Petroleum Labour Market Information (PetroLMI) Division of Enform

Petroleum Labour Market Information (PetroLMI) Division of Enform

April 20, 2016 15:00 ET

Labour Market Outlook 2016 to 2020 for Canada's Oil and Gas Industry

Modest employment recovery in Canada's oil and gas industry forecasted between 2017 and 2020

CALGARY, ALBERTA--(Marketwired - April 20, 2016) - Canada's oil and gas industry could expect to see some modest recovery between 2017 and 2020 due to renewed industry activity and the need to replace retiring workers, according to the Labour Market Outlook 2016 to 2020 for Canada's Oil and Gas Industry report, released today by PetroLMI, a Division of Enform.

"The industry underwent significant job losses in 2015 due to the rapid decline in oil prices, and that trend is continuing in 2016," says Enform's Carol Howes, Vice President of Communications and PetroLMI. "Based on assumptions that oil prices will start to rise in 2017, some rehiring is expected to begin as capital investment resumes and there is a need to fill positions left vacant by retiring baby boomers."

In 2016, industry employment is expected to contract by up to 24,400 jobs as prices remain low and spending cuts continue. Additionally, companies are not expected to fill positions left vacant by retirees in 2016. Instead, those vacated positions are more likely to be used as a way to reduce workforce numbers and further reduce costs during this period of continued low oil prices.

The Labour Market Outlook 2016 to 2020 for Canada's Oil and Gas Industry provides an overview of workforce requirements by sector, including conventional exploration and production (E&P), oil and gas services, oil sands and pipelines, as well as by key oil and gas operating regions. The report provides a range of labour market projections for the industry based on two scenarios, which include assumptions for oil prices, capital and operating expenditures, and industry activity. In a lower scenario, oil prices remain below US$60 per barrel (/bbl) to 2020 and net hiring requirements(*) for the industry reach 46,435 jobs, assuming historical retirements remain the same. In a higher scenario, oil prices increase to the US$60-$80/bbl range by 2020 and net hiring reaches 55,305 jobs.

This report is accompanied by the Labour Demand Outlook 2016 to 2020 for Saskatchewan's Oil and Gas Industry and Exploring LNG in Canada: Workforce Requirements for Developing and Sustaining Canada's Liquefied Natural Gas Sector.

"Every energy-producing region in Canada has been substantially impacted by the decrease in oil and gas employment," says Howes. "But, as a result of the unique challenges and opportunities in each of these regions and sectors, the impact of the downturn - and, any ramp up once prices do rise - is somewhat different."

Regionally, Alberta, the hub of Canada's oil and gas industry, has been the most impacted by the downturn, witnessing the largest drop in employment. Companies are expected to continue to find opportunities to reduce costs across their operations in Alberta and the rest of Canada in order to survive the downturn. Investing in innovation and technology to drive efficiencies and productivity will be key to increasing profitability in the future, says the report.

In oil-based Saskatchewan, a positive business climate and collaborative relationship between government and industry is expected to position the province well to attract investment once prices do begin to rise. In PetroLMI's lower and higher scenario, by 2020, Saskatchewan's net hiring is projected to reach 3,120 and 3,785, respectively.

Assuming one large liquefied natural gas (LNG) project proceeds in British Columbia (B.C.) and uses gas produced in the province, employment in B.C. is projected to fare better than Canada's other key oil and gas operating regions, recovering to near 2014 levels. Net hiring in B.C. during the forecast period is projected to reach 3,005 in the lower scenario and 3,690 in the higher scenario.

The oil and gas services sector employs the largest workforce in the industry and, out of all the sectors, has been the most impacted by low oil prices. The conventional exploration and production (E&P) and oil sands sectors were also unable to hold on to workers. However, the oil sands sector is expected to see some job growth through the forecast period due to the ongoing construction of late-stage projects. Meanwhile, with proposed pipeline project approvals remaining elusive, companies in that sector also restructured and laid off employees. Some pipeline companies may make further cuts to their workforce. However, the overall employment outlook to 2020 for the sector is stable, provided projects currently planned are not deferred or cancelled.

"It's important to note that, while the industry will regain jobs from 2017 to 2020, the oil price, capital investment and employment in the industry as a whole will not recover to 2014 levels," cautions Cameron MacGillivray, President and Chief Executive Officer (CEO) of Enform. "That being said, the loss of talent to other industries in Canada may have a significant impact on the oil and gas industry's ability to attract and retain a skilled labour force once activity does ramp up."

"The oil and gas industry will need to continue to find ways to attract the best and brightest Canada has to offer to maintain its competitiveness in the new cost-driven, technology-seeking environment we find ourselves in," adds Howes.

The Labour Market Outlook 2016 to 2020 for Canada's Oil and Gas Industry report will be updated towards the end of the year to reflect 2016 changes to the oil and gas industry's spending and production assumptions.

PetroLMI's labour market reports are available, for free, at careersinoilandgas.com.

The reports are funded by the Government of Canada's Sectorial Initiatives Program, the Canadian Association of Petroleum Producers (CAPP) and the Government of Saskatchewan.

The Petroleum Labour Market Information (PetroLMI) Division of Enform (formerly the Petroleum Human Resources Council) is a leading resource for labour market information and trends in the Canadian petroleum industry. PetroLMI specializes in providing petroleum labour market data, analysis and insights, as well as occupation profiles and other resources for workforce and career planning.

(*) Sum of job openings created due to industry activity plus age-related attrition.

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