1. Funded in part by the Government of Canada and the Canadian Association of Petroleum Producers May 2013 Speaker name The Decade Ahead: Labour Market Outlook to 2022 for Canada’s Oil and Gas Industry

2. www.petrohrsc.ca Table of Contents (Agenda) Introduction –Overview of the Petroleum HR Council and its Labour Market Information (LMI) Products and Services –Labour Market Outlooks: Scope and Methodology Canada’s Oil and Gas Industry Labour Market Outlook to 2022: Key Findings and Analysis –Current Oil and Gas Workforce –Employment Outlook –Hiring Outlook –Projected Labour and Skill Shortages Value-Added Analysis –Short-term Industry Hiring Requirements –Sector Analysis –Provincial Analysis –Full Employment Impacts of Industry Investments and Activities Over the Next Decade Recommended Workforce Solutions 2

3. www.petrohrsc.ca Petroleum HR Council of Canada—Now Part of Enform Canada Effective April 1, 2013, the Petroleum HR Council became part of Enform: Shared core relationships with industry associations, leaders and enterprises, as well as with government organizations. Long-standing close relationship with Enform that supports and promotes the highest safety standards in Canada’s upstream oil and gas industry through innovative training, certifications, services and resources. The main programs and services of the Council will continue, primarily focusing on two key areas of priority: Labour Market Information and Careers in Oil and Gas. Some unfunded work will not be continued, though all current projects will be completed. Over the spring and summer, we will work together with industry and other stakeholders to review our programs and structures as one integrated entity to best meet the needs of Canada’s oil and gas industry. 3

4. www.petrohrsc.ca LMI Value to Oil and Gas Stakeholders Timely, relevant and credible LMI provides facts and insights into current and future labour and skill shortages within Canada’s oil and gas industry. With petroleum LMI, stakeholders can develop and implement effective workforce strategies to build a sustainable oil and gas workforce. Specifically, LMI helps: 4

5. www.petrohrsc.ca Our LMI Expertise Labour Market Outlooks: Generate long-term employment and hiring projections using an industry-validated modelling system for: –Canada’s oil and gas industry as a whole –Key operating regions: BC, AB, SK and rest of Canada –Petroleum industry sectors: exploration and production (E&P), oil sands, oil and gas services and pipeline transmission –Core and “other” occupations Customized scenario outlooks can also be developed. Supply projections and labour demand-supply gap analysis available for total industry and by core occupation to help understand risks and opportunities. HR Trends and Insights: Provide intelligence on current and short-term labour market conditions and HR trends within Canada’s oil and gas industry. We produce the following LMI products. 5

6. www.petrohrsc.ca Labour Market Outlooks: Overview of Scope and Methodology Labour demand projections Include employment and hiring outlooks –Hiring due to industry activity, age-related attrition and non-retirement turnover Available for total industry and by: –Sector: oil and gas services (geophysical, drilling and completions and petroleum services), exploration and production (conventional E&P and oil sands) and pipelines –Province: British Columbia, Alberta, Saskatchewan and rest of Canada –Core and “other” occupations Occupational requirements are correlated to employment drivers, which vary by sector: –Oil and gas services and conventional E&P: oil and gas capital and operating expenditures –Oil sands operations: oil sands production –Pipelines: oil and gas operating expenditures 6

7. www.petrohrsc.ca Labour Market Outlooks: Overview of Scope and Methodology (cont’d) Labour supply projections Available for industry total and by core occupation Take into account two sources of labour supply: –New entrants –In-mobility labour supply Consider industry’s historical share of Canada’s labour supply and ability to attract workers in the future Projected labour and skill shortages Available for industry total and by core occupation When projected unemployment rates fall below the “balanced” unemployment rate –Balanced rate is set at 6 per cent for industry total but differs for each occupation Labour market analysis Assesses business and labour market trends impacting oil and gas industry’s workforce Recommends strategies and solutions for stakeholder consideration 7

