Education and Training for the Oil and Gas Industry: Case Studies in Partnership and Collaboration

Education and Training for the Oil and Gas Industry

Case Studies in Partnership and Collaboration

VOLUME 1

Jim Playfoot

Phil Andrews

Table of Contents

Cover image

Title page

Copyright

Acknowledgements

Dedication

Preface

About Getenergy

About the Authors

The Case Studies

Case Study 1. ENI, Mattei and Boldrini: A Radical Response to the Challenges of Developing International Energy Expertise

The Motivation

The Context

The Solution

The Impact

What Made the Partnership Successful?

The Challenges

The Cost

Case Study 2. The University of Trinidad and Tobago: A University Designed and Built in Partnership with Industry

The Motivation

The Context

The Solution

The Impact

What Made the Partnership Successful?

The Challenges

The Cost

Case Study 3. exploHUB: Developing the Next Generation of Energy Explorers

The Motivation

The Context

The Solution

The Impact

What Made the Partnership Successful?

The Challenges

The Cost

Case Study 4. Australian Centre for Energy and Process Training (ACEPT): A State-Funded Training Facility Built on Industry Partnerships

The Motivation

The Context

The Solution

ACEPT Partnership 1: Remote Access Training

ACEPT Partnership 2: The Shell FLNG Project

ACEPT Partnership 3: Women in Engineering Programme

ACEPT Partnership 4: Gorgon Entry Skills Training PROGRAMME

The Impact

What Made the Partnerships Successful?

The Challenges

The Cost

Case Study 5. Takoradi Polytechnic and the Ghanaian Energy Industry: An Education/Industry Partnership to Build an Energy Workforce for Ghana

The Motivation

The Context

The Solution

The Impact

What Made the Partnership Successful?

The Challenges

The Cost

Case Study 6. NorTex Petroleum Cluster: An Industry/Academic Partnership to Develop the Energy Professionals of the Future

The Motivation

The Context

The Solution

The Impact

What Made the Partnership Successful?

The Challenges

The Cost

Case Study 7. Penspen and Northumbria University: A Partnership to Develop the Next Generation of Pipeline Engineers

The Motivation

The Context

The Solution

The Impact

What Made the Partnership Successful?

The Challenges

The Cost

Case Study 8. ShaleNET: A Partnership to Develop Entry-Level Candidates for the Marcellus Shale Play

The Motivation

The Context

The Solution

The Impact

What Made the Partnership Successful?

The Challenges

The Cost

End Note

Index

Copyright

Elsevier

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Acknowledgements

We would like to thank the team that has helped us produce this book:

• Louise Hutchings, John Fedor and Cathy Sether at Elsevier for their support.

• Getenergy’s Co-Founder Peter Mackenzie Smith who read and reviewed these pages.

• The Getenergy team in London: Helen Jones, Christina Westlake, Jack Pegram, Richard Bentley, Richard Harmon, Andy Matthews and Frankie Carlin.

We would also like to extend profound thanks all the contributors who have given up their time and shared their stories with us.

Dedication

Phil and Jim dedicate this book to their families.

Emma, Lily and Alfie Andrews; and Jules, William and Iris.

Preface

Welcome to the first book in the Getenergy Series. In a decade of working at the nexus of education and training and the oil and gas industry, we believe that the time has come for an advanced level of mutual understanding and collaboration around the challenges we face. To that end, we have compiled a set of eight case studies that explore and illuminate the interactions between three seemingly very different and often complex subject areas:

Energy—Education—Economy

We believe that a greater understanding of how these subjects interact will make the business of extracting hydrocarbon resources in developing countries better for the citizens of those countries. We think that this will, in turn, be better for the companies doing the extraction, better for the governments who license the exploration blocks in the first place and better for the national companies and their supply chains.

Countries with oil and gas resources but without the expertise or experience to develop and produce them must necessarily rely on foreign companies to undertake the complex and often challenging task of exploiting those resources.

Depending on the prevailing oil or gas price, this arrangement can produce significant profits for the foreign oil and gas companies and potentially vast financial resources for the government of the country concerned. However, over the last decade it has become increasingly evident that those government treasury receipts are not, in themselves, enough to satisfy the aspirations of the citizens in these countries. Governments all too easily absorb money. Its distribution via policy initiatives, infrastructure investments, tax breaks and, in the case of some wealthier states, loans, homes and other financial benefits for national citizens, does not appear to create the sustainable economic growth (the entrepreneurship, jobs, supply chains, diverse industries and a knowledge base) from which economies generally evolve. Most of the world’s emergent hydrocarbon economies are still largely reliant on foreign-led production of oil and gas.

It could be argued that the economic dividend enjoyed by hydrocarbon-rich governments can have a negative impact on sustainable economic growth (at the core of the Resource Curse). In many cases this situation can lead to a political system which becomes dependent on high levels of oil and gas receipts in order simply to function—let alone support the aspirations of citizens—and it can drive up inflation, making some parts of the country concerned unaffordable for those who live there.

