Oil producing and supplying companies in the Middle East employ the highest number of workers in energy in the world, says a new report, released last week by the International Energy Agency [IEA].
From around eight million workers, five million people work in extraction and production and, around 1.4 million each in refineries and transport. The Middle East employs almost 20 per cent of these workers followed by North America and Africa with 15pc each. Energy companies in the GCC employ many foreign workers in oil and gas sector.
GCC States, therefore, indirectly contribute to the foreign exchange reserves of countries from where migrant workers come. Most beneficiary countries are from Asia, Africa, and a few from Maghreb belt. Central bank coffers of India, Nepal, Bangladesh, Sri Lanka, The Philippines, Pakistan, Thailand, Egypt, Lebanon, Kenya, Ghana, Nigeria, and other countries swell every year because of remittances made by workers from respective countries every month regularly.
The forex remittances had dropped significantly during Covid-19 pandemic two years ago. This happened because of temporary company shutdowns and layoff of foreign workers. Several energy supplying countries in the Middle East took harsh decisions of salary cuts and layoff because demand for fuel had dramatically dropped during lockdown.
Business and trade have changed for the better in 2022 with easing of pandemic protocols and travel controls that had asphyxiated economies globally for almost 22 months.
The first edition of the annual World Energy Employment Report maps energy jobs by technology and value chain segment. This report would help policymakers and decision makers on labour-related impacts of clean energy transitions and shifts in energy supply chains following Russia’s attack on Ukraine.
The report collects data from world energy industries. It reaffirms the positive change in global markets. Employment rates in energy has risen above pre-pandemic levels. Increased hiring of professionals in clean energy supplements this growth.
The number of energy jobs worldwide has recovered from pandemic disruptions. Mainly driven by new hiring in green energy. The number has surpassed its pre-pandemic level of over 65 million workers, or around two per cent of the total labour force. The report says oil and gas companies’ drop in jobs noted during the pandemic have yet to recover fully.
The renewed acceleration in markets, especially in clean energy, has surpassed the 50 per cent mark of its share in total energy jobs. Almost two-thirds of workers work in new projects and clean energy technologies. Although oil and gas are yet to recover fully its job rates, the report notes renewed upswing in hiring with new projects under development, notably new liquefied natural gas (LNG) infrastructure.
The report notes demand for skills of oil and gas workers by alternative energy companies. Petroleum and gas engineering skills workers can adapt to geothermal, including seismic interpretation, drilling and completions, reservoir mapping or flow assurance. Chemical engineers in refineries can apply their knowledge and equipment to produce green fuels and hydrogen.
Existing platforms and refineries give significant share of jobs. Drilling new oil wells and building immovable assets, too, create many jobs. In 2019, raw materials sectors engaged around 2.6 million workers. Construction provides jobs to 1.7m workers; manufacturing 1.65m, wholesale and transport 1.9m, and professionals and utilities 0.49m.
Global production of another allied sector, coal, added to 5.7 billion tonnes in 2021. This field employs 6.3m workers. China [3.4m] and India [1.4m] workers add up to more than 56 per cent of the global workforce in coal, and another 790,000 in other Asia Pacific countries. The number of workers will decline in future as governments move to green energy.
Natural gas industry continues to thrive. The Middle East, led by Qatar, North America and Europe produce more than 4100 BCM in 2019. International Gas Union [IGU] report says total global LNG trade in 2021 increased to 356.1MT and total regasification capacity increased to 850.1 MPTA in February 2021. This sector employed nearly 4 million workers in 2019. Asia Pacific share was 31pc, North America 17pc, Eurasia and the Middle East both 15pc. Hiring in clean energy sectors propels this growth.
Energy will see fastest job growth, but challenges of high cost and inflationary pressures slow down hiring. Policy responses to the pandemic, supply chain disruptions and the US Inflation Reduction Act, will help to add to new hiring demand and to shifting the status-quo of global energy supply chains, concludes the IEA report.
[Sudeep Sonawane, an India-based journalist, has worked in five countries in the Middle East and Asia. Email: [sudeep.sonawane@gmail.com]
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