8. www.petrohrsc.ca Core Occupations 8 OIL AND GAS OCCUPATIONS DETAILED IN THIS STUDY 1 Crane and heavy equipment operators 14 Oil and gas well drilling workers and service operators 2 Drafting technologists and technicians 15 Power engineers (steam-ticketed operators) 3 Drilling coordinators/production managers 16 Production clerks 4 Engineers: chemical, civil, electrical/ instrumentation, mechanical, mining, petroleum, project 17 Petroleum, gas and chemical process operators (no steam- ticket required) 5 Engineering technologists: chemical, civil, industrial, instrumentation, mechanical, petroleum/mining/geological 18 Public, environmental, health and safety inspectors 6 Geologists and geophysicists 19 Purchasing agents and officers 7 Heavy-duty equipment mechanics 20 Steamfitters and pipefitters 8 Industrial electricians 21 Supervisors, oil and gas drilling and service 9 Insulators 22 Supervisors, petroleum, gas and chemical processing and utilities 10 Millwrights and machinists 23 Technicians: environmental, instrumentation 11 Non-destructive testers and inspection technicians 24 Truck drivers 12 Oil and gas drilling, servicing, and related labourers 25 Welders 13 Oil and gas well drillers, servicers, testers, and related workers 26 Other occupations

9. www.petrohrsc.ca Canada’s Oil and Gas Labour Market Outlook to 2022: Key Findings and Analysis 9

10. www.petrohrsc.ca Business Trends Impacting Canada’s Oil and Gas Industry Attraction of investment –Oil sands, especially in situ –Liquefied natural gas (LNG) –Shale/conventional oil –Hebron offshore project Joint ventures with Asian companies –Longer-term view of development and learning opportunity Downside risks –Single customer market (US) –Lack of infrastructure to support market diversification –Skill shortages 10

11. www.petrohrsc.ca Oil and Gas Industry Activity – Two Scenarios 11 The Decade Ahead analyzes the labour market outlook for two potential industry activity scenarios based on a range of oil and gas prices, capital and operating expenditure, and oil sands production forecasts. Low Growth ScenarioExpansion Scenario Market diversification does not occur and growth is driven by North American demand. Moderate increases to conventional oil, oil sands and liquids-rich natural gas activity Market diversification occurs and Canadian producers supply international markets. Debottleneck and expansion of oil pipelines Development of LNG export facilities and pipelines

12. www.petrohrsc.ca Current Oil and Gas Industry Workforce TOP TEN OIL AND GAS OCCUPATIONS BASED ON 2012 EMPLOYMENT (# of jobs) Industry Total (195,200) 1 Oil and gas drilling, servicing, and related labourers 12,940 2 Oil and gas well drillers, servicers, testers, and related workers 12,305 3 Supervisors, oil and gas drilling and service 9,570 4 Oil and gas well drilling workers and service operators 9,030 5 Petroleum, gas, chemical process operators (no steam-ticket required) 7,140 6 Heavy equipment operators (except crane) 7,080 7 Petroleum engineers 6,860 8 Drilling coordinators/production managers 6,765 9 Truck drivers 6,440 10 Millwrights and machinists 5,160 12 Sector 2012 Employment (Estimated) Oil and gas services 94,100 Conventional E&P 72,000 Oil sands 22,300 Pipelines 6,800 Total Industry 195,200

13. www.petrohrsc.ca Oil and Gas Industry Employment Outlook to 2022 In the Low Growth scenario, the industry adds just under 18,300 jobs, while in the Expansion scenario, the industry adds 38,700 jobs. 13

14. www.petrohrsc.ca Comparison of Outlooks (2012 versus 2013) Due to market uncertainty, last year’s outlook showed a decline in employment numbers to 2015. This year, increased projected growth in the oil sands in the short-term and opportunities for market diversification in the long-term will lead to employment growth over the next decade. 14

15. www.petrohrsc.ca Industry-wide Hiring Outlook Over the next decade, three key factors will drive hiring needs within Canada’s oil and gas industry: industry activity levels age-related attrition workforce competition (or non-retirement turnover) Net Hiring Requirements = hiring due to industry activity + age-related attrition Total Hiring Requirements = hiring due to industry activity + age-related attrition + non-retirement turnover 15

