Developing local talent in Africa

A look at the increasing trend towards demand for hiring and developing local talent in the face of limited supply and how different companies and governments are approaching the challenge.

Recent years have seen the upstream E&P sector grow rapidly in Africa, with a number of nations in the continent
discovering oil and gas reserves. The discoveries in the likes of Kenya, Uganda, Mozambique, and the ongoing extraction in well- established nations such as Nigeria, led a host of oil companies to make their way to Africa.

Just about every potential hydrocarbon basin across Africa is the subject of investor interest and major, super majors and large independent oil and gas companies have been rapidly expanding in the region. The discovery of these natural resources and the development of a strong oil and gas industry has been of significant benefit to the people and governments of these nations.

The growth of the E&P sector has not been easy in recent years and operating in Africa comes with a number of significant challenges. Political instability, the risk of violence, as was witnessed in South Sudan and the Central African Republic recently, and the climate conditions all provide challenges.

However, a new challenge has emerged for oil and gas companies in recent years, in the shape of a lack of local expertise and talent. In Nigeria, which has been part of the oil production industry for over five decades, the level of Nigerian manpower is still only at 40 per cent. There are a wide range of reasons this trend has developed, as multinational oil companies have traditionally favoured expatriate workers, who can come into the situation with a career filled with experience and technical knowledge.

Many governments across Africa would like their nation’s natural resources to have as big an impact on their own economy as possible. This means using local talent, locally made machinery and equipment and even allowing companies from their own nation to take responsibility for the discovery and extraction of resources from the ground.

A number of nations have introduced expatriate quotas, which requires oil and gas organisations to employ local people within their organisations, however many of these systems are vulnerable to abuse.

However, organisations looking to operate successfully within Africa have realised that they need to contribute to infrastructure, training and education within the countries they operate in. It is hoped that investing in these areas will see a rise in local talent capable of filling the roles major companies create in Africa.

In many African nations the education system has not been working effectively. It has become fiercely politicised and higher education institutions are not providing graduates of the required quality to fit into the petroleum industry. Africa needs stakeholders to address the teaching and research infrastructure within the continent and the separate nations in it, which is where corporations have come into the equation. In a recent oil and gas roundtable in Lagos hosted by Cripps Sears & Partners, a leading energy and natural resources executive search firm, there was some suggestion that having an oil and gas advisor to national governments would help them understand the challenges the industry faces in its attempts to reduce expatriate numbers whilst increasing production, this may create an aligned and more productive environment for promoting indigenous staff programmes.

Investing in education and training

Organisations have been investing heavily in education and training, donating equipment and facilities. Shell has supported with infrastructure investment in Nigeria for several decades and is heavily relied upon. Keith Hill, chief executive of Africa Oil, recently told How We Made It In Africa that his company is investing a significant amount in this area in Kenya.

He said strengthening the universities in the region is a major aim, as currently the company sends potential employees abroad to learn the necessary skills and expertise required to work in the industry, but that getting people to come back after training is a big issue.

“When you send people overseas they don’t always come back. One of the things we are also looking at is strengthening universities here. There is very strong education system here… what we need to do is strengthen those to be more specifically tailored to the oil industry; such as petroleum engineers, geologists, geophysicists, people that are not normally trained at the universities,” he told the news provider.

The company has also dedicated itself to investing in vocational training for welders, pipe fitters, electricians and other skilled labourers drawn from local communities. He said: “Eventually we want to replace all of our people with local people. Our goal is to have little or no foreigners coming here and working. Local people will be more motivated to make this a successful project because they have a vested interest in the country.”

In Nigeria, PEM Offshore Limited recently signed a multi-million dollar contract with Kongsberg Maritime for the supply of a full suite of offshore anchor handling, dynamic positioning, power management and crane simulation systems, which will be used as the main infrastructure for a world-class offshore simulation training centre and the first of its kind in Nigeria and West Africa.

The centre, which will be located in Lagos, will support the training of local personnel involved in oil and gas operations, indicating the wider drive for a move towards local talent in Africa to appeal to governments that want to see more local people involved in the procedure.

China Petroleum & Chemical Corp, which is more commonly known as Sinopec, has also been making strides to contribute to infrastructure and education in the areas it operates. Since its purchase of Addax Petroleum, which operates assets in Nigeria, Gabon, Cameroon, Nigeria and São Tomé and Principe, Sinopec has retained most of the positions held by local staff.

Employees were also sent to China for further training and to experience the home culture of the company, in order to foster a better working relationship. Company staff often go to the local schools to donate school bags, stationery and footballs. The company has donated more than US$6.58mn in Africa in recent years, as well as recruiting more local employees to raise their incomes and cultivate a talent pool of professionals in Africa.

Africa is one of the most resource rich regions in the world and remains an incredibly attractive investment target for those companies involved in the oil and gas industry. The way in which companies can invest and operate is evolving. Governments want their own population to be put to work and local communities benefitting from the activities of the exploration and production sector. As Africa’s middle class grows, local education is improving and International University attendance is on the up, there is a noticeable increase in talented and educated local employees being given opportunities and promoted to managerial positions. Even with this trend, demand for this type of profile remains incredibly high and in short supply creating its own challenges in staff retention. The oil and gas sector faces the threat of a global skills and experience shortage. There is a significant amount or experienced staff reaching retirement age with a limited pipeline of replacements available. The emphasis on training a local work force creates a long term solution to the future of the industry and will be simultaneously beneficial to the national economies. There remains significant challenge to the industry in recruiting, developing and retaining local members of staff but the fact that these issues have been highlighted and are being addressed is a big stride in the right direction.