Western Australian Oil & Gas Group Chairman explains how engineers are managing an industry environment where job opportunities are scarce.
Just a few years ago engineering was considered one of Australia’s major skills shortages as industries like oil and gas grew rapidly in the country.
Fast-forward to the second half of 2016 and oil and gas engineers are in survival mode after a downturn in market conditions forced operators and engineering firms to restructure their workforces.
Western Australia (WA) has been hit as hard as any Australian state, with a large portion of the industry’s expansion taking place off its north-west coast or in capital Perth’s corporate offices.
Chairman, Western Australia Oil & Gas Group
The main cause of the dramatic fall in job opportunities is of course due to the fall in the oil price. But as WA Oil & Gas Group Chairman Clinton Smith explained to Rigzone the legacy of the skills shortage lives on and has contributed to the current employment predicament.
“It has been the oil price that has affected [engineers] and we are also suffering from the aftermath of the boom to a certain extent,” Smith, a senior process engineer in Atkins Global’s Australian oil and gas division, said.
“If you were to go back, the boom probably peaked in 2007 just before the GFC (Global Financial Crisis), when oil prices were high – it was very easy to have projects sanctioned, there was a lot of work on and it created a skills shortage in WA. That drove salaries through the roof and we really became an expensive place to do business for a while.”
As a result, Smith continued, a lot of engineering design projects were pushed overseas to lower cost markets, such as India.
Western Australia has become more affordable to do business since the oil price drop. Engineering services have fallen significantly in the state, by 25 percent in some cases, Smith said, while the Australian dollar has dropped substantially against its U.S. counterpart.
However, this has not meant that the outsourced engineering services have returned to Australian shores.
“Australia isn’t quite as expensive to do engineering as it used to be – by the same token I don’t think there is much hope of the design projects coming back any time soon,” Smith said.
Support for Engineers
The WA Oil & Gas Group, which is part of the Engineers Australia industry body, develops, promotes and supports development of the profession.
Smith said the group provides forums for communication between engineers and other stakeholders related to the sector, with much of the discussion currently centered on how the profession can manage the downturn.
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