16. www.petrohrsc.ca Long-Term Hiring Outlook (2013 – 2022) Total recruitment activity over the next decade ranges between 125,000 and 150,000 to meet industry activity, age-related attrition and a 3 per cent non-retirement turnover. 16

17. www.petrohrsc.ca Occupations with Greatest Net Hiring Requirements to 2022 TOP TEN OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS* TO 2022 (# of job openings Low Growth – Expansion) Industry Total (62,440 – 84,030 ) 1 Power engineers (steam-ticketed operators)2,945 – 4,105 2 Heavy equipment operators (except crane)2,425 – 3,990 3 Oil and gas well drillers, servicers, testers, and related workers2,945 – 3,985 4 Drilling coordinators/production managers3,050 – 3,945 5 Supervisors, oil and gas drilling and service2,930 – 3,640 6 Oil and gas drilling, servicing, and related labourers2,415 – 3,480 7 Petroleum engineers2,150 – 2,910 8 Truck drivers2,200 – 2,825 9 Oil and gas well drilling workers and service operators1,860 – 2,590 10 Geologists and geophysicists1,715 – 2,305 17 *Net hiring requirements = hiring due to industry activity + age-related attrition (excludes non-retirement turnover)

18. www.petrohrsc.ca Projected Labour Shortages 18 For both scenarios, there is no relief in sight as industry unemployment rates fall below a balanced labour market for the duration of the projection period. 5.1 5.6 4.9 Severe shortages experienced in 2007 are expected to return by 2014 when the industry unemployment rate falls to around five percent in either scenario.

19. www.petrohrsc.ca Occupational Labour Shortages 19 Occupations with ten-year average projected unemployment rates below the balanced rate (both scenarios): Chemical engineering technologists Chemical engineers Civil engineers Crane operators Drafting technologists and technicians Drilling coordinators/production managers Electrical/instrumentation engineers Environmental technicians Geologists and geophysicists Heavy equipment operators Heavy-duty equipment mechanics Industrial electricians Industrial engineering and manufacturing technologists and technicians Inspectors in public and environmental health and safety Instrumentation engineering technologists Instrumentation technicians Insulators Mechanical engineering technologists Mechanical engineers Millwrights and machinists Mining engineers Non-destructive testers and inspection technicians Oil and gas drilling, servicing, and related labourers Oil and gas well drillers, servicers, testers, and related workers Oil and gas well drilling workers and service operators Petroleum engineers Petroleum/mining/geological engineering technologists Power engineers (steam-ticket required) Project engineers Purchasing agents and officers Steamfitters and pipefitters Supervisors, oil and gas drilling and service Truck drivers Welders

20. www.petrohrsc.ca Occupations with Above-Average Age-Related Attrition Rates 20 OCCUPATION AVE. AGE OF THE LABOUR FORCE TEN-YEAR AVE. AGE-RELATED ATTRITION RATE Industry Total4023% Supervisors, petroleum, gas and chemical processing and utilities4432% Drilling coordinators/production managers4431% Geologists and geophysicists4429% Industrial engineering and manufacturing technologists and technicians4229% Inspectors in public and environmental health and safety4229% Purchasing agents and officers4228% Supervisors, oil and gas drilling and service4327% Non-destructive testers and inspection technicians4026% Petroleum engineers and crane operators4225% Project engineers and industrial electricians4125% Drafting technologists and technicians4025% Petroleum/mining/geological engineering technologists3825% Civil engineers4224% Electrical/instrumentation engineers4024% Instrumentation engineering technologists3924% Power engineers (or steam-ticketed operators)3824%

21. www.petrohrsc.ca Value-Added Analysis: Short-Term Hiring Outlook, Sector Analysis and Provincial Analysis 21

22. www.petrohrsc.ca Short-term Hiring Outlook (2013 – 2015) 22 In the short term, growth and workforce competition drives the majority of industry hiring. If market diversification occurs, an additional 5,860 jobs will be created in the Expansion scenario.

