East Africa hobbled by shortage of skilled oil workers

Tue Oct 30, 2012 10:05am EDT

Related Topics

* Govts require companies to hire local staff

* Uganda, Tanzania pay for people to study abroad

* Kenya wants training at domestic universities

By Drazen Jorgic

NAIROBI, Oct 30 (Reuters) - A shortage of trained oil and gas workers in East Africa is slowing development of new fields following a series of major discoveries and may force governments to relax rules requiring companies to employ local people.

Governments are now investing in programmes to train skilled oil and gas workers, but they are hampered by weak education systems and the high costs involved.

Rolake Akinkugbe, head of energy research at Ecobank, said it would take at least 10 years of training programmes to make a lasting impact on employment in the oil and gas industries in the region.

"It's a major problem and it will take time to solve," she said.

"I certainly foresee a situation where the east African governments might have to relax their local content rules around employment and contractors, certainly in the early stages of development of hydrocarbons resources."

But any move to weaken laws requiring energy companies to hire a certain percentage of local staff could prove to be a political hot potato as well as reduce the industry's potential benefits to the region's economies and workforces.

If given a choice, foreign companies would prefer to hire local staff because they are substantially cheaper and help them gain political capital.

"As you would expect, getting a skilled workforce is challenging, especially for the highly technical oil and gas fields like well engineering," said Martin Mbogo, country manager for British Africa-focused explorer Tullow Oil Tullow in Kenya. Tullow plans commercial production in Uganda and announced in March that it had struck oil in Kenya.

Global oil and gas producer BG Group, which in March announced a vast gas find in Tanzania, has said two-thirds of its 75 member staff in the country are expatriates.

TRAIN ABROAD OR AT HOME?

Hakim Muwonge, a partner at Kampala-based law firm Kusaasira & Co, said oil businesses routinely get around the rules by using local businesses.

"Or they employ locals in the simplest of tasks such as driving," Muwonge told an oil and gas meeting in Dar es Salaam.

Governments are now instituting different policies to train workers, but all these solutions are costly and slow.

Uganda and Tanzania pay for workers to study in Western universities, where training can take several years and cost over $100,000 per worker, a significant sum in a region where nearly half the inhabitants live on less than $1 a day.

Uganda says its domestic private universities were slow to start oil-related courses because they are expensive.

"The profit motive does not always coincide with uplifting the masses, which is the government's responsibility," Charles Kwesiga, head of Uganda's institute for petroleum studies, said.

The institute has so far paid for 30 Ugandans to study in oil-rich Trinidad and Tobago. Another 60 will follow suit once they have completed basic skills training.

Gas-rich Tanzania is also offering up to 50 scholarships for masters courses abroad under a 2012-16 government plan.

Kenya, by contrast, plans to establish energy-sector university courses at home.

"(We must) establish the need of that sector and then train according to the needs," said Wanjiku Manyara, Nairobi-based head of the Petroleum Institute of east Africa (PIEA).

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