In turn this leads to a critical challenge for ministers, policy-makers and civil servants. Should governments allow foreign companies to operate with impunity in their country, using foreign workers, paying lip service to local content legislation or finding loopholes in it, and seek only to collect rising oil and gas receipts? Or should these governments operate on the principle that oil and gas resources should contribute to a country’s ability to take control of the exploration, production and supply chain of a national energy industry and accept that this will take many years of targeted investment, policy and regulation to reduce foreign ownership and control? Or is it best to take the path in between?

The last option is, perhaps, the least desirable. It leads to ineffective policies, gives more power than is desirable to the foreign companies who will always seek the shortest route to profitability, it supports the pursuit of shareholder value above all else and renders ineffective the regulations created to keep control of sovereign natural resources. This is really just another path to dependency, which is prone to the diversionary tactics embodied in some Corporate Social Responsibility (CSR) activities of major firms. CSR activities are, at best, well meaning and there are limited examples that are to be admired. However, they are never going to be a sufficient method of achieving national education reform goals.

So let us examine an alternative approach which might mean emergent oil/gas nations maintain control of their industry whilst supporting foreign direct investment. It is founded on three Es—Energy, Education and Economy.

The first E—Energy—the source of finance with the greatest potential to assist countries in meeting the aspirations of their citizens.

• Hydrocarbons and their associated distillates remain the energy source on which the world depends. The industrial revolution was entrenched by these resources and, in 2014, the economies of most countries in the world are utterly reliant as consumers or producers (or both) of oil and gas.

• The oil and gas industry itself is dependent on geology, geography, many competent and trained people and technology. Where significant reserves of oil and gas are discovered in emergent energy nations, they typically become the principal source of Government revenue. The result is that oil and gas investments represent the main source of finance to support the kind of education system reform needed to produce people to run that industry in the first place, and build economic diversity in the second.

• In many producing nations, the international oil, gas and contracting industry is normally required to locate and train local staff close to operational sites. Although companies are sometimes forced into compliance with this by legislation and access rights, it also makes economic sense if properly implemented by oil and gas companies and their suppliers. The true cost of skilled expatriate labour vastly outweighs the cost of developing and employing local staff. Strong local management is likely to lead to greater stability, sustainability and productivity, particularly when the investments run over a 25–40  year period and must withstand the influences of successive governments whose political and fiscal agendas may vary from one to another.

• Given the requirement for trained people, the value of oil and gas to an economy and the geographical dependence of operations, the oil and gas industry can be a powerful funding source for education reform where it is most urgently needed—in the producing countries. However, the motivations of international oil and gas companies and their national counterparts (national oil companies or ‘NOCs’ and Governments) have tended to focus on the deal to be done, rather than on the citizens whose aspirations should be part of the development of a national, sovereign resource.

• As the relationships between NOCs and international oil companies evolve, there is greater emphasis on developing an effective local content policy and on defining what constitutes a license to operate. However, the mechanisms do not currently exist to translate policy and commitments by operators into an enhanced local education system able to develop citizens with the skills the industry needs today and the economy will need tomorrow.

• There is evidence in several countries that the status quo ante is no longer sustainable. Meeting the aspirations of citizens in terms of economic opportunity and access to education is a critical aspect of social cohesion. Failure to do this can contribute to significant civil unrest which, in itself, can further depress economic growth. A new approach is needed if stability and growth are to replace conflict and poverty of opportunity amongst populations in oil and gas rich countries.

The Second E—Education—the source of people who will create sustainable economic development.

• Strengthening, reforming and improving national education systems is a mammoth task. It is one in which few are experienced; it is politically fraught and is an area that international oil and gas companies would rather avoid. And yet it remains one of the greatest challenges to the continued growth and stability of the global energy industry. Finding skilled and competent workers who are local to exploration and production operations is not going to be achieved without massive investment in training and education. In this endevour, we believe that a major part of the solution lies in the global education industry, which is many times larger by income, government participation and employment, than the oil and gas industry.

• During the last 50  years, developed countries have seen an explosion in the number of foreign students coming to study at established universities and, to a lesser degree, further education colleges. The market in international education is huge and driven primarily by the desire of students from countries whose own institutions are believed to be inadequate to gain a better education and, with it, increase their employment prospects. The English-speaking world has historically had a distinct advantage in this area underpinned by the role English language plays in international business, finance and information technology.

• Efforts by education providers to increase their share of the international market for education by creating branches in other countries have met with mixed success both for students and for the institution concerned. What is more, there is increasing scepticism amongst students towards the fly-in, fly-out model adopted by some established institutions, particularly in Africa. The idea that models of education can be merely exported as is has come under scrutiny with a recognition that institutions need to function effectively within their own specific context.

• The market in foreign study can undermine the national education system of the student’s home country. Where scholarships are involved, the brightest students are often the ones selected to leave. Where parents pay, it is the privileged few who undertake overseas study. The corollary of this is that the national universities and colleges must teach those who are left. This weakens the talent pool, impacts on the quality of research and development which an institution can undertake and finally takes much needed cash away from those institutions. Reputational damage is also a consideration. The promulgation of the idea that a good education comes from overseas can play to the aspirations of students and parents and drives future teachers, students, researchers and economic contributors away from where they are most needed. Many do not return.

• In recent years Western institutions’ reliance on state funding has been severely tested. In the UK and Canada, to