eligible to retire. The upstream industry in India is also predicted to be facing a serious deficit in technical workforce, since more than half of the sector’s hands-on technical talents will need to be replaced during this decade. The crisis is more acute in the drilling sector since the core competency for a driller is generally not part of university curriculum. The industry still depends on years-of-experience-on-a-rig to qualify a good driller. The impact of Great Crew Change to the drilling industry is simply apparent in the huge cost burden to the drilling contractors are carrying in their budget in the recruitment and retention of experienced crew. While the talent conundrum is a matter of global concern, it also creates an opportunity for a country like India where there is a vast young educated population with secondary education and ready for vocational skill programs that can lead to attractive job market. This paper will be discussing the historical perspectives of the ‘Great Crew Change’ and the collaborative initiatives required by the industry to not only to mitigate the impending talent crisis, but also to serve the national cause of developing a trained and certified man-power resource base for global market.
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Crew Resource Management in Oil & Gas Industry
Upstream India – Drilling Sector
Presented by: Tapas Kumar Basu
Slide No Talent Conundrum
Big Crew Change 3 Global Issue 4 Upstream India 5 Projected Staff Shortage 6 How it happened 7 Challenges 8 -9 Consequences 10 - 12
Driving the Change Accidents and Fall outs 13 Technology 14
HR Initiatives Upstream Global 15 Upstream India 16
Upstream India Talent Conundrum 17 Profile of Drilling Sector 18 2013, Rigs and Drilling Crew 19 What do we need 20
New Framework Value of Competence – India 2013 21 IADC – Knowledge, Skills and Abilities 22 Crew Development Needs 23 What is available and what is required 24 Need for Strategic Collaboration 25 New Initiatives – Year 2013 26 Look Ahead – Year 2014 27
Slide No: ‹3›
Slide No: ‹4›
2005: Average age in O&G industry is 49; among the oldest of any industry…
2015: More than 50% of the workforce are ready to retire..
Slide No: ‹5›
2010: Average age is 47 for the NOCs which constitute 80% of upstream work force of the country
2015…………???
Slide No: ‹6›
……Short supply of competent crew and looming talent crisis
Slide No: ‹7›
Analysis of 4 decades (1974 - 2013)
74 - 80 Oil price is going up
74 - 83 Upstream is booming
85 - 89 Oil price crashes
90s Upstream is ailing
……….Oil Industry workforce starting career mid-80s to end-90s is virtually missing
Slide No: ‹8›
More challenges as we go forward….
Slide No: ‹9›
Slide No: ‹10›
Slide No: ‹11›
Cost of Incompetence
Slide No: ‹12›
1975 – 1980: peak in US E&P activities,
average ft/active rig went down up to 30%
Future: increased activity, frontier
technology compounded by big crew change
Globally Incompetence may lead to loss of 10% from US$ 700 billion E&P spend
Slide No: 13
In the Oil and Gas accidents are lost into HSE
statistics..
Piper Alpha in North sea and Mocando in GoM
received global attention which highlighted:
Poor Safety Culture in the upstream industry
Human Factors are the primary tool for
prevention
and were the primary vector for changing the industry norms…..
Slide No: ‹14›
Exploration successes in deepwater and ultra-deepwater
Complex Rigs, Subsea Systems and Production Facilities
Expensive exploration program
Many new entrants in deepwater drilling and services
Currently, demand driven by exploration work;
Will increase manifold as development activity begin
Journey into Deep/ Ultra-deepwater
....importance of Safety and Performance had never been so important
Slide No: 15
Last decade large scale global initiatives to address the Big Crew Change had
been initiated by -
Governments (UK, Norway, Australia, Canada & USA),
Education Institutions (Texas Tech University, University of Calgary),
Consulting Agencies (SBC, E&Y, Deloitte, Accenture, Bain & Co etc..) and
E&P Majors, Contractors and Associations (IADC, SPE etc) :
Slide No: ‹16›
2006 – PWC & Petrofed “Workforce Sustainability and Crew Management in Upstream Oil and Gas Industry”
2007 – Hewitt & Oil PSUs “Compensation Benchmarking and Attrition..”
2009 – FICCI and UKIBC “Framework of Vocational Education..”
2010 – Booz & Co “Big Crew Change and Talent Crisis in India’s Oil and Gas Sector”
Common Findings
Aging Workforce
Scarcity of Skills
Lack of Vocational
Education
Slide No: ‹17›
4
5
6
7
8
9
10
11
30
32
34
36
38
40
42
44
2005 2006 2007 2008 2009 2010 2011 2012 2013
E&P
Budg
et (b
n U
S$)
Tota
l Wor
kfor
ce (x
100
0) --
>
Upstream India: E&P Budget and Total Workforce
Source: Indian P&NG Statistics 2012 - 13,
GoI, MoPNG, Economic Div
“Big Crew Change” …..it will not fix by itself
Slide No: ‹18›
Slide No: ‹19›
Rig Count Total (Drilling & Workover): 216 •Utlisation: 70%
Total (Platf, Jack-up, Floater): 49 • Floaters 12, Jack-ups: 37
Rig Crew Count Estimated Total: 15,000 •Potential for new requirement: 6,000
Estimated Total: 5,000
Slide No: ‹20›
The Upstream industry spends about US$ 3 bn, 30% of the E&P budget on drilling of wells
Drilling sector employs approximately 15,000 skilled workforce
India is still a major source of drilling crew in ME region and Africa
Crew Development: Experience (Long) vs Skill Certification (Fast Track)
Migration plan for talents: from onshore to offshore, from non-upstream to upstream services
Training for New-gen developments: cyber rig operation, deep-water technology, sub-sea system
Estimating Value of Competence: India 2013
Slide No: ‹21›
Total no of wells drilled 580
Drilling Spend (≈ 35% of E& P budget) US$ 3 bn
Avg. flat time as % of total time per well 20% - 40%
Slide No: 22
IADC: Knowledge, Skills, and Abilities (KSA)
List of minimum Knowledge, Skills, and Abilities required to perform the jobs for all rig-based positions – RA to OIM
Published in Offshore Competency Training Programme
Enhanced Competency Guidelines for rig personnel confirming proficiency levels of current work force and developing competence levels for new
entrants
Slide No: ‹23›
Human Capital Growth
Retention
Recruitment Development
Slide No: ‹24›
Course No of Schools
Drilling Technology 1
WellCAP (IADC) 6
Rig Pass (IADC) 8
HUET, First Aid, Fire Fighting, BOSIET, PST etc.. Many
1. KSA Program for Rig Crew (IADC) 2. OIM Certification (MODU)
3. Continuous Development Program (e.g PETEX)
4. Communication, Leadership and Emergency Response & Crisis Management
5. Competency Assessment Program by Drilling Contractors
6. Accreditation as per International Standard
7. Crew Qualification in Drilling Contracts
Slide No: ‹25›
E&P Operators
Contractors
IADC, SPE
Universities
Regulators
Though major stakeholders in
developing competent crew are
E&P companies and the drilling
contractors, the success of the
program can be achieved by
collaborative efforts to create
consensus, sustainability and value
chain
Slide No: ‹26›
Major Drilling Contractors from both Offshore and Onshore sector have started reviewing the new framework for the crew development
Year 2013 IADC SCAC: A new sub-committee to define the KSA for Drilling Crew;
Slide No: ‹27›
…Year 2014
•IADC, Operators and Contractors: Agree on the KSA or KSA-revised, progressive 1
•Contractors, Simulation Experts and Training Institutes: Create Infrastructure 2
•Contractors: Recruit, Train Crew as per KSA, Develop and Implement Competence Assessment Program (CAP) and Continuous Education Program (CEP)
3