SBC 2011 HR Benchmark Report.ashx

© 2012 Schlumberger Business Consulting. All Rights Reserved. 0

SBC 2011 Oil & Gas HR Benchmark Summary presentation

This document contains “forward-looking statements”- that is, statements related to future, not past, events. In this context, forward-looking statements often address our expectation of future conditions including, without limitation, economic conditions, energy demand, energy supply and capability requirements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.


Schlumberger Business Consulting HR Benchmark gathered data from 37 E&P companies

8 2

11

8

6 2

North America

Latin America

Europe

Asia

Middle-East

Africa

18

6

13 Independent

Major

NOC

37 Oil & Gas companies

29 in 2010

24 in 2009

Almost 40% of World Oil & Gas production covered

Most comprehensive qualitative and quantitative data set in the industry

E&P COMPANIES PARTICIPATING


Source: SBC O&G HR Benchmark 2011 TM A trademark of Schlumberger Business Consulting

Over the years, the survey has developed powerful new concepts

FREQUENTLY USED TERMINOLOGY

PTPs

Experienced PTPs

• Petrotechnical Professionals: geoscientists (geologists, geophysicists and petrophysicists) and petroleum engineers (reservoir, drilling, completion and production engineers).

• Autonomous PTPs, i.e. those having acquired sufficient knowledge and experience to be able to make non-standard, original technical decisions.

Young PTPs • PTPs that have not reached autonomy status. They are still in learning mode and cannot be requested to make non-standard, original technical decisions.

PTP Intensity™ • Average number of PTPs per 1,000 barrels of oil equivalent operated daily production • Can be divided into experienced PTP Intensity or overall PTP Intensity

Time to Autonomy • Number of years needed for a PTP to make non-standard, original technical decisions. • Concept developed by SBC in 2006 together with the Supply Chain of Talent TM.


E&P industry is going through a major transition with tensions raising everywhere.

High growth companies have more technical people than others and pragmatic HR policies: no barriers to promotion, higher diversity, on the job training.

Time to autonomy is a key indicator companies seek to reduce

Gender diversity is now mainstream, except for majors who struggle to increase women

proportion in their workforce.

AGENDA

Our message: HR is the main driver for long term production growth


Note: Retirement rate: 20% for 55y-59y, 90% for 60y-64y, 100% for 65y+ Recruitment targeted inputted in the demographic profiles as follows: 40% in 20y-24y, 60% in 25y-29y Attrition at 1.4% (people leaving the E&P industry) Source: SBC O&G HR Benchmark 2011; SBC analysis

By 2015, E&P industry will have achieved its “crew change” transition

PTPs PER AGE BRACKET ON A GLOBAL BASIS %

2010

2015

20y - 24y 25y - 29y 30y - 34y 35y - 39y 40y - 44y 45y - 49y 50y - 54y 55y - 59y 60y - 64y 65y+ 0%

5%

10%

15%

20%

25%


0

2,000

4,000

6,000

8,000

10,000

12,000

2005 2006 2007 2008 2009 2010 2011 E2012 E2013 E2014 E2015 E2016

Demand as per 2005 to 2010 Benchmarks

Demand as per 2011 Benchmark

PTP GRADUATES GLOBAL RECRUITMENT TARGETS

Note: Excludes China Source: SBC O&G HR Benchmark 2011 , Company data

2005- estimated 2016

Recruitment of graduates is pursuing its recovery

Total Recruitment


2011 2015

-3,200

2011 2015 required 2015 Projections**

Projections vs. Requirements

PTPs OLDER THAN 35 YEARS

* Considering IEA production forecasts, Current Policies scenario for 2010-15: 2,25% GAGR ** 2010 workforce projected to 2015 based on: 1.4% Attrition; Company recruitment targets; Retirement rate at 20% for 55-59 age group, 90% for

60-64 age group, 100% for +65yr Note: Excludes China / Excludes oilfield service companies Source: SBC O&G HR Benchmark 2011; Company data, SBC Analysis

Number of PTPs Number of PTPs

Deficit of people is concentrated on mid-career population

ESTIMATION OF POTENTIAL 2015 TALENT GAP

All PTPs

Net Loss of Experienced PTPs = - 5,500

Experienced PTPs

83,000 60% of

total PTPs

77,500 52% of

total PTPs

153,000 Required # of

PTPs to cover demand,

at equal PTP Intensity to production

137,800 current # of

PTPs

149,800 based on

recruitment, attrition and retirement forecasts


MID CAREER GLOBAL RECRUITMENT TARGETS

Source: SBC O&G HR Benchmarks 2010 & 2011. Identical panel of respondents

Normalized, 2010-2013

Mid-career recruitment is increasing

80

100

120

140

160

180

200

2010 2011 2012e 2013e

NOCs

International NOCs

Majors

Independents

© 2012 Schlumberger Business Consulting. All Rights Reserved. 8 Source: SBC O&G HR Benchmark 2011

Many companies cannot find experienced people in their home country

WHAT IS THE ESTIMATED PROPORTION OF RECRUITMENT THAT CANNOT BE COMPLETED EVERY YEAR BECAUSE OF INSUFFICIENT HOME MARKET TALENT?

FOR YOUNG GRADUATES FOR MID CAREERS

% range of unfilled positions

0%

10%

20%

30%

40%

50%

60%

70%


4.2%

2.6% 2.6%

5% 4.9%

4%

Independents Majors NOCs

Source: SBC O&G HR Benchmark 2011

GEOSCIENTISTS PETROLEUM ENGINEERS

Attrition is increasing

2011 ANNUAL VOLUNTARY ATTRITION GEOSCIENCES AND PETROLEUM ENGINEERING

2010 2011

5.8%

3.5% 3.9%

7.2%

5.1% 4.6%



AVERAGE RETIREMENT AGES PER REGION 2010 VS. 2011

Note: Insufficient comparable data in Middle East and Africa Source: SBC O&G HR Benchmark 2011; Company data

Retirement age is increasing

identical sample of companies

EUROPE & CIS

NORTH AMERICA

LATIN AMERICA

ASIA

2010

2011

58.5

55 56

57 58

57.5 58.5

58


44%

67%

0%

0% 100%

Note: No companies have indicated that they abandon projects when facing staffing difficulties Source: SBC O&G HR Benchmark 2011

Staffing issues have serious consequences on projects

WHAT ARE THE CONSEQUENCES OF STAFFING DIFFICULTIES?

Delay projects

Take more risk because of tight staffing

Increase non-operated assets

Western Independents Majors NOCs

60%

20%

0%

0% 100%

71%

57%

43%

0% 100%

% of respondents




Time to autonomy is a key indicator companies seek to reduce.



AGENDA



QUALITY OF CORRELATIONS ANALYZED

Reserves and Operated Production are correlated with number of PTPs

All PTPs

All Geoscientists

Geologists

Geophyscists

Petrophysicists

Drilling Engineers

Production Engineers

Reservoir Engineers

Completion Engineers

Operated Production Reserves (1P)

Reported Production


All Petroleum Engineers

Other Engineers

Support Functions HR Staff

HSE Staff

Strong (R2>0.9)

Good (R2>0.8)

Questionable (R2>0.7)

No correlation (R2<0.7)


X x

Y

y

Number of PTPs per unit of operated production


High growth companies have more PTPs per unit of production (higher ‘PTP intensity’) than low growth ones, and proportionally more Geoscientists

Average Op. Prod CAGR 06-10

PTP INTENSITIES AND AVERAGES SORTED BY GROWTH

HIGH GROWTH COMPANIES

LOW GROWTH COMPANIES

4.8% -0.5%

Geosciences Petroleum Engineering


50% 50% 50%

57%

27%

36% 36%

55%

Use virtual team technologies

Use productivity enhancing

technologies

Outsource Standardize projects to staff more juniors


High growth companies use technology to improve productivity of staff

HOW DO YOU MITIGATE PROJECT STAFFING DIFFICULTIES? % of respondents

High Growth Low Growth


52%

17%

38%

13%

On-the-Job Training

Coaching


2.6

3.4 3.2

4.0

Note: Process is understood from sourcing to acceptance * from company’s home country Source: SBC O&G HR Benchmark 2011

High growth companies have pragmatic approaches to HR

EXPATRIATES RECRUITMENT PROCESS CYCLE TIME

Mid Careers - NATIONALS*

Mid Careers - EXPATRIATES

Average months per peer group

76%

43%


% of respondents

DO YOU INTEND TO BRING BACK RETIREES?

% OF TIME SPENT PER TRAINING TYPE FOR JUNIOR PTPS? Average % per respondents


27%

19% 18%

11%

Geosciences Petroleum Engineering


57%

29%


GENDER DIVERSITY AMONG PTP DISCIPLINES


% of respondents Average % of females PTPs in total PTP Headcount

High growth companies promote people faster and are more gender diverse

IS SENIORITY TAKEN INTO ACCOUNT TO REACH A POSITION OF AUTONOMY?







AGENDA



75%

33%

75%

0% 100%

47%

35%

71%

0% 100%

% of respondents

Note: no companies have indicated that they abandon projects when facing staffing difficulties Source: SBC O&G HR Benchmark 2011

The concept of Time to Autonomy, developed by SBC in 2006, is now a key marker of competency development effectiveness

WHAT IS THE MEASUREMENT CRITERIA USED TO ASSESS TRAINING EFFECTIVENESS?

Time to reach autonomy

Technical Tests

Individual performance appraisal done by line

Short Time to Autonomy Long Time to Autonomy


0

2

4

6

8

10

12

14


Western Independents have the shortest time to autonomy

AVERAGE TIME TO AUTONOMY ACROSS DISCIPLINES Number of years necessary to reach ability level

Ability to … Execute assigned tasks

… Choose among several standardized

tasks

… Make non-standard, original

technical decisions

… Make personnel decisions

(recruitment, transfer etc)

Years to Autonomy Time to autonomy is the time required for a company to drive PTPs to make non-standard, original technical decisions

NOCs International NOCs Majors Western Independents

6.7

11 8.2

11







AGENDA



PROPORTION OF FEMALE IN TOTAL STUDENTS PTPS GRADUATING IN 2010 Bachelor, Master and PhD in Geosciences and Petroleum Engineering

Female ratio in universities can exceed 40% in certain regions, but it is still below 20% in North America

Source: Data from universities. In Asia: China, Japan, Pakistan and Thailand . In Europe: Austria, France, Germany, Hungary, Italy, Netherlands, Norway, Turkey and United Kingdom. LAM: Argentina, Bolivia, Colombia, Mexico, Peru, Trinidad and Venezuela. SEA and Australia: Australia and Malaysia. Russia – Caspian: Azerbaijan, Russian Federation. MENA: Egypt, Kuwait, Libya, Qatar and UAE. NAM: Canada and USA

0%

10%

20%

30%

40%

50%

Global Asia LAM Europe SEA and Australia

Russia-Caspian

MENA NAM


0%

10%

20%

30%

40%

50%

STUDENTS IN PETROLEUM ENGINEERING In percentage of women over total graduating in 2010 In percentage of women over total graduating in 2010

There are more women in Geosciences than Petroleum Engineering

STUDENTS IN GEOSCIENCES

0%

10%

20%

30%

40%

50%

Source: Data from universities. In Asia: China, Japan, Pakistan and Thailand . In Europe: Austria, France, Germany, Hungary, Italy, Netherlands, Norway, Turkey and United Kingdom. LAM: Argentina, Bolivia, Colombia, Mexico, Peru, Trinidad and Venezuela. SEA and Australia: Australia and Malaysia. Russia – Caspian: Azerbaijan, Russian Federation. MENA: Egypt, Kuwait, Libya, Qatar and UAE. NAM: Canada and USA


PROPORTION OF FEMALE IN O&G COMPANIES, 2006, 2010 & 2011

Except Majors, companies are increasing women proportion



Identical sample of companies

0%

5%

10%

15%

20%

25%

30%

35%

40%

GG PE0%

5%

10%

15%

20%

25%

30%

35%

40%

GG PE2006 2010 2011

0%

5%

10%

15%

20%

25%

30%

35%

40%

GG PE


19%

11%


27%

18%


FEMALES IN PETROLEUM ENGINEERING Average % of respondents

High growth companies are more gender diverse

FEMALES IN GEOSCIENCES Average % of respondents








Conclusion: HR is the main driver for long term production growth

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SBC 2011 HR Benchmark Report.ashx