The EU labour model – an international ideal?

Imagine a world where employees can move seamlessly from country to country. Where organisations can recruit the best people for the job, regardless of where they’re from. This ideal is becoming a reality within the EU, where residents of member states are normally free to travel from place to place. This would be a perfect model for the energy industry, which faces a plethora of ongoing challenges. Yet conflicting political and commercial agendas means this may only ever remain a dream.

Resourcing makes the oil and gas world go round

As large oil and gas projects take place across several continents over many years, it’s essential for highly skilled experts to move freely around the world. Political limitations complicate matters for energy companies forced to deal with varying environmental, tax and immigration challenges. Inconveniently, commercial objectives of completing oil and gas projects within a specific time frame and budget rarely fit in with national agendas.

Amid an uncertain political landscape, there’s one certainty; oil will sustain itself and prices will remain high for the medium to long term. With the industry promising continued worldwide growth, it’s more important than ever for governments to support free movement of an essential but finite number of staff. Currently, political limitations and differing tax rates mean energy companies are closely confined, making projects more costly and lengthy. More stable tax structures and a greater understanding of salary variations across the globe would help make energy companies be more resourceful and efficient. But in truth, political agendas are sure to always conflict with commercial objectives.

From global to local

A more localised challenge concerns rates of pay. Developing countries are often understandably sensitive over the perceived high cost of specialist expatriates brought in to host countries. For this reason, it is common to favour local candidates in an attempt to keep costs down. However, the local workforce doesn’t necessarily have the same level of skills and experience as experts from elsewhere. What’s more, an over-reliance on lower paid, less-skilled workers could cause projects to overrun and cost more. Compromise is key to completing projects to a high standard within a specific timeframe. Energy experts, wherever they may come from, are indispensible to successful execution. Plus, by imparting their experience to local teams, less developed economies can become more self-sufficient in the longer term.

One size fits all?

The chance of translating an EU-style model on a global scale is slim. Energy companies constantly have to adjust their operations to adhere to political agendas and different legislations from one land to the next. For years, these hurdles have been the norm for the oil and gas industry. Perhaps now, it’s time for governments to make allowances for the economy-boosting energy industry to meet them halfway.

John Richards, CEO, Mentor IMC Group.

This article appeared in Upstream Magazine, March 2010