PUBLISHED IN The Edmonton Sun AND The Lloydminster Meridian Booster
Drilling rig contractors are the first to feel the manpower pinch whenever oil and gas investment swings into action. ‘Making hole’ – as rig crews call their drilling work – is a labour intensive operation. Three 5-man crews plus a rig manager are needed to run one rig. And a drilling rig only prepares a hole. A service rig, with its own 4-man crew and rig manager, is brought in afterward to turn that hole into a producing well.
In 2006, the high point of boom activity, rigs drilled over 22,000 wells. By 2009, drilling contracts had become increasingly scarce. Only 9000 wells were drilled. What that decline looked like for many of the rig crews: it was the year of the ‘last well.’ After closing up for a rig move, rigs were pulled not to another job site but to a contractors’ yard.
This year, investors are showing renewed interest in Alberta’s oil and gas opportunities. Land sales are the earliest indicator of upcoming drilling activity, and recent land sales suggest that those racked rigs will be needed again. Over 2010, Alberta’s land sales generated 1.486 billion dollars, twice the dollar generated through 2009.
The equipment, parked in locations across the province, is ready for the activity surge. The crews, on the other hand, are scattered, across western Canada and now working in other industries. The recent drought in activity whittled this workforce to a fraction of what it had been. Industry isn’t projecting enough activity in the near term to require all of western Canada’s 800 drilling rigs. But to meet manpower demands to operate even half of the fleet - the projection for early 2011 - the workforce must grow by thousands.
It's a tremendous task, but for drilling and service rig companies, attraction and attrition aren’t obstacles newly created from the recent global downturn. These manpower issues are inherent to the industry. The ups and downs of commodity pricing drastically shift rig activity and manpower needs year to year and even season to season.
It is because manpower is a recurring challenge that rig companies undertook an ambitious task several years ago: developing formal training certifications for occupations on drilling and service rigs. These objectives coincided with the frantic pace of escalating activity that marked that last boom. Even though industry ran full throttle just keeping up with the frantic pace of drilling, companies made it a high priority to collaborate on the development of the new training standards.
Unique skill sets are needed to operate a drilling rig or service rig. These new training standards give employees a consistent training tool to advance their professional development and identify past experience. The industry rolled out two programs between 2004 and 2005: drilling rig companies worked with apprenticeship training divisions in Alberta, Saskatchewan and BC to establish the Rig Technician trade. Service rig companies built a Service Rig Competency Program (SRCP). Both the trade and SRCP focus on on-the-job training standards. The difference between the two programs lies in administration: the Rig Technician trade is administered through provincial apprenticeship divisions, and requires a classroom component offered by post-secondary institutions. SRCRP is administered out of an industry-funded training service, Enform.
As is the way after any boom/bust cycle, not all of these experienced crewmembers will make their way back to rig work. But the industry is confident that the recent training investment will also help on the recruiting front. Employees newly joining the industry now have an outline of a defined career path and clear picture of the skills they need to develop. The training standards are also safety resources. They will help the new workforce adapt to the learning curve in a fast-paced work environment.
Success in the coming months hinges on two very different parts of the industry rising to the challenge. Personnel departments are hard at work rebuilding the lean workforce. Rig crews are adopting a heightened safety focus on rigs where new employees are in training and returning employees are sharpening their skills.
Opportunities are on the horizon both for new workers who want to develop these skills and returning workers who have these skills. The equipment is available to drill, and investment is on the rise. While recruiters buckle down to plug the holes in the labour force, the message is clear: ‘making hole’ is making a comeback.