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Help wanted in China’s energy sector

Jared Anderson | Breaking Energy

China’s race to meet rapidly rising energy demand is driving a scramble to find experienced talent to staff its booming energy sector.

China is among the world’s top ten producers of oil and gas, and is the world’s largest coal producer, according to BP’s latest Statistical Review of World Energy. And an Energy Information Administration study published last year indicates that China is second only to the US in shale gas resources, while for shale oil it comes in third, behind the US and Russia.

China is also a global leader in renewables consumption, with ambitious projections for continued investment – up to $300 billion over the 2010-15 period, according to the Council on Foreign Relations. “With the clean energy direction in China, we do see more growth opportunities for the Power & Water business, including gas turbines, renewables, distributed power etc,” GE Power Generation China’s Human Resources Manager Adela Yang told Breaking Energy in an e-mail.

And the country’s energy demand is rising at a blistering pace. The EIA notes that it became the world’s largest energy consumer in 2010, and expects China to surpass the US as the largest net oil importer this year. China has every reason to expend enormous effort bringing its as-yet untapped energy resources to market.

But ambitious energy projects require adequate cadres of skilled workers. And beyond rising demand, Chinese energy projects – like energy projects worldwide – are facing the Great Crew Change, a pending exodus of older and more experienced energy workers who will take their knowledge with them when they retire. “This pending loss of petroleum engineering professionals is going to add to the challenge of finding people qualified over and above the fact that there’s an increase in demand in general,” Rick Davis, Director and Global Practice Leader for Energy and Natural Resources at executive search firm Stanton Chase told Breaking Energy.

Looking Locally

Some demand for energy sector talent can be met domestically. Recruitment specialists indicate that the country’s universities are producing large numbers of solar and wind energy engineers. And firms operating in China – both Chinese and foreign – can draw from a large pool of trained, educated workers in specializations critical to energy projects, such as tooling and manufacturing, Jed Van Voorhis, Executive Director at global executive search firm Boyden, told Breaking Energy.

GE is actively seeking out local hires. “We are making efforts to fill most positions with local talent, and for some specialized positions, we are able to attract a few Chinese-Americans back,” Yang said, referring to energy sector specialists who immigrated to the US after university. “They are interested in coming back to China to take on some challenging roles.”

Oil and gas companies are also making efforts to expand and draw from the talent pool in China. Oilfield service firm Baker Hughes established a geosciences training and recruitment center with China’s Yangtze University in Jingzhou to bring new well log analysts into the field. Shell’s Chief Human Resources and Corporate Officer Hugh Mitchell noted in a speech last year that the company had hired more than 500 people locally in China in 2012, up from fewer than 100 in 2009.

The Shale Challenge

But China’s shale resources in particular require looking beyond the country’s borders for specialists with the right skills.

“Shale development takes specific technological knowledge of drilling, fracking and completing these kinds of wells, which requires engineers and geologists and managers with that kind of experience,” Davis said. “A lot of other countries – and large companies, for that matter – are doing anything they can to gain that knowledge.”

Davis noted that while China’s national oil companies have been partnering up with US firms in joint ventures as a way to gain expertise, “we’re starting to see a lot more requests for US expats – we see that across China, Europe, India. There’s just not enough qualified professionals with the required technical petroleum engineering knowledge.” He added that technical and engineering expertise related to the LNG business, which is booming in China, is also in demand.

Companies all over the world are seeking to hire skilled oil and gas workers with shale development experience. “It’s everybody – it’s not just China – everyone’s scrambling for that knowledge and experience level,” Davis said.

Soft Skills

Staffing at the senior management level may also require looking abroad. China’s relatively recent transition to a more open market means that its pool of available candidates may lack the experience of counterparts from other countries. “China got into the game later than most other developed economies,” Van Voorhis said.

At a recently established GE China Innovation Center focusing on combined-cycle engineering solutions, most positions have been filled, but “it’s a really big challenge to find a qualified Chief of Engineering”, said Yang. “This is because the position requires in-depth technical expertise, a good reputation in the industry, and strong leadership and communication skills in dealing with both China and our HQ colleagues, and is based in Harbin,” she said.

Many other firms operating in China are also sourcing senior management talent from places like Singapore or Hong Kong, or even further afield, said Van Voorhis. He added that Taiwan has also been a strong source of recent hiring, particularly at the senior management levels of many technology firms.

But Van Voorhis noted that not all energy companies operating in China are equally flexible in their hiring practices. Non-Chinese companies – in energy and more broadly – are more likely to leave foreign senior managers at the helm over the long term, while Chinese energy firms have a tendency to bring in senior managers from outside China at the outset, only to jettison them once the company feels it has established a certain level of expertise, he said.

Related: China’s first steps to becoming a shale gas giant