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How is the Oil Industry Contributing to Local Training?

Contributor: Oil & Gas IQ
Posted: 04/22/2010
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Corporate social responsibility (CSR) is increasingly important in today's society.

Rod Lohin, of the Rotman School of Management at the University of Toronto, has stressed that engaging in CSR is vital because businesses are based on trust and foresight.


"Establishing and keeping trust with customers, communities and regulators isn't simple and can be easily damaged or lost," he said.

"To be successful in the long-term, companies need to think beyond what's affecting them today to what's going to happen tomorrow.

"This isn't just about addressing changes to technology or the needs of customers, but also taking into account alterations in social, environmental and governance issues," Lohin added.

One of the important aspects of CSR for the oil industry is training local people. So what are the major companies doing to make sure that workers in the countries in which drilling and production is taking place are capable of doing the job?



Shell's Training Efforts

Shell uses local contractors and suppliers and hires local staff to create benefits for and build trust in the places where it operations.

This directly contributes to the economy in these areas, creates jobs and develops skills. In 2008, the company spent an estimated $19 billion (£12.4 billion) with locally-owned companies in developing countries.

Shell has programmes to attract and train local workers in more than 90 per cent of the low and medium-income nations in which it operates. These programmes include recruiting efforts, and education and skill-building initiatives.

Most of them have been implemented by Shell on a voluntary basis, although some are required by governments which have also recognised the need to make the most of foreign companies coming in and exploiting resources.

The firm has managed to localise the majority of the workforce at many operations through early planning and training. The sheer number of workers needed often means it is in a company like Shell's best interests to hire locally. Even in places that initially lacked technical and commercial skills, the firm has managed to build up a workforce.

BP's Gap Analysis and Development Plan

BP is another company that aims to use local suppliers, saying that it makes sense to do this wherever possible as it "minimises costs and enables [them] to form strong relationships with vendors."

Similar to Shell, the company confirms that work often has to be done to help local organisations reach the standards required to operate safely and effectively.

"We undertake programmes to help companies become suppliers and this provides skills that they can also use on other contracts as well as generally lifting levels of capability and promoting development in the local economy," the company reports.

In Trinidad & Tobago, BP's approach has led to the creation of a new local industry in fabricating offshore gas platforms. Up until the start of the new millennium, oil and gas platforms were built elsewhere, but over the past decade the company has formed ventures to handle design and construction, employing and training local people.

Meanwhile, in Azerbaijan, BP's Enterprise Development and Training Program (EDTP) provides local firms with a gap analysis to show where they need to develop skills and capability, then draws a tailored development plan to fill the gaps.

The initiative has resulted in contracts worth around $42 million being awarded to EDTP clients since its launch in 2007.

Contributor: Oil & Gas IQ