Shortage of skills puts brakes on oil, gas bonanza

A shortage of trained oil and gas workers in East Africa is slowing development of large, newly discovered fields and might force governments to relax rules that force companies to employ local people.

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

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

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

"I certainly foresee a situation in which East African governments have to relax their local-content rules around employment and contractors, certainly in the early stages of development of hydrocarbon resources."

But any move to weaken laws requiring energy companies to hire a set percentage of locals could prove to be a political hot potato and 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 cheaper and help them gain political capital.

"As you would expect, getting a skilled workforce is challenging, especially for the highly technical well engineering for oil and gas fields," said Martin Mbogo, manager for Tullow Oil in Kenya. Tullow plans commercial production in Uganda and struck oil in Kenya in March.

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

Hakim Muwonge, a partner in a Kampala law firm, said oil businesses routinely got around the rules by using local businesses.

"Or they employ locals in the simplest of tasks such as driving," Muwonge said.

Uganda and Tanzania pay for workers to study at Western universities, where training can take several years and cost more than $100000 a worker, a significant amount in a region where nearly half the people live on less than $1 a day.

Uganda says its own 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 training.