23. www.petrohrsc.ca Occupations with Greatest Net Hiring Requirements to 2015 Oil sands projects currently under construction will drives employment increases in: Oil sands operations Oil and gas services In the Expansion scenario, market diversification also increases conventional activity. TOP TEN OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS TO 2015 (# of job openings Low Growth – Expansion) Industry Total (30,130 – 36,000) 1 Oil and gas well drillers, servicers, testers, and related workers 1,450 – 1,850 2 Drilling coordinators/production managers1,505 – 1,835 3 Oil and gas drilling, servicing, and related labourers 1,325 – 1,735 4 Supervisors, oil and gas drilling and service1,245 – 1,510 5 Heavy equipment operators (except crane)1,355 – 1,510 6 Truck drivers1,060 – 1,310 7 Petroleum engineers1,070 – 1,305 8 Power engineers (steam-ticketed operators)1,290 – 1,305 9 Oil and gas well drilling workers and service operators 955 – 1,235 10 Geologists and geophysicists930 – 1,165 23

24. www.petrohrsc.ca Sector Analysis 24 Oil and Gas Services Exploration and Production (E&P) Pipelines Employment within the services sector (i.e., drilling and completions, geophysical, and petroleum services) is projected to increase in either scenario. If market diversification occurs, employment will further increase to meet growing demands for production from oil sands, shale oil and gas and the development of the LNG export sector. Great opportunities exist around LNG export development, oil sands developments and expanded offshore activities. However, significant investment from the E&P sector (i.e., conventional E&P activity and oil sands operations) is required as these developments are very expensive and require long lead times. Several thousand kilometers of new pipelines are required to realize market diversification. While the construction phase of the pipeline expansion and the required workforce will be significant, increases within the pipeline operations workforce will not be as intensive although age-related attrition will be a key concern for the sector.

25. www.petrohrsc.ca Net Hiring Requirements for Oil and Gas Services (Low Growth and Expansion) 25 TOP TEN OIL AND GAS SERVICES OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS TO 2022 (# of job openings: Low Growth – Expansion) Total Oil and Gas Services (37,700 – 47,900) 1 Oil and gas well drillers, servicers, testers, and related workers 3,025 – 3,990 2 Oil and gas drilling, servicing, and related labourers 2,630 – 3,605 3 Supervisors, oil and gas drilling and service2,635 – 3,270 4 Truck drivers2,105 – 2,675 5 Oil and gas well drilling workers and service operators 1,965 – 2,630 6 Drilling coordinators/production managers1,990 – 2,435 7 Heavy equipment operators (except crane)1,300 – 1,645 8 Millwrights and machinists1,125 – 1,430 9 Welders910 – 1,165 10 Geologists and geophysicists800 – 980 Hiring due to industry activity 16,400 to 25,900 Hiring due to age-related attrition 21,300 to 22,000 10-year net hiring requirements 37,700 to 47,900

26. www.petrohrsc.ca Net Hiring Requirements for Conventional E&P (Low Growth and Expansion) 26 TOP TEN CONVENTIONAL E&P OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS TO 2022 (# of job openings: Low Growth – Expansion) Total Conventional E&P (6,850 – 10,700) 1 Petroleum engineers595 – 920 2 Geologists and geophysicists585 – 880 3 Drilling coordinators/production managers535 – 800 4 Petroleum, gas, chemical, process operator (no steam-ticket required) 310 – 465 5 Petroleum/mining/geological engineering technologists 215 – 350 6 Purchasing agents and officers225 – 345 7 Supervisors, oil and gas drilling and service270 – 345 8 Supervisors, petroleum, gas and chemical processing and utilities 135 – 155 9 Inspectors in public and environmental health and safety 85 – 120 10 Truck drivers75 – 120 Hiring due to industry activity -8,300 to -4,700 Hiring due to age-related attrition 15,150 to 15,400 10-year net hiring requirements 6,850 to 10,700

27. www.petrohrsc.ca Net Hiring Requirements for Oil Sands (Low Growth and Expansion) 27 TOP TEN OIL SANDS OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS TO 2022 (# of job openings: Low Growth – Expansion) Total Oil Sands (14,900 – 22,200) 1 Power engineers (steam-ticket required)2,870 – 3,985 2 Heavy equipment operators (except crane)1,080 – 2,270 3 Petroleum engineers810 – 1,070 4 Heavy-duty equipment mechanics430 – 775 5 Primary production managers500 – 685 6 Instrumentation technicians400 – 570 7 Mechanical engineers370 – 545 8 Industrial electricians310 – 495 9 Millwrights and machinists310 – 490 10 Geologists and geophysicists325 – 450 Hiring due to industry activity 8,900 to 15,900 Hiring due to age-related attrition 6,000 to 6,250 10-year net hiring requirements 14,900 to 22,200

28. www.petrohrsc.ca Net Hiring Requirements for Pipelines (Low Growth and Expansion) 28 TOP TEN PIPELINE OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS TO 2022 (# of job openings: Low Growth – Expansion) Total Pipeline (3,000 – 3,250) 1 Petroleum, gas, chemical process operators (no steam-ticket required) 305 – 330 2 Petroleum engineers90 – 100 3 Millwrights and machinists75 – 80 4 Production clerks60 – 65 5 Industrial electricians55 – 60 6 Chemical engineers50 – 55 7 Instrumentation technicians45 – 50 8 Mechanical engineers45 – 50 9 Purchasing agents and officers30 – 35 10 Instrumentation engineering technologists25 – 30 Hiring due to industry activity 1,350 to 1,600 Hiring due to age-related attrition 1,650 10-year net hiring requirements 3,000 to 3,250

29. www.petrohrsc.ca Provincial Analysis 29 British Columbia (BC)Alberta (AB) Foreign investment and the province’s liquids-rich natural gas plays have kept BC’s oil and gas industry busier than expected, especially considering the lingering low natural gas price environment. However, the province is at a turning point as stakeholders wait to see if the development of an LNG export sector proceeds. Technology has a significant impact on the province’s oil and gas production potential as it allows companies to undertake new exploration and rework old wells. Alberta’s oil sands are expected to expand at a sustainable rate although growth may be impeded by market and transportation constraints. Saskatchewan (SK)Rest of Canada (RoC) Growth is driven by increased activity in the prolific Bakken shale oil formation where technology is reversing the decline in light oil production. Technology is also boosting activity around Lloydminster as thermal technology is being applied to enhance heavy oil production in the area. With the increased use of rail to address pipeline capacity issues, activity is expected to increase over the next couple of years, regardless of scenario. The majority of current industry activity is for Manitoba’s production from the Bakken shale oil formation, Nova Scotia’s offshore natural gas and Newfoundland and Labrador offshore oil. Technology has increased the potential of industry expansion across Canada, including the development of shale oil and gas deposits and the potential for LNG exports from Canada’s east coast.

30. www.petrohrsc.ca TOP TEN BC-BASED OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS TO 2022 (# of job openings Low Growth – Expansion) Total BC-Based Oil and Gas Industry (3,100 – 4,100) 1 Oil and gas well drillers, servicers, testers, and related workers 285 – 410 2 Oil and gas drilling, servicing, and related labourers 225 – 355 3 Supervisors, oil and gas drilling and service245 – 315 4 Truck drivers225 – 300 5 Oil and gas well drilling workers and service operators 180 – 265 6 Drilling coordinators/production managers180 – 230 7 Petroleum, gas, chemical process operators (no steam-ticket required) 145 – 185 8 Heavy equipment operators (except crane)135 – 180 9 Millwrights and machinists130 – 175 10 Welders95 – 130 30 Net Hiring Requirements in BC Oil and Gas Industry (Low Growth and Expansion) Hiring due to industry activity 640 to 1,600 Hiring due to age-related attrition 2,460 to 2,500 10-year net hiring requirements 3,100 to 4,100

31. www.petrohrsc.ca TOP TEN ALBERTA-BASED OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS TO 2022 (# of job openings Low Growth – Expansion) Total Alberta-Based Oil and Gas Industry (53,800 – 72,700) 1 Power engineers (steam-ticketed operators)2,925 – 4,075 2 Heavy equipment operators2,110 – 3,575 3 Drilling coordinators/production managers2,585 – 3,350 4 Oil and gas well drillers, servicers, testers, and related workers 2,305 – 3,065 5 Supervisors, oil and gas drilling and service2,320 – 2,865 6 Oil and gas drilling, servicing, and related labourers 1,920 – 2,700 7 Petroleum engineers1,920 – 2,605 8 Truck drivers1,690 – 2,140 9 Geologists and geophysicists1,510 – 2,040 10 Oil and gas well drilling workers and service operators 1,465 – 2,000 31 Net Hiring Requirements in AB Oil and Gas Industry (Low Growth and Expansion) Hiring due to industry activity 17,100 to 35,000 Hiring due to age-related attrition 36,700 to 37,700 10-year net hiring requirements 53,800 to 72,700

32. www.petrohrsc.ca TOP TEN SASKATCHEWAN-BASED OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS TO 2022 (# of job openings Low Growth – Expansion) Total Saskatchewan – based Oil and Gas Industry (2,600 – 3,450) 1 Oil and gas well drillers, servicers, testers, and related workers 230 – 330 2 Oil and gas drilling, servicing, and related labourers 170 – 275 3 Supervisors, oil and gas drilling and service220 – 275 4 Truck drivers190 – 250 5 Oil and gas well drilling workers and service operators 140 – 210 6 Drilling coordinators/production managers155 – 190 7 Petroleum, gas, chemical process operators (no steam-ticket required) 135 – 170 8 Heavy equipment operators (except crane)115 – 150 9 Millwrights and machinists110 – 150 10 Welders80 – 105 32 Net Hiring Requirements in SK Oil and Gas Industry (Low Growth and Expansion) Hiring due to industry activity 300 to 1,100 Hiring due to age-related attrition 2,300 to 2,350 10-year net hiring requirements 2,600 to 3,450

33. www.petrohrsc.ca TOP TEN REST OF CANADA OCCUPATIONS WITH GREATEST NET HIRING REQUIREMENTS TO 2022 (# of job openings Low Growth – Expansion) Total Rest of Canada-based Oil and Gas Industry (2,900 – 3,750) 1 Supervisors, oil and gas drilling and service145 – 185 2 Oil and gas well drillers, servicers, testers, and related workers 125 – 175 3 Drilling coordinators/production managers135 – 175 4 Petroleum, gas, chemical process operators (no steam-ticket required) 130 – 155 5 Oil and gas drilling, servicing, and related labourers95 – 150 6 Truck drivers105 – 140 7 Petroleum engineers95 – 125 8 Oil and gas well drilling workers and service operators 75 – 115 9 Geologists and geophysicists75 – 105 10 Millwrights and machinists75 – 95 33 Net Hiring Requirements in RoC Oil and Gas Industry (Low Growth and Expansion) Hiring due to industry activity 250 to 1,050 Hiring due to age-related attrition 2,650 to 2,700 10-year net hiring requirements 2,900 to 3,750

34. www.petrohrsc.ca Employment Impacts of Oil and Gas Investment and Activities to 2022 34 Investments and activities by the oil and gas industry benefit all Canadians.

35. www.petrohrsc.ca Building Canada’s Workforce 35

36. www.petrohrsc.ca Demand-driven Workforce Solutions 36 Given the global competitiveness for skilled workers, industry must continue working with government, education and training institutions and other labour supply stakeholders to increase the talent pool for the oil and gas industry.

37. www.petrohrsc.ca 37 Funded in part by the Government of Canada and the Canadian Association of Petroleum Producers To be added to our eNewsletter, email info@petrohrsc.ca @PetroHRCouncil @CareersInOandG facebook.com/careersinoilandgasslideshare.net/PetroHRCouncil Find us on social media: