LABOUR DEMAND OUTLOOK TO 2020 OIL SANDS CONSTRUCTION, MAINTENANCE AND OPERATIONS · 2017-08-31 ·...

OIL SANDS CONSTRUCTION, MAINTENANCE AND OPERATIONS

LABOUR DEMAND OUTLOOK TO 2020

Overview of Canada’s Oil Sands Sector 1

Executive Summary 4

Introduction 12

Scope and Methodology 15

Oil Sands Revised Spending Environment 20

Oil Sands Labour Demand to 2020 22

OilSandsConstructionandMaintenanceWorkforceRequirementsto2020 23

OilSandsOperationsLabourDemandProjectionsto2020 27

Conclusion 37

Appendix 1: LabourDemandMethodologies 38

Appendix 2: OilSandsOperationsLabourDemandOutlookby

OperationsTypes,JobFamilyandOccupation 40

Appendix 3: Glossary 54

Appendix 4: ListofTablesandFigures 56

Acknowledgements 57

Front cover photo credits Right: Øyvind Hagen, Statoil Left: Shell Canada

Photo credit: Nexen Energy

This project is funded by the Government of Canada’s Sectoral Initiatives Program and the Canadian Association of Petroleum Producers (CAPP).

OVERVIEW OF CANADA’S OIL SANDS SECTOR

The majority of Canada’s oil sands resources and all of its current operations are located in Alberta. While the Athabasca oil sands deposit near Fort McMurray is the largest and the most well-known, the Cold Lake oil sands area has also undergone development over the last decade. The province’s smallest oil sands area is located in the Peace River area.

Photo credit: Cenovus Energy Inc.

OIL SANDS CONSTRUCTION, MAINTENANCE AND OPERATIONS 1 LABOUR DEMAND OUTLOOK TO 2020

MINING

IN SITU

UPGRADING

TRANSPORTING

Oil sands are dug up and loaded into trucks.

They are taken to crushers.

They are mixed with hot water and sent to extraction.

Raw bitumen is extracted from the sand and water.

Solvents are added to the raw bitumen to remove remaining minerals and water.

The bitumen is heated to remove excess carbon to create synthetic crude oil.

The bitumen is transported to markets either before or after upgrading.Steam is injected

into the reservoir to soften the bitumen.

The softened bitumen is pumped to the surface.

OIL SANDS MINING, IN SITU AND UPGRADING OPERATIONS

FIGURE 1 SOURCE: PETROLMI

OIL SANDS OPERATIONSSince 1967, Canada has been commercially producing oil from the oil sands. Initially, crude bitumen was extracted using huge shovels and trucks, and surface mining techniques. However, only 20% of Canada’s known oil sands resource is close enough to the surface to be mined.

The other 80% of Canada’s oil sands resource is buried deeper and requires in situ production and different extraction technologies, such as steam-assisted gravity drainage (SAGD), to bring the bitumen to the surface.

As the name suggests, steam is injected in SAGD to soften and warm the bitumen so it can make its way to the surface through recovery wells. In many ways, SAGD is more similar to conventional oil production in that it uses horizontal drilling methods.

Upgrading is a refining process that converts bitumen into synthetic crude, more similar to light conventional oil. It also produces other by-products such as sulphur, which is used in the manufacturing of fertilizers, pharmaceuticals and other products.

Oil sands companies use a variety of transportation modes to get bitumen and synthetic crude oil to markets. While pipelines still move the majority of oil sands product, rail, truck and barges are playing an increasingly important transportation role.

The figure below illustrates the three distinct types of operations within the oil sands sector and transportation.


Design and engineering

Preparing the site

Civil and earthworks

Structural installation including prefabricated modules

Mechanical, electrical and instrumentation installation

Painting and insulation

Precommissioning, commissioning and start-up

OIL SANDS CONSTRUCTION

OIL SANDS CONSTRUCTION AND MAINTENANCEAside from operations, oil sands construction and maintenance activities are a key driver of employment in the oil sands sector. Construction includes off-site module fabrication and on-site construction, as well as ongoing and turnaround maintenance.

Off-site module fabrication involves the building of oil sands operations modules in a plant where construction, assembly, testing and pre-commissioning can occur in a controlled environment. Modules are then transported to the operations site for final assembly. The majority of off-site module fabrication for the oil sands sector takes place close to oil sands operations in northern Alberta, making it easier to transport.

Some oil sands module fabrication does occur outside of Alberta and, occasionally it takes place outside of Canada.

On-site construction involves assembly and construction work that needs to be completed in the field. In Alberta, on-site oil sands construction takes place alongside ongoing operations in the Athabasca, Cold Lake and Peace River regions.

Oil sands operations require ongoing plant maintenance and large-scale planned maintenance of operations called turnarounds. Routine maintenance and/or equipment replacement ensures the plants are running as efficiently as possible.

The figure below illustrates the phases of construction in the oil sands sector.



EXECUTIVE SUMMARY

In today’s economic environment, fluctuations in oil prices are resulting in regular revisions of capital and operating expenditure projections. This report, together with other industry and sectoral employment outlooks to be released in 2016, serve to provide projected employment based on 2015 spending projections, as well as forecasted production volumes released by the Canadian Association of Petroleum Producers (CAPP) in June 2015 (yet to be revised). Further reductions in capital expenditures or production will have a downward impact on employment.The oil sands sector is expected to experience continued hiring in operations and construction as the sector moves, for the first time in its history, from a period of expansion into a phase focused on improving the reliability and performance of existing operations. This is a significant shift from previous employment outlooks and reflects the substantial capital already invested in large oil sands projects to date. The oil sands sector is expected to find ways to reduce cost structures, improve profitability and therefore continue to hire construction, operations and maintenance workers, albeit at a lower rate than previously projected.

Since oil prices began their dramatic decline in November 2014, Alberta has seen a significant number of deferrals, delays and cancellations of in situ oil sands projects and a significant reduction in employment. While Alberta has seen the largest impact from decreased investment, reductions have also had a national impact as the sector employs almost 55,000 construction, operations and maintenance workers from across Canada.

“I don’t believe it’s going to go back. We’re in a period of change; we’re in a period of – if you want to use the words – new normal. All of us are going to have to find ways to do things more efficiently, find ways to get our costs more in line, and do it in a time of higher regulatory and environmental standards.” Murray Edwards, Chairman, Canadian Natural Resources Limited (Energy industry must adapt to‘new normal,’ Alberta oil executive says, The Globe and Mail, November 29, 2015)


OIL SANDS ON-SITE CONSTRUCTION, OPERATIONS AND ONGOING MAINTENANCE WORKFORCE REQUIREMENTS TO 2020 (2014 VS 2015)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2020f2019f2018f2017f2016f2015e

OperationsOngoing maintenance On-site construction2014 on-site construction, maintenance and operations

f: FORECASTe: ESTIMATE

NUM

BER

OF D

IREC

T JO

BS

12,320

12,360

29,900

54,580(2015 total)

62,510

2,015

17,060

35,070

54,145(2015 total)

68,910

By 2020, 54,145 direct construction, ongoing maintenance and operations workers are estimated to be employed in the sector, a decrease of approximately 430 (-1%) jobs over 2015. The growth of 5,170 (+17%) operations and 4,700 (+38%) ongoing maintenance jobs are offset by a decrease of 10,305 (-84%) on-site construction jobs. This demonstrates that the shift away from a period of expansion into a phase focused on improving the reliability and performance of existing operations will continue through to the end of 2020.

Reducing Capital While Increasing Production and Productivity

Following the record spending of $35.7 billion in 2014, oil sands capital investment dropped by 30% in 2015 and is not expected to recover before 2020. Capital expenditures (CAPEX) are focused on bringing projects that are currently under construction to completion.

Production from the oil sands will continue to grow across mining, in situ and upgrading operations as projects are either in the late stage of construction or have recently transitioned into operations. However, the lack of oil sands capital investment to 2020 is likely to have an impact on production and operations employment growth after 2020.

The oil sands sector is expected to achieve productivity gains during the early stages of the forecast period, as cost reductions are occurring at the same time that production is increasing. Once companies see increases in profitability, they may streamline processes and invest in technology to improve operational efficiencies, which are also likely to positively impact productivity.

SOURCE: OILMAP, PETROLMI (EXCLUDES AGE-RELATED ATTRITION)


SOURCE: OILMAP

0

5000

10000

15000

20000

25000

NUM

BER

OF D

IREC

T JO

BS

2020f2019f2018f2017f2016f2015e

2014 projection2015 projection

9,430(44%)

19,760 (92%)


OIL SANDS CONSTRUCTION AND MAINTENANCE LABOUR DEMAND

On-site Construction Sector Transitions into Maintenance

Decreased CAPEX and cancelled projects have reduced the demand for on-site construction labour demand. Decisive improvements in both oil price and cost environments will have to be realized to stimulate capital investment in expansion projects and improve the on-site construction labour demand outlook.

ON-SITE OIL SANDS CONSTRUCTION LABOUR DEMAND PROJECTION CHANGES (2014 VS 2015)

Despite the uncertainty around new project construction, annual aggregated peak construction workforce requirements remain steady at about 38,000 as maintaining operations reliability and preventing costly, unplanned production outages continue to be industry sector priorities.

Turnaround maintenance demand, included in the chart on the next page, is for all plant turnarounds in Alberta as the supply of this highly skilled workforce is the same for all sectors, regardless of whether the task involves work on an oil sands, refinery, natural gas processing, petrochemical, or pulp and paper plant.


Oil Sands Construction Demand Peaks in 2020

Based on projected CAPEX and the expected ongoing and turnaround maintenance intentions of oil sands companies, demand for oil sands construction and maintenance workers is expected to peak in 2020. The top 10 in-demand construction occupations listed in the table on the right account for 94% of oil sands on-site, module fabrication, ongoing and turnaround maintenance workforce requirements in 2020.

0

5000

10000

15000

20000

25000

30000

35000

40000

NUM

BER

OF D

IREC

T JO

BS

2020f2019f2018f2017f2016f2015ef: FORECASTe: ESTIMATE

Off-site module fabricationOn-site constructionOngoing maintenance Turnaround maintenance

14,265

12,360

12,320

3,965

18,250

17,060

2,150 1,780

ON-SITE CONSTRUCTION, OFF-SITE MODULE FABRICATION, AND ONGOING AND TURNAROUND MAINTENANCE WORKFORCE REQUIREMENTS TO 2020

SOURCE: OILMAP

TOP 10 CONSTRUCTION OCCUPATIONS WITH THE GREATEST LABOUR REQUIREMENTS

OCCUPATION (NATIONAL OCCUPATIONAL CLASSIFICATION)

DEMAND AT PEAK IN 2020

Steamfitters, pipefitters and sprinkler system installers (7252) 8,450

Boilermakers (7234) 7,410

Construction trades helpers and labourers (7611) 4,470

Carpenters (7271) 3,935

Construction managers (0711) and contractors and supervisors, trades and related occupations (7202, 7302, 7201, 7301, 7203)

3,375

Construction millwrights and industrial mechanics (7311) 1,850

Industrial electricians (7242) 1,650

Ironworkers (7236) 1,360

Insulators (7293) 1,460

Heavy equipment operators (except crane) (7521) and crane operators (7371)

940

Note: Age-related attrition is not included as part of OILMAP’s modeling system – see methodology.


OIL SANDS OPERATIONS LABOUR DEMAND PROJECTIONS TO 2020In contrast to years of steady growth in Alberta’s oil sands, the sector has experienced a decrease in its operations employment. In 2015, employment was estimated at 29,900 direct jobs – a decrease of 1,405 (5%) from 2014 levels. Direct operations employment is projected to add 5,170 (+17%) jobs by 2020 for a total of 35,070. This is 6,440 (-16%) fewer operations jobs than was previously projected.

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2020f2019f2018f2017f2016f2015e2014a2013a2012a2011a2010a

NUM

BER

OF D

IREC

T JO

BS

2014 projection 2015 projection

f: FORECASTe: ESTIMATEa: ACTUAL

-16%

41,510

35,070

22,160 29,900

31,305

SOURCE: PETROLMI

OIL SANDS OPERATIONS LABOUR DEMAND PROJECTION CHANGES (2014 VS 2015)

Mining Share of Total Industry Growth Increases

An analysis of oil sands labour demand by operations type indicates a sub-sectoral shift, as mining takes the largest share of total industry growth for the first time since 2010.

Direct Employment Versus Contingent Workforce

In addition to the direct employees oil sands operators hire, the sector has also relied heavily on a variety of independent contractors and/or consultants. Cutting these contingent workers was one of the first cost-cutting measures many oil sands companies undertook when oil prices started to drop in late 2014. The loss of this indirect workforce is not included in the chart above. An analysis of the impact of the downturn on Canada’s overall oil and gas industry will be included in the Labour Market Outlook to 2020 for Canada’s Oil and Gas Industry to be released in the spring.


SUMMARY OF OIL SANDS OPERATIONS LABOUR DEMAND TO 2020 BY OPERATIONS TYPE

02,0004,0006,0008,000

10,00012,00014,00016,00018,00020,000

2020f2019f2018f2017f2016f2015e2014a2013a2012a2011a2010a

NUM

BER

OF D

IREC

T JO

BS

Mining employment In situ employmentUpgrading employment


11,280

6,085

4,790

14,750

11,275

5,280

13,870

10,695

5,335

17,830

11,965

5,270

IN SITU MINING UPGRADING

2014–2015 change

Decrease of 580 (-5%) jobs between 2014 and 2015 for estimated total employment of 10,695.

Job losses reflect project delays and cancellations, as well as a reduction in operations costs.

Decrease of 880 (-6%) jobs between 2014 and 2015 for estimated total employment of 13,870.

The majority of job losses are due to companies implementing operations efficiencies to reduce costs.

Increase of 55 (+1%) jobs between 2014 and 2015 for total employment of 5,335.

The increase is due to construction of a late-stage project.

2016–2020 Increase of 1,270 (+12%) new jobs from 2015.

Growth is tempered due to decreased capital spending and the completion of major expansion projects in 2014.

Increase of 3,965 (+29%) new jobs.

Based on hiring for growth in mining operations.

Mining companies are expected to continue to look for opportunities to reduce costs, realize operations efficiencies and improve productivity through process improvements, application of technology, etc.

Net loss of 65 (-1%) jobs following completion of project currently under construction and no new project investment.

MINING, IN SITU AND UPGRADING LABOUR DEMAND TO 2020

SOURCE: PETROLMI


Demographics Also Likely to Drive Operations Labour Demand

The combination of labour demand due to industry activity level and job openings as a result of age-related attrition is referred to as net hiring requirements. Assuming the oil sands sector’s workforce retirements are similar to historical rates, demographics could drive up to 4,330 operations job openings during the forecast period in addition to the 5,170 job openings created by industry activity. However, the magnitude of job vacancies created by workforce retirements will depend on the degree to which oil sands companies have implemented early retirements as a strategy to reduce headcount and operations costs in the near term.

