Skip to main content
Don’t miss our
best deal ever
offer ends july 23
save over $160
Sale ends in
$6
for
6 months
Don’t miss our
best deal ever
$6
for 6 months
save over $160
// //

The United States had its largest increase in oil production last year, and the International Energy Agency has forecast that it will become the world’s biggest producer by 2017, eclipsing Russia and Saudi Arabia.

Eric Gay/The Associated Press

The United States' booming oil sector is seen as the best place to invest among global energy executives, but a growing shortage of skilled labour could put a serious crimp in expansion plans.

In a survey of industry executives to be released Monday, U.K.-based GL Noble Denton, an energy service company, said the industry in the United States can look forward to a "glory year," with record activity despite concerns about tougher regulations and availability of needed workers.

"Our research shows huge confidence in the U.S. oil and gas industry, which is clearly supported by strong growth in the Americas, despite a number of potential barriers," said Arthur Stoddart, the company's executive vice-president for the Americas.

Story continues below advertisement

But as investment in the U.S. oil and gas industry continues to rise, there are are growing doubts the sector can find the employees required to complete all the potential projects.

GL Noble Denton surveyed 428 executives from oil companies and their suppliers from around the world.

While those respondents remain optimistic about the long-term future of their industry, they identified major challenges, including rising costs, lower profit margins, growing regulatory burdens and political risk. Still, more than half said their companies intended to increase capital budgets this year, while only 8 per cent intend to cut back.

In the past few years, the United States has emerged as the top investment prospect for publicly traded energy companies, as much for its political stability as for its vast and economically recoverable reserves of shale gas and light, tight oil.

The United States had its largest increase in oil production last year, and the International Energy Agency has forecast that it will become the world's biggest producer by 2017, eclipsing Russia and Saudi Arabia.

The booming shale gas activity has revolutionized the industry, and driven prices to rock bottom levels where companies are finding it nearly impossible to make money from natural gas production. The same drilling techniques that spawned the gas gale are now driving the boom in tight oil and are having a similar – though less dramatic – impact on North American crude prices.

Despite that price weakness, the global industry views North America generally – and the U.S. specifically – as an inviting place to do business.

Story continues below advertisement

In the survey, 19 per cent of respondents pointed to the United States as the most favourable investment location, followed by Brazil at 13 per cent, Australia at 8 per cent and Canada at 5 per cent. Least attractive were the countries that have huge resource potential but are plagued by instability or corruption, including Nigeria, Iran, Russia and Iraq.

"The U.S. is one of the easiest places to do business – any business," Mr. Stoddart said in an interview from Houston. He said Canada benefits from a similar perception.

"There are still concerns, but there are concerns everywhere, and in the scheme of things, the political, environmental and regulatory regime in the U.S. is not negligible, but it is more manageable than many other places in the world."

But the skills shortage in the industry has become an "acute barrier to growth" both worldwide and especially in North America. Respondents identified it as the No. 1 challenge after ranking it fifth just two years ago.

Mr. Stoddart said the shortage of qualified people is exacerbated by the increasingly stringent demands within the industry, partly as a result of environmental and regulatory challenges.

"It's not so much just getting access to skilled labour, it's that the requirements for competency and demonstration of competency are getting more onerous," he said. "Operators, in order to mitigate their risk, are requiring much more increased vigilance on the competency of all the people in the whole supply chain."

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies