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Signs of hope: modest recovery expected in oil sector

March 24, 2021   by Canada News Wire




Canada’s oil and gas industry workforce can expect to see some further contraction in 2021 but modest employment growth will follow over 2022 and 2023, says a labour market outlook released today by the PetroLMI Division of Energy Safety Canada.

According to the forecast, the industry’s direct employment is projected to rise to about 176,000 by 2023 surpassing 2020 levels but falling short of the 2019 employment level of 188,800 workers.

“A strong energy industry will be an important component of Canada’s recovery from COVID-19, and we are starting to see some renewed activity,” says Carol Howes, vice president of communication and PetroLMI, Energy Safety Canada. “We expect to see slight increases in capital spending in 2021. Through mergers and acquisitions, we have already seen several layoffs in 2021 and it’s expected there will be more workforce adjustments in the months ahead. However, we will see employment beginning to recover in 2022.”

The oil and gas industry will need about 19,800 net new workers by 2023 — 7,800 positions due to industry activity and almost 12,000 replacement roles for those who are eligible to retire, assuming traditional retirement rates are to occur, says the research.

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The combined events of the past year — demand shock from the COVID-19 global pandemic and an oversupplied oil market — led Canadian companies across all oil and gas sub-sectors to take swift action to adjust their strategies. The events only accelerated the pace of change for an industry already in transition and had a significant impact on the industry and its workforce.

Increasingly, companies are focusing on profitability over production to unlock value, says the research. This, combined with the cumulative impacts of the economic downturn that started in 2014, has created a smaller oil and gas workforce (down 26 per cent, or 58,700 jobs, in 2020 from its peak seven years ago) – and one that is not likely to recover to 2014 levels.

“Navigating change is not new for Canada’s oil and gas industry,” says Howes. “Even the most turbulent of times can set the conditions to emerge stronger.”

The oil and gas services and E&P sub-sectors are expected to see some of the largest gains in net hiring with about 13,000 jobs and 6,900 jobs, respectively, over the forecast period, driven by LNG development, improving commodity prices and some stabilization from the federal government’s injection of $1.7 billion into a program to address inactive oil and gas well sites. Due to industry consolidation and uncertainty, employment in the oil sands and pipelines sub-sectors is expected to stabilize but not fully recover during the forecast period.

“While some of these gains are encouraging, it is important to remember this follows a long downturn and the COVID-19 pandemic during which industry employment has contracted substantially,” says Howes. “With the magnitude of the downsizing since 2014, the industry will be challenged to attract workers back, particularly in the oil and gas services sub-sector – which is starting to experience skills gaps.”

The energy industry workforce will emerge smaller and look quite different. Roles in some traditional oil and gas sub-sectors are disappearing and changing with the application of new technologies. As the industry looks to low-carbon solutions and ways to diversify and expand beyond the traditional areas of oil and gas production, there will be new opportunities for workers in energy-adjacent sectors — like renewables, carbon capture utilization and storage as well as biofuels. Canada’s oil and gas workforce have the skills required to extract, develop, produce, process and export oil and gas which are transferable to other energy sectors, says the research.

The data and information from PetroLMI’s Labour Market Outlook is available online, including a breakdown of hiring requirements and top occupations by industry sub-sector; and the ability to filter data by region, sub-sector and occupation. There is also a summary report – Labour Market Outlook 2021 to 2023: Canada’s Oil and Gas Industry

(Newswire)


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