A total of 15 oil sands operations occupations account for 75% of the sector’s net hiring requirements and are likely to be the focus of company hiring strategies going forward.

OCCUPATION (NATIONAL OCCUPATIONAL CLASSIFICATION)

NET HIRING REQUIREMENTS

2016–2020

Heavy equipment operators (except crane) (7521) 1,720

Power engineers and power systems operators (steam-ticket required) (9241)

1,670

Heavy-duty equipment mechanics (7312) 530

Facility operation and maintenance managers (0714) 500

Engineering managers (0211) 390

Managers in natural resources production (0811) 345

Industrial electricians (7242) 280

Construction millwrights and industrial mechanics (7311) 270

Instrumentation technicians (2243) 215

Petroleum, gas, chemical process operator (no steam-ticket required) (9232)

210

Welders and related machine operators (7237) 165

Mechanical engineers (2132) 115

Inspectors in public and environmental health and safety (2263)

85

Electrical/instrumentation engineers (2133) 70

Purchasing agent and officers (1225) 65

TOP 15 OIL SANDS OPERATIONS OCCUPATIONS WITH THE GREATEST NET HIRING REQUIREMENTS


CONCLUSION With a 30% decrease in capital spending, the oil sands sector delayed, deferred or cancelled a number of projects, impacting on-site oil sands construction workforce requirements that are not expected to recover before 2020.

Likewise, operations expenditures were not spared. Oil sands companies undertook swift and widespread cost-cutting measures including termination of contracts with contingent workforces, renegotiations with third-party service

and equipment providers, wage decreases and cutbacks to travel and discretionary expenditures. Between 2014 and 2015, the oil sands sector eliminated approximately 1,400 (-4%) direct operations jobs and there is no certainty that additional cuts will not occur as the sector anticipates a continued low-price environment in 2016.

Amid the current employment picture, where layoffs across the industry continue, the oil sands sector is still projected to require approximately 38,000

construction workers (at peak) annually to maintain efficient operations and to possibly hire 9,500 operations positions (assuming historical retirement patterns continue). To successfully hire the best employees possible for these positions, the historical practice of inflating wages is not sustainable in the long term. It will be the ability to invest in innovation that facilitates accelerated technical, environmental and social performance that will enable companies to sustain lower costs when prices do eventually recover.


In today’s economic environment, fluctuations in oil prices are resulting in regular revisions of capital and operating expenditure projections. This report, together with other industry and sectoral employment outlooks to be released in 2016, serve to provide projected employment based on 2015 spending projections, as well as forecasted production volumes released by the Canadian Association of Petroleum Producers (CAPP) in June 2015 (yet to be revised). Further reductions in capital expenditures or production will have a downward impact on employment.

INTRODUCTION

The oil sands sector is expected to experience continued hiring in operations and construction as the sector moves, for the first time in its history, from a period of expansion into a phase focused on improving the reliability and performance of existing operations. This is a significant shift from previous employment outlooks and reflects the substantial capital already invested in large oil sands projects to date. The oil sands sector is expected to find ways to reduce cost structures, improve profitability and therefore continue to hire construction, operations and maintenance workers, albeit at a lower rate than previously projected.

Following years of record growth and expansion, oil price declines have severely impacted the oil sands sector since November 2014. While many expected a relatively short-lived bottom of this industry cycle, the speed and level of contraction has led to a recession in Alberta with no signs of immediate recovery. To enable operations to continue, oil sands companies have cancelled projects, reduced their workforce and shifted focus to cutting costs and finding operating efficiencies.

Although Alberta has seen the largest impact from the decreased investment, reductions have also had a national impact as the sector employs almost 55,000 construction, operations and maintenance workers from across Canada. For example, in 2014, the Regional Municipality of Wood Buffalo (RMWB) estimated the number of workers living in project accommodations and working in oil sands was 46,700.1 An in-depth survey of workers living in camps conducted during RMWB’s 2012 census found there were just as many workers from outside of Alberta working in the region as there were from inside the province.2

“We’re likely to see higher prices in coming years. But I think we need to be prepared for higher prices not being in the $80s but maybe being in the $50s or $60s.” Tim McMillan, CAPP President & CEO (CAPP reserves judgment on Alberta’s carbon cap, The Globe and Mail, December 29, 2015)


This Oil Sands Construction, Operations and Maintenance Labour Demand Outlook to 2020 examines projected workforce requirements by occupation for the anticipated off-site module fabrication, on-site construction and direct operations employment associated with oil sands mining, in situ and upgrading operations. This report also examines Alberta’s ongoing and turnaround maintenance workforce requirements of which oil and gas plant turnarounds account for 85–90%.3

The oil sands sector will still require workers to fill complex, specialized positions to support ongoing operations and to complete projects that are under construction, which means the need to attract the best and brightest talent will continue as the sector looks to develop innovative solutions to technical, social and environmental challenges.

Balancing near-term concerns with the longer-term outlook is especially challenging in this type of environment; however, it is important that the oil sands sector continues to advance its priorities to improve its performance, diversify markets and maintain its competitiveness. Despite low oil prices, companies remain committed to investing and innovating to adapt to an emerging lower carbon economy. Market diversification remains an elusive but much needed expansion; with the lack of pipelines to tide water, the industry is required to use more expensive modes of transportation such as rail and barges. Additionally, a focus on building healthy and prosperous relationships with key stakeholders, including First Nations continues. And, lastly, recently announced regulatory changes will impact future development.

1 Regional Municipality of Wood Buffalo. 2014 Shadow Population Count Report. Page 2.

2 Regional Municipality of Wood Buffalo Municipal Census 2012. Section Five: Project Accommodations Population Count. Pages 122, 123.

3 General Presidents’ Maintenance Committee for Canada and the National Maintenance Council for Canada.

Photo credit: Syncrude Canada Ltd.


Photo credit: Nexen Energy

In order to provide insight into the impact of the current economic environment on future hiring requirements in the oil sands, this report explores:

• Workforce requirements by occupation for oil sands construction and maintenance to 2020 derived from industry-validated construction and expansion projects

• Direct oil sands operations labour demand from industry activity based on capital spending projections, production expectations and age-related attrition

PetroLMI’s labour market outlooks are intended to provide industry, education and training institutions, and governments a quantitative and qualitative analysis to assist with workforce planning, and program and policy development. The following report provides a shorter-term five-year outlook. The remaining outlooks to be released in 2016 examine five-year employment forecasts for the exploration and production (E&P) sector, the oil and gas services sector, the pipelines sector and a potential Liquefied Natural Gas (LNG) sector. Each of Canada’s oil and gas industry sectors is being impacted differently by the current economic environment.


METHODOLOGY INPUTS/DATA SOURCES OUTPUT

OILMAP Relationship between the project size (capacity) and trade hours are used to estimate the hours per barrel by project type (in situ, mining and upgrading) for the various trade occupations

Project data gathered from construction project owners

On-site oil sands construction labour demand

Relationship between the project size (capacity), estimated number of modules required by project type (in situ, mining and upgrading) and trade hours are used for the various trade occupations

Data gathered from construction project owners

Off-site module fabrication oil sands labour demand

Aggregated Alberta data with adjustments to account for the role of non-union contractors in maintenance and labour mobility between turnaround and ongoing maintenance

General Presidents’ Maintenance Committee for Canada and the National Maintenance Council for Canada

Ongoing and turnaround maintenance for all of Alberta’s industrial plants

PetroLMI The number of direct operations workers required by occupation to realize projected capital investment and production levels

Impact of productivity gains and losses on workforce requirements

Canadian Association of Petroleum Producers (CAPP) Crude Oil Forecast (for production)

ARC Financial (for capital investment)

Historical indicators of productivity as well as intelligence gathered by PetroLMI

Direct operations labour demand due to industry activity by operations type (mining, in situ and upgrading)

Uses occupation-specific age of retirement and the age demographic of industry’s core occupations

Statistics Canada Demand due to age-related attrition

Labour Demand Methodology

The labour demand projections included in this report have been produced using modelling systems developed by PetroLMI and the Government of Alberta’s Ministry of Labour in association with the Construction Owner’s Association of Alberta (COAA).

PetroLMI’s model calculates net hiring requirements for 56 direct operations occupations based on labour demand generated by industry activity, plus the hiring needed to replace retiring workers (age-related attrition). An enhancement incorporated into this year’s methodology is the impact of labour productivity changes on workforce requirements (see Spotlight on Productivity Enhancements p.16)

The Oil Sands Information, Labour Market Analysis and Projection (OILMAP) is the system developed by the Ministry of Labour and COAA to produce workforce requirements for forecasted on-site construction, off-site module fabrication, and ongoing and turnaround maintenance activity for 16 trades occupations and a combined managers and supervisors category.

SUMMARY OF OILMAP AND PETROLMI’S OIL SANDS LABOUR DEMAND MODELLING METHODOLOGY

TABLE 1 SOURCE: PETROLMI

SCOPE AND METHODOLOGY


The modelling systems used for this report are similar in that both determine activity-related workforce requirements using the relationship between key employment drivers and their in-scope occupations. For oil sands operations, age-related attrition (workforce retirements and natural deaths) is both a labour demand and supply consideration. From a demand perspective, when operations workers retire from their positions, companies experience increased hiring requirements

as they need to fill those job openings, even though the amount of production has not changed. From a supply perspective, workers who have retired are no longer available to hire. The impact of retirements from the oil and gas industry from the supply angle will be further explored in the Labour Market Outlook to 2020 for Canada’s Oil and Gas Industry available in the spring.

For the construction occupations included in this report, construction retirements are considered to be a

labour supply concern. The nature of the work for this report’s in-scope construction occupations is to move from project to project. Therefore, it is assumed that a worker will complete a project before choosing to retire, so that worker’s retirement does not create additional demand for that project but rather decreases the number of workers available for subsequent projects.

Detailed descriptions of each modelling system can be found in Appendix 1.

Spotlight on Productivity EnhancementsPetroLMI’s labour demand model takes into consideration that oil sands operators have been implementing strategies to become more competitive and profitable. Over the past number of years, the industry has implemented the following strategies with the intent to increase productivity across all phases of construction, operations and maintenance: • Standardizing project design• Maximizing modularization during construction• Improving the supply chain process for both construction

and operations• Increasing the use of predictive maintenance to ensure

reliable operations

One of the most innovative initiatives undertaken by the oil sands sector to advance the industry’s productivity through research and development was the formation of Canada’s Oil Sands Innovation Alliance (COSIA) in 2012. This alliance of oil sands producers was formed to leverage funds and collaborate in ways that promote best-in-class thinking to improve environmental performance. The In situ Oil Sands Alliance (IOSA), formed in 2008, is a similar organization focused on advancing in situ technologies and reducing the sub-sector’s environmental footprint.

More recently, the industry has responded to the rapid descent in oil prices with cost-cutting measures such as employee layoffs and renegotiation of services and equipment contracts. These actions have increased productivity by reducing the number of employees and costs per barrel of oil. However, it is anticipated that these responses will not be enough for companies to remain competitive once oil prices rebound. Rather, companies will need to continue to innovate and attract, retain and develop a highly skilled workforce to ensure they are positioned to maintain higher levels of productivity in the long term.


In-scope Occupations

The quantitative labour demand projections provided by OILMAP and PetroLMI provide workforce requirements for a combined total of 66 occupations as defined by the National Occupational Classification (NOC). PetroLMI also includes an “other occupations” category to capture residual occupations and ensure the total oil sands workforce is incorporated.

OCCUPATIONS (NOC) OILMAP PetroLMI

Automotive mechanical installers and servicers (7535)

Automotive service technicians, truck and bus mechanics and mechanical repairers (7321)

Boilermakers (7234)

Carpenters (7271)

Concrete finishers (7282)

Chemical engineers (2134)

Chemical technologists and technicians (2211)

Civil engineering technologists and technicians (2231)

Civil engineers (2131)

Construction estimators (2234)

Construction managers (0711)

Construction millwrights and industrial mechanics (7311)

Contractors and supervisors, trades and related occupations4 (7202, 7302, 7201, 7301, 7203)

Crane operators (7371)

Drafting technologists and technicians (2253)

Electrical and electronics engineering technologists and technicians (2241)

Electrical and electronics engineers (2133)

Electrical power line and cable workers (7244)

Engineering managers (0211)

Facility operation and maintenance managers (0714)

Geological and mineral technologists and technicians (2212)

Geological engineers (2144)

4 Includes contractors and supervisors, electrical trades and telecommunications occupations (7202), heavy equipment operator crews (7302), machining, metal forming, shaping and erecting trades and related occupations (7201), mechanic trades (7301), and pipefitting trades (7203)


OCCUPATIONS (NOC) continued OILMAP PetroLMI

Geoscientists and oceanographers (2113)

Heavy equipment operators (except crane) (7521)

Heavy-duty equipment mechanics (7312)

Industrial and manufacturing engineers (2141)

Industrial electricians (7242)

Industrial engineering and manufacturing technologists and technicians (2233)

Industrial instrument technicians and mechanics (2243)

Inspectors in public and environmental health and occupational health and safety (2263)

Insulators (7293)

Ironworkers (7236)

Land survey technologists and technicians (2254)

Machinists and machining and tooling inspectors (7231)

Managers in natural resources production and fishing (0811)

Mechanical engineering technologists and technicians (2232)

Mechanical engineers (2132)

Metallurgical and materials engineers (2142)

Mining engineers (2143)

Natural and applied science policy researchers, consultants and program officers (4161)

Non-destructive testers and inspection technicians (2261)

Oil and gas drilling, servicing, and related labourers (8615)

Painters (7294)

Petroleum engineers (2145)

Petroleum, gas, and chemical process operator (9232)

Power engineers and power systems operators (9241)

Power system electricians (7243)

Production logistics co-ordinators (1523)


OCCUPATIONS (NOC) continued OILMAP PetroLMI

Professional occupations in advertising, marketing and public relations (1123)

Purchasing agents and officers (1225)

Purchasing and inventory control workers (1524)

Purchasing managers (0113)

Scaffolders (7611)

Sheet metal workers (7233)

Shippers and receivers (1521)

Steamfitters, pipefitters and sprinkler system installers (7252)

Supervisors, mining and quarrying (8221)

Supervisors, supply chain, tracking and scheduling co-ordination occupations (1215)

Trades helpers and labourers (7611)

Truck drivers (7511)

Water and waste treatment plant operators (9243)

Welders and related machine operators (7237)

Other occupations



As identified in the methodology section, PetroLMI and OILMAP’s labour demand models calculate the relationship between occupational requirements and the following drivers of employment: oil sands capital expenditures (CAPEX), production and productivity, and gains insight from industry experts on future trends. As much of oil sands CAPEX is spent on construction, changes to this expenditure have the biggest impact on the construction workforce. Operations employment is jointly driven by CAPEX and production, and job losses or increases align with these employment drivers.

Oil Sands Capital Expenditures

After a record spending of $35.7 billion in 2014, oil sands capital investment dropped by 30% to an estimated $25 billion in 2015 and is not expected to recover to previous levels before 2020. Going forward, CAPEX is focused on projects currently under construction. This includes well-capitalized mining projects that are in the latter stages of construction with anticipated completion dates around 2018.

The drop in in situ CAPEX is due primarily to the relatively recent decline in oil prices, with the completion of some major expansions in 2014 also contributing. In situ production expansions tend to be smaller and somewhat easier to suspend or scale back than mining or upgrading projects. In the same vein, they are more easily reinstated if project financials improve.

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2020e2019e2018e2017e2016e2015e2014a

MM

$

TotalIn situMiningUpgrading-30%


OIL SANDS CAPEX FORECAST TO 2020

FIGURE 3 SOURCE: ARC FINANCIAL

OIL SANDS REVISED SPENDING ENVIRONMENT


Oil Sands Production

Oil sands production is projected to increase across all operations types – in situ, mining and upgrading. The projected decrease in oil sands CAPEX has minimal impact on the production forecast to 2020 as the majority of new production is as a result of expansion projects that have recently transitioned to operations and also the continued construction of late-stage projects. The negative impact of the lack of oil sands capital investment on production, and therefore job growth, will likely be felt after the forecast period.

Expectations on Workforce Productivity

Oil sands workforce productivity is tied to the employment drivers – CAPEX and production – and is based on the number of oil sands employees required to produce a barrel of oil (80% weight) and to manage a dollar of capital spending (20% weight). PetroLMI’s labour demand model includes productivity assumptions determined from intelligence gathered from industry representatives. It also incorporates productivity trends from historical industry cycles.

From 2010 to 2014, rapid expansion of the oil sands sector and its employment resulted in a loss of productivity because employee numbers rose prior to increases in production. With the decline in oil prices in 2015, the oil sands sector began to reverse the decline in productivity by reducing the number of employees and reducing other costs while maintaining production levels. The oil sands sector is

expected to maintain productivity gains, especially during the early stages of the forecast period, as the sector continues to reduce its workforce, streamline processes and contain costs while simultaneously growing production.

The implementation of technology to improve operational efficiencies, including the automation of some operations functions, could also have a positive impact on productivity. Companies will likely not be in the position to invest in game-changing technologies until profitability improves. The mining sub-sector has perhaps the greatest opportunity to continue to implement these types of productivity-enhancing measures as new projects come on stream.

In the latter half of the forecast period, however, demographics are expected to temper productivity gains as workers retire from the sector and less-experienced workers begin to make up a larger portion of the workforce.

800

1,000

1,200

1,400

1,600

1,800

2,000

2020f2019f2018f2017f2016f2015e2014a

MIL

LION

BAR

RELS

PER

DAY

2015 In situ forecast2015 Mining forecast 2015 Upgrading forecast2014 In situ forecast2014 Mining forecast 2014 Upgrading forecast


OIL SANDS PRODUCTION FORECAST TO 2020

FIGURE 4 SOURCE: CANADIAN ASSOCIATION OF PETROLEUM PRODUCER’S CRUDE OIL FORECAST, MARKETS & TRANSPORTATION. JUNE 2014 AND JUNE 2015 (PROJECTS THAT ARE OPERATING AND UNDER CONSTRUCTION).


Total Oil Sands Labour Demand to 2020

Hiring for oil sands workers is expected to continue to 2020. However, it will be at a lower rate than projected previously (as shown in figure 5), and will reflect a shift away from hiring on-site construction workers for expansion to focus on operations workers for projects nearing completion and maintenance workers to ensure the ongoing reliability and efficiency of existing operations.

By 2020, 54,145 direct construction, ongoing maintenance and operations workers are estimated to be employed in the sector, an aggregated decrease of approximately 430 (-1%) jobs over 2015. The growth of 5,170 (+17%) operations and 4,700 (+38%) ongoing maintenance jobs are offset by a decrease of 10,305 (-84%) on-site construction jobs.

Demographics may also play a role in job creation. If operations workforce retirements continue at historical rates, the oil sands sector could see up to 4,330 job openings due to age-related attrition. However, the magnitude of job vacancies created by workforce retirements will depend on the degree to which oil sands companies have implemented early retirements as a strategy to reduce headcount and operations costs in the near term.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2020f2019f2018f2017f2016f2015e

OperationsOngoing maintenance On-site construction2014 on-site construction, maintenance and operations


NUM

BER

OF D

IREC

T JO

BS

12,320

12,360

29,900

54,580(2015 total)

62,510

2,015

17,060

35,070

54,145(2015 total)

68,910

FIGURE 5 SOURCE: OILMAP, PETROLMI (EXCLUDES AGE-RELATED ATTRITION)

OIL SANDS ON-SITE CONSTRUCTION, OPERATIONS AND ONGOING MAINTENANCE WORKFORCE REQUIREMENTS TO 2020 (2014 VS 2015)

OIL SANDS LABOUR DEMAND TO 2020


0

5000

10000

15000

20000

25000

NUM

BER

OF D

IREC

T JO

BS

2020f2019f2018f2017f2016f2015e

2014 projection2015 projection

9,430(44%)

19,760 (92%)


ON-SITE OIL SANDS CONSTRUCTION LABOUR DEMAND PROJECTION CHANGES (2014 VS 2015)

OIL SANDS CONSTRUCTION AND MAINTENANCE WORKFORCE REQUIREMENTS TO 2020 Previous forecasts for oil sands employment reflected a large number of planned or proposed projects progressing from approval to construction phases. As a result of today’s economic environment, this report assumes that construction and maintenance labour demand projections are based solely on oil sands production increases from approved projects, which OILMAP has validated with industry. Most of these projects are already under construction, and the production assumptions included by OILMAP align with the Canadian Association of Petroleum Producer’s (CAPP) operating and under-construction production assumptions.

Downward Trajectory for On-Site Construction Labour Demand

Based on the announced intentions of oil sands companies to decrease CAPEX and delay or cancel projects, a downward trend for on-site construction labour demand is anticipated to 2020.5 Decisive improvements in both oil price and cost environments will have to be realized to stimulate capital investment in expansion projects and improve the on-site construction labour demand outlook.

Transition into Maintenance Phase

CAPEX decreases have less of an effect on ongoing and turnaround maintenance requirements as this workforce is focused on improving existing operations as opposed to expanding operations. An increased number of workers will be required as oil sands companies continue to prioritize the maintenance of operations reliability and prevention of costly, unplanned production outages.

FIGURE 6 SOURCE: OILMAP

5 Off-site module fabrication will also be impacted by decreased oil sands capital investment but a comparison of 2014 and 2015 workforce requirement projections are not available due to a shift in methodology.


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2020f2019f2018f2017f2016f2015e

NUM

BER

OF D

IREC

T JO

BS

2015 ongoing maintenance2015 turnaround maintenance

2014 ongoing and turnaround maintenance


12,360

14,265

28,91518,250

41,265

17,060

Cost and quality management are critical factors in deciding on a maintenance workforce strategy. Oil sands companies react differently, depending on the strategy they choose. Some companies decide to contract a significant amount of their ongoing maintenance work to a third party, while others prefer to retain the maintenance skills and expertise in-house.

Turnaround maintenance, in particular, requires a significant amount of planning as a full shutdown of the unit/plant is required, and most operations companies will have highly skilled maintenance-planning staff in-house. Other in-house maintenance trades are also likely to support turnarounds, however, much of the work is likely to be completed by third-party contractors.

Workforce demand is somewhat up-and-down because companies schedule turnarounds at times when they are considered to cause the least disruption to operations (typically during the summer when weather is less of a factor).

Given the large number of skilled workers required over a relatively short period of time, the broader picture of turnaround maintenance workforce requirements is important for workforce planning for the oil sands sector. Turnaround maintenance demand, shown in the chart below, is for all plant turnarounds in Alberta as the supply of this highly skilled workforce is the same for all sectors, regardless of whether the task involves work on an oil sands, refinery, natural gas processing, petrochemical, or pulp and paper plant.

Aggregated Oil Sands Construction and Maintenance Workforce Requirements

Despite the uncertainty regarding the pace and magnitude of new project construction and the deep declines in off-site module fabrication and on-site construction labour demand, annual aggregated peak construction workforce requirements remain steady at around 38,000 workers as ongoing and turnaround maintenance continues to be a priority.

ONGOING AND TURNAROUND MAINTENANCE LABOUR DEMAND OUTLOOK TO 2020



ON-SITE CONSTRUCTION, OFF-SITE MODULE FABRICATION, AND ONGOING AND TURNAROUND MAINTENANCE WORKFORCE REQUIREMENTS TO 2020

Oil Sands Construction Demand Peaks in 2020

Demand for oil sands construction and maintenance workers is expected to peak in 2020. Table 3 on p. 26 illustrates workforce demand in 2020 for oil sands on-site construction and module fabrication as well as the workforce required to meet Alberta’s ongoing and turnaround maintenance activity.

0

5000

10000

15000

20000

25000

30000

35000

40000

NUM

BER

OF D

IREC

T JO

BS

2020f2019f2018f2017f2016f2015ef: FORECASTe: ESTIMATE

Off-site module fabricationOn-site constructionOngoing maintenance Turnaround maintenance

14,265

12,360

12,320

3,965

18,250

17,060

2,150 1,780

Although turnaround maintenance tends to require higher levels of experience, the table also illustrates the high degree of transferability and mobility of occupations across all types of industrial construction and maintenance work. Construction workers are used to moving from project to project to sustain a career in the petroleum industry.

The top 10 in-demand construction occupations listed in the table account for 94% of oil sands on-site, module fabrication, and ongoing and turnaround maintenance workforce requirements in 2020.



OCCUPATION DEMAND AT PEAK (2020)

USAGE BY CONSTRUCTION TYPE

Module fabrication

On-site Maintenance (Ongoing and turnaround)

Steamfitters, pipefitters and sprinkler system installers (7252)

8,450 H H H

Boilermakers (7234) 7,411 L L H

Trades helpers and labourers (7611) 4,468 L M H

Carpenters (7271) 3,936 L L H

Construction managers (0711) and contractors and supervisors, trades and related occupations6 (7202, 7302, 7201, 7301, 7203)

3,374 M M M

Construction millwrights and industrial mechanics (7311) 1,847 L L M

Industrial electricians (7242) 1,648 H H L

Ironworkers (7236) 1,358 H M L

Insulators (7293) 1,460 M L M

Heavy equipment operators (except crane) (7521) and crane operators (7371)

938 n/a H L

Welders and related machine operators (7237) 484 H H L

Sheet metal workers (7233) 455 L L L

Painters (7294) 390 L L L

Truck drivers (7511) 296 L L L

Industrial instrument technicians and mechanics (2243) 202 L L L

Scaffolders (7611) 232 L L L

Concrete finishers (7282) 173 L L L

CONSTRUCTION LABOUR OCCUPATIONS WITH THE GREATEST LABOUR REQUIREMENTS AT PEAK IN 2020 BY OCCUPATION

Assessment based on percentage of total workforce required by construction type:H: > 12%M: 5-11%L: <5%


6 Includes contractors and supervisors, electrical trades and telecommunications occupations (7202), heavy equipment operator crews (7302), machining, metal forming, shaping and erecting trades and related occupations (7201), mechanic trades (7301), and pipefitting trades (7203)


0

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10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2020f2019f2018f2017f2016f2015e2014a2013a2012a2011a2010a

NUM

BER

OF D

IREC

T JO

BS

2014 projection 2015 projection


-16%

41,510

35,070

22,160 29,900

31,305


Direct jobs are those positions that are filled by employees who are directly hired by oil sands operators. Historically, the sector has also relied heavily on a variety of independent contractors and/or consultants. Reducing these contingent workers was one of the first cost-cutting measures many oil sands companies undertook when oil prices began to drop in late 2014. It is important to note that the decline in the number of contingent workers is not included in the chart above or in the 1,400 direct job

OIL SANDS OPERATIONS LABOUR DEMAND PROJECTIONS TO 2020In contrast to years of steady growth in Alberta’s oil sands, the sector has experienced a decrease in employment in operations. In 2015, employment was estimated to be 29,900 direct jobs – a decrease of 1,400 (-5%) from 2014 levels. Direct operations employment is projected to add 5,170 (+17%) jobs by 2020 for a total of 35,070. This is 6,440 (-16%) fewer operations jobs than was previously projected.

OIL SANDS OPERATIONS LABOUR DEMAND PROJECTION CHANGES (2014 VS 2015)

decrease identified in this section. When this indirect workforce is considered, oil sands job losses due to CAPEX reductions and project cancellations are much more significant. An analysis of the impact of the downturn on Canada’s overall oil and gas industry is included in the Labour Market Outlook to 2020 for Canada’s Oil and Gas Industry to be released in the spring.


Mining Share of Total Industry Growth Increases

An analysis of oil sands labour demand by operations type indicates a sub-sectoral shift, as mining takes the largest share of total industry growth for the first time since 2010 (see figure 11 to the left).

2010–20142015–2020

-10

0

10

20

30

40

50

60

70

80

90

UpgradingIn situ

SHAR

E OF

TOT

AL J

OB G

ROW

TH (%

)

77%

38%

57%

24%

5%

-1%

CHANGE IN SUB-SECTOR SHARE OF TOTAL GROWTH


02,0004,0006,0008,000

10,00012,00014,00016,00018,00020,000

2020f2019f2018f2017f2016f2015e2014a2013a2012a2011a2010a

NUM

BER

OF D

IREC

T JO

BS

Mining employment In situ employmentUpgrading employment


11,280

6,085

4,790

14,750

11,275

5,280

13,870

10,695

5,335

17,830

11,965

5,270

MINING, IN SITU AND UPGRADING LABOUR DEMAND TO 2020



IN SITU MINING UPGRADING

2014–2015 change

2015 employment is estimated to be 10,695, a decrease of 580 (-5%) jobs.

Job losses are a reflection of project delays and cancellations as well as a reduction in operations costs.

In 2015, oil sands mining employment is estimated to be 13,870, down 880 (-6%) jobs from 2014.

The majority of job losses are due to companies implementing operational efficiencies to reduce costs.

Upgrading is the only oil sands sub-sector to add jobs between 2014 and 2015. The key driver behind the increase of 55 (+1%) positions for total 2015 employment of 5,335 was the ongoing construction of a late-stage project.

2016–2020 After rapid growth and the addition of 5,190 jobs from 2010 to 2014, in situ employment growth is tempered due to decreased capital spending and the completion of major expansion projects in 2014.

With 1,270 (+12%) new positions, in situ employment growth in the later part of the decade is projected to be only 25% of the jobs the sub-sector created in the first half.

In situ CAPEX is more nimble and could be reinstated relatively quickly if the price and cost environment improves.

Continued spending on mining projects that are currently under construction result in an addition of 3,965 (+29%) jobs during the forecast period. Hiring for expanded mining operations is currently underway and the greatest production increases will be realized 2016–2018.

