Oil and gas assets in North America are hot commodities, but they are not the top priority market for future international investment, according to a survey released this month by the Bank of Scotland.
Africa leads the list of priority markets for future international investment for a group of 100 U.K. oil and gas companies participating in the survey. Just more than one-fifth, or 21%, of the companies said they are targeting growth in Africa. Promising frontier areas are sprouting in many areas across the African continent and offshore Africa. These include the relatively underexplored acreage offshore Mozambique and Tanzania to offshore Angola and Ghana, where hopes are high for oil finds.
But the survey, conducted by the BDRC Continental research consultancy, showed that the Middle East and North America were not too far behind, with 18% and 17%, respectively, according to a news release about the findings.
International expansion was deemed a priority by 64% of those asked, the release said. Of the E&P companies participating, nearly half, or 46%, said they were already planning for growth in foreign markets in the next two years. The results also showed that 42% of those surveyed believe new international growth markets provide the biggest opportunity for the industry.
It should come as no surprise that U.K. companies see opportunities worldwide and have plans to pursue them. It’s a trend that Stuart White, commercial area director for the Bank of Scotland, expects to continue.
“The results also demonstrate the global nature of the industry as more firms look to expand internationally and tap into the markets with the largest levels of recoverable reserves,” White said in the release. “With 44% of income already generated internationally, this is not a new trend and reflects the reach U.K. firms have as the industry benefits from the expertise gained in the challenging North Sea environment.
“Our client base mirrors this trend,” he continued. “We have seen a significant increase in our support to the industry in recent years to facilitate international expansion, and we expect this trend to continue.”
The survey also predicted a bright outlook for employment—the possibility of up to 39,000 new jobs created by the oil and gas sector in the U.K. during the next two years. This figure is up by 5,000 from last year.
However, despite the prospect of thousands of new jobs, concerns about a shortage of skills in the talent pool lingers. The survey showed that 38% of the respondents, up from 33% in 2013, named a skills shortage as the greatest challenge they will face. Engineering companies were worried the most at 87%, compared to E&P companies at 20%, according to the release.
White pointed out that “positive action is underway to address this shortfall, with new partnerships between higher education institutions and industry as well as the creation of new specialist apprenticeship schemes.”
But the U.K. isn’t the only region that is seeking solutions to anticipated skills and labor shortage problems. It’s a global concern, including in the U.S. where retirements are expected to rise as baby boomers leave the workforce taking decades’ worth of experience with them.
Having a game plan to keep workers where they are most needed is something that not only oil and gas companies should plan for; governments that are reliant on the energy sector to add money to their coffers should be part of finding solutions as well.
Contact the author, Velda Addison, at firstname.lastname@example.org.