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01
Contents
Overview of the Indian oil and gas sector
1.1 Oil and gas in Indias energy portfolio 2
1.2 Changing business landscape 2
02
Talent shortage
2.1 Manpower requirements 4
03
Key HR challenges
3.1 Aging workforce 6
3.2 Retirement 6
3.3 Attrition 6
3.4 Attracting talent 7
3.4 Inadequate supply of talent from institutes 7
04
Global HR challenges
4.1 Employment cycles 8
4.2 Aging workforce 8
4.3 Inadequate supply of talent and dwindling course intake 9
01
Section
Overview
1.1 Oil and gas in Indias 1.2 Changing business
energy portfolio landscape
of the
With a GDP of US$1.25 trillion, India India is currently facing a substantial
is currently the worlds fourth-largest crude oil deficit, as its current production
economy. The countrys oil and gas levels are lagging behind the fast pace
Indian oil
sector has contributed significantly to of the economy. This has resulted in
the GDP, and the sector is expected to significant imports of crude oil. The
become increasingly critical for Indias demand-supply gap is set to widen in
and gas
economic development, since it fuels the future with a consumption increase of
growth of other sectors. India is already 47% between 2008 and 20181 and with
the fifth-largest energy consumer in production poised to increase by around
the world, with oil and gas accounting 12% in the same period2.
Talent
2.1 Manpower requirements T
he upstream sector is expected
to see the maximum shortfall, with
Anticipated business growth in the sector a requirement for around 7,600
shortage
is contingent on the availability of skilled employees in the next five years
manpower in the country. As such, on account of high attrition and
the report on Ernst & Youngs study retirement.
Manpower Demand and Supply Study for
Oil and Gas sector, conducted in 2009, I n the downstream sector, the refining
provides an assessment of the manpower and petrochemical sectors are likely
demand for critical skill sets across the to require around 6,000 and 2,700
countrys oil and gas value chain and the professionals, respectively. The
corresponding supply of such resources. refining and petrochemical sectors
Key findings of the study include: are witnessing substantial capacity
additions that are translating into
Indias oil and gas sector is likely to significant manpower requirements.
require around 25,000 additional
professionals in the next five C
GD is projected to require around
years due to business growth and 4,500 people in the next five years
retirement or attrition in the sector. due to exponential growth in pipeline
This is equivalent to around 48% of infrastructure and the network, while
the current employee strength. the marketing sector is expected to
need close to 3,600 people.
C
ore (technical) functions are likely to
account for around 80% of required
manpower.
Key HR
Manpower projections for the oil and gas not expected to manage offsetting
industry predict a substantial demand impending manpower requirements.
for oil and gas professionals over the Existing academic institutes are not
challenges
next five years. The sector needs to sufficient to ensure industry stability
tide over the challenges of attraction in terms of manpower supply. The
and retention efficiently to support gap between the demand for trained
current operations and execute planned manpower and its supply is widening
growth. One of the common challenges annually. Some of the key issues include
all sectors within the oil and gas value an aging workforce, retirement, attrition,
chain currently face is planning for the and talent acquisition and supply.
sustained availability of a competent
workforce. Although technological
development has garnered benefits that 3.1 Aging workforce
have allowed oil and gas companies
Largely in line with the global trend, the
to reduce manpower requirements,
average age of workforce employed in
future technological advancement is
the Indian oil and gas sector is high. This
Global HR
Talent shortage has become a critical the principles of oil economics, with
challenge for the oil and gas industry at sharp increases in prices followed by
a global level. The challenges are largely rapid declines. This made it one of the
challenges
similar to those prevalent in India due most volatile industries to be employed
to variations in employment within the in. A massive recruitment drive due to
industry. The significant variation in increased production typically followed
employment figures for the industry is sharp increases and, subsequently,
a result of the intrinsic boom and bust a decline in oil demand resulted in
cycles that have afflicted the industry. substantial layoffs. Thus, employment
Globally, companies have struggled to in the oil and gas sector has largely
recruit, retain and develop sufficient followed crude oil price trends and
manpower to sustain operations. lags behind the price peaks illustrated
Manpower deficits are leading to in Exhibit 3. The industry has also
project delays and cost overruns, and not managed to preempt trends and
this problem is more serious in the take corrective action, as it is difficult
upstream sector. The following sections to predict oil and gas prices. Several
detail some of the issues the industry is factors, including the state of the
currently contending with in the global economy and a number of geopolitical
context: factors, are responsible for price
fluctuations.
50%
100%
80%
10%
Oil and gas employment
60%
Oil price
40% 5%
20%
0% 0
-20%
-40% -5%
EYIN1010-120
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