Mining operations are labour intensive and this is a potential risk in the current oil price environment. Therefore, it is expected that mining companies will continue to look for opportunities to reduce costs, realize operations efficiencies and improve productivity through process improvements, application of technology, etc.

While late-stage project completions increase, contributing to employment growth through 2016–2017, the lack of new project investment results in net loss of about 65 (-1%) jobs during the forecast period.

SUMMARY OF OIL SANDS OPERATIONS LABOUR DEMAND TO 2020 BY OPERATIONS TYPE



Production-Related Occupations Perform Better Than CAPEX-related Occupations

As identified in figure 9, the oil sands sector is anticipated to add approximately 5,170 jobs between 2016 and 2020 due to industry activity. While there were job losses across all job families7 between 2014 and 2015, those weighted more to production will see recovery more quickly.

Job families with a strong focus on production include:

• Heavy equipment operators and crane operators

• Power engineers • Maintenance trades (including

supervisors)• Process, water and waste operators

Operations and Maintenance Managers

Job families that play a larger role in supporting work related to capital expenditures not only experienced the greatest job losses in 2015, but they do not fully recover during the forecast period. These job families are typically involved in the planning and execution of construction and/or expansion projects and include:

• Construction management and support• Supply chain management and logistics• Engineers (including managers)• Technologists and technicians• Geologists and geophysicists • Environmental, inspection, policy and

stakeholder relations

Historically, operations workers who are connected to CAPEX, such as construction management and support, and supply chain management, move from one expansion project to the next – especially within in situ where production additions are phased in. In today’s spending environment, however, expansion projects and their related occupations are impacted. Many of the occupations associated with the other CAPEX-related job families are also involved in operations, but although they are impacted by CAPEX reductions, the available work opportunities are not completely eliminated.

On the whole, job families and occupations connected to CAPEX are transferable to other oil and gas construction/expansion work, such a natural gas processing plants or liquefied natural gas (LNG) projects.

7 A job family is a group of occupations involved in similar types of work and positions that require similar training, skills and knowledge.


Demographics Also Likely to Drive Labour Demand

Oil sands operations labour demand not only includes employment created by industry activity levels but also includes job openings due to age-related attrition. The combination of these two types of demand is referred to as net hiring requirements as job openings due to age-related attrition can offset the loss of jobs experienced during industry downturns. Assuming the sector’s workforce retirements are similar to historical rates, demographics could drive up to 4,330 operations job openings during the forecast period in addition to the 5,170 job openings created by industry activity. The chart below is based on this assumption. However, if early retirements have been implemented as a key strategy in headcount and cost reductions, future

hiring due to age-related attrition will likely be less pronounced than historical rates.

In these situations, companies may be hiring for key positions vacated by retirees while at the same time reducing employee headcount to address the need to reduce costs. This was likely the case throughout 2015.

Mining is the only sub-sector that is expected to see hiring due to industry activity outpace hiring due to age-related attrition. In situ and upgrading employment growth due to industry activity is hindered by decreased CAPEX during the forecast period.

-500

1,500

3,500

5,500

7,500

9,500

11,500

UpgradingIn situMiningTotal oil sands

NUM

BER

OF D

IREC

T JO

BS

Hiring due to age-related attritionHiring due to industry activity

5,965

2,805

730

9,500

4,330

5,170

2,000

3,965 1,535

1,270 795-65

NET HIRING REQUIREMENTS TO 2020 BY OPERATIONS TYPE




JOB FAMILY ESTIMATED EMPLOYMENT

IN 2015

HIRING DUE TO NET HIRING REQUIREMENTS TO 2020

(INDUSTRY ACTIVITY + AGE-RELATED ATTRITION)Industry activity Age-related attrition

Total Oil Sands 29,900 5,170 4,330 9,500

Total In situ 10,690 1,270 1,535 2,805

Total Mining 13,870 3,965 2,000 5,965

Total Upgrading 5,330 -65 795 730

Heavy equipment operators and crane operators

4,420 1,305 460 1,765

In situ 50 10 5 15

Mining 4,320 1,290 445 1,735

Upgrading 50 5 5 10

Power engineers 5,165 1,080 590 1,675

In situ 2,755 645 315 960

Mining 790 235 90 325

Upgrading 1,620 200 185 385

Maintenance trades (including supervisors)

4,865 1,170 540 1,710

In situ 1,280 280 135 415

Mining 2,755 820 310 1,130

Upgrading 830 70 95 165

Process, water and waste operators

665 180 85 265

In situ 205 50 25 75

Mining 435 130 55 185

Upgrading 25 5 5 10

NET HIRING REQUIREMENTS BY JOB FAMILY AND OPERATIONS TYPE TO 2020


JOB FAMILY continued

ESTIMATED EMPLOYMENT

IN 2015



Operations and maintenance managers

2,115 480 390 870

In situ 570 120 110 230

Mining 1,135 335 205 540

Upgrading 415 25 75 100

Construction management and support

425 -60 40 -20

In situ 200 -35 20 -15

Mining 135 20 15 35

Upgrading 85 -50 10 -40

Supply chain management and logistics

650 30 90 120

In situ 515 20 70 90

Mining 85 25 15 40

Upgrading 45 -10 5 -5

Engineers (including managers)

4,890 235 565 800

In situ 2,320 55 255 310

Mining 1,500 380 190 565

Upgrading 1,070 -200 125 -75

Technologists and technicians

1,330 20 150 170

In situ 645 -35 75 40

Mining 480 110 55 165

Upgrading 205 -55 20 -30


JOB FAMILY continued


IN 2015



Geoscientists 440 -25 65 40

In situ 260 -25 40 15

Mining 125 25 20 45

Upgrading 50 -25 10 -15

Environmental, inspection, policy and stakeholder relations

790 55 100 155

In situ 460 30 60 90

Mining 180 45 25 70

Upgrading 150 -25 20 -5

Other occupations 4,140 695 1260 1,955

In situ 1,430 155 435 590

Mining 1,915 550 585 1,135

Upgrading 790 -10 240 230


TOP 15 OPERATIONS OCCUPATIONS WITH THE GREATEST NET HIRING REQUIREMENTS TO 2020

Operations Occupations with Greatest Net Hiring Requirements

A total of 15 oil sands operations occupations account for 75% of the sector’s net hiring requirements and are likely to be the focus of company talent acquisition strategies going forward.

Not surprisingly, many of the manager roles are projected to see high rates of retirements and are likely to be the focus

of company succession plans. The sector will also need to pay close attention to the potential loss of engineers due to age-related attrition. Loss of technical experience in the industry is a risk at a time when operations require expertise to drive cost-saving operations efficiencies. The large number of layoffs may also negatively impact the attraction of new entrants who may be considering specialized occupations in the industry.

One other occupation that could see a relatively high rate of retirements is inspectors in public health and environmental safety, which the sector is expected to need to progress its environmental and social performance goals.

Net hiring requirements for all in-scope oil sands operations occupations are included in Appendix 2.

OCCUPATION (NOC) ESTIMATED EMPLOYMENT

IN 2015



Total Oil Sands 29,900 5,170 4,330 9,500


4,285 1,275 445 1,720


5,165 1,080 590 1,670


1,365 375 155 530


1,265 265 235 500



OCCUPATION (NOC) ESTIMATED EMPLOYMENT

IN 2015




1,140 180 210 390

Managers in natural resources production (0811)

790 195 150 345


770 190 90 280


715 180 90 270

Instrumentation technicians (2243)

760 135 80 215


500 145 65 210


440 120 45 165


730 45 70 115


300 35 50 85

Electrical/instrumentation engineers (2133)

555 10 60 70

Purchasing agent and officers (1225)

360 15 50 65

TOP 15 OPERATIONS OCCUPATIONS WITH THE GREATEST NET HIRING REQUIREMENTS TO 2020 (CONTINUED)


For the last decade, Canada’s oil sands sector has experienced significant growth despite previous downward market cycles that have impacted the upstream petroleum industry. With the brisk pace of expansion, however, came rampant cost escalation. As a result, the current downward pressure on oil prices has created an environment that undercuts the potential for further growth and impacts the competitiveness of ongoing operations.

With a 30% decrease in capital spending in 2015, the oil sands sector delayed, deferred or cancelled a number of projects, impacting on-site oil sands construction and off-site modular fabrication workforce requirements that are not expected to recover before 2020.

Likewise, operations expenditures were not spared. Oil sands companies undertook swift and widespread cost-cutting measures including termination of contracts with contingent workforces, renegotiations with third-party service and equipment providers, wage

decreases, and cutbacks to travel and other discretionary spending. Between 2014 and 2015, the oil sands sector eliminated approximately 1,400 (-5%) direct jobs, and there is no certainty that additional cuts will not occur as the sector anticipates a continued low-price environment in 2016.

Amid the current employment picture, where layoffs across the industry continue, the oil sands sector is still projected to require approximately 38,000 peak construction workers annually to maintain efficient operations and to hire 9,500 operations positions (assuming historical retirement patterns continue). To successfully hire the best employees possible for these positions, the historical practice of inflating wages is no longer sustainable in the long term. It will be the ability to invest in innovation that facilitates accelerated technical, environmental and social performance that will enable companies to sustain lower costs when prices do eventually recover.

“As a scientist, I know from experience that when you issue a challenge and encourage smart, motivated, creative people to work on that challenge, great things will happen.” Dan Wicklum, Chief Executive, COSIA (CAPP’s Context Magazine, November 2015)

CONCLUSION


APPENDIX 1: LABOUR DEMAND METHODOLOGIES

OIL SANDS INFORMATION, LABOUR MARKET ANALYSIS AND PROJECTION (OILMAP)The Government of Alberta’s Ministry of Labour has partnered with the Construction Owners Association of Alberta (COAA) to develop a comprehensive labour market information tool called Oil Sands Information, Labour Market Analysis and Projection (OILMAP). The model projects workforce requirements for Alberta’s oil sands sector (mining, in situ, upgrading, module fabrication, turnaround and ongoing maintenance) at an individual and aggregate level.

OILMAP provides insight into the labour force requirements for heavy industrial construction projects, enabling industry, government and other stakeholders to better prepare for workforce planning and policy development.

An outstanding feature of OILMAP is its capability to capture the occupational breakdown of the projected demand and the specific workforce needs for the different sub-sectors of oil sands construction and maintenance projects (in situ, mining, upgrading, turnaround and ongoing maintenance) over the timeframe of the projection.

This numerical workforce projection model is driven by current and announced (planned) oil sands construction projects and incorporates the size, timing and different types of oil sands construction projects to capture occupational labour force demand for 17 key trades over the projection horizon.

In order to project workforce requirements for oil sands construction projects, data sets on current and planned construction projects (size, project start and end dates, type of project and project regulatory approval status) were obtained from oil sands companies.

Through regression analysis, a relationship is established between the project size (capacity) and trade hours to estimate the hours per barrel by project type for construction projects (in situ, mining and upgrading) for the various trades type (electricians, carpenters, etc.). A projection of on-site work hour requirements is developed based on the estimated hours per barrel and using the list of planned projects with their design capacities and durations.

For off-site module fabrication, a relationship is defined between the project size (capacity) and trade hours to estimate the number of modules by project type for different trades. An off-site work hour requirement is projected based on the estimated hours per modules and the list of planned projects with their design capacities and durations.

By factoring in trades timing (per cent of trade hours used at per cent of project schedule), the estimated construction tradespersons’ hours are distributed per project across the project duration. By dividing the tradespersons’ hours per project by the average number of hours that on-site and off-site construction trade workers put in per month, the workforce requirements (persons) per project are obtained. By aggregating the workforce requirements per project and by project type, the total construction (on-site and off-site) workforce requirements for all the planned oil sands construction projects are obtained.

Workforce demand projections for turnaround and ongoing maintenance projects rely on aggregate Alberta data from the General Presidents’ Maintenance Committee for Canada and the National Maintenance Council for Canada with adjustments to account for the role of non-union contractors in maintenance and labour mobility between turnaround and ongoing maintenance.

The methodology and results of the model were validated by industry groups, such as Alberta Council of Turnarounds and Industry Maintenance Stakeholders, Rose Committee, COAA, and individual oil sands companies.

OILMAP projections are based on a list of planned oil sands projects, some of which have yet to receive regulatory approval or board sanction. In this report, workforce projections based on projects that are validated by individual companies and have regulatory approval are presented. The projections may not be matched if initially planned projects are cancelled or postponed.

Additional information about OILMAP can be obtained by contacting:Lance Wilson, Director, Labour Market Intelligence, Workforce Evidence, Engagement, Strategy and Policy, Ministry of Labour [email protected]


PETROLMI’S OIL SANDS OPERATIONS LABOUR DEMAND METHODOLOGY The Petroleum Labour Market Information (PetroLMI) Division of Enform’s labour demand projections are produced using a modelling system developed in consultation with industry and the expertise of labour market forecasting economists and experts.

The modelling system produces projections for the petroleum industry’s:

• Employment: the number of workers required to support the activity levels in a given year (direct employment only).

• Hiring due to industry activity: the projected change in the number of workers required to support industry activity levels.

• Hiring due to age-related attrition: the number of jobs that will be vacated due to retirements and natural deaths among industry’s workforce.

Determining Oil Sands Workforce

In 2015, PetroLMI enhanced its oil sands labour market information by conducting a head count/workforce survey as of December 31, 2014 and incorporating estimates for the first quarter of 2015. Information for the 2010–2014 head count was also collected to enhance the oil sands model and also for validation.

Oil sands operating companies were asked to report their employee head count9,10,11,12 for operation type and employee head count for shared services attributed to oil sands. Both field and head-office roles were included in the workforce survey.

Information was also validated with public financial data where available.

A previous survey conducted in 2011 was used to determine baseline oil sands employee occupational percentages.

Determining Occupational Scope

Based on oil sands head count information, the occupational scope for oil sands labour demand was determined by identifying the occupations/job titles that were most prominent within each company.The most prominent occupations/job titles were then mapped to the 56 National Occupational Classifications (NOC) 2011. An “other occupations” category is used to capture any residual occupations and ensure the total oil sands workforce is accounted for.

Hiring Due to Industry Activity

The model projects an oil sands occupation’s employment growth using oil sands capital spending projections, CAPP’s production forecast (Canadian Crude Oil and Market Outlook, published in June 2015) and productivity assumptions. An “operating and under-construction” scenario was used in this outlook as it best aligns with the oil and gas industry’s announced activity intentions. ARC Financial used the production forecast to guide their own capital spending forecast, thereby aligning the capital required to achieve production that is forecasted.

• The oil sands production and capital expenditures forecast is available by operation type: in situ, mining and upgrading. Therefore, PetroLMI’s labour market model can also project demand by each of those operation types.

• The timing of oil sands employment growth aligns with new production being realized (i.e., oil sands production coming on-stream) and capital expenditure that has been invested. It is important to note the hiring of workers precedes first oil production. Oil sands companies will ramp up hiring to meet production goals and to plan and build oil sands facilities (e.g. mining facilities, in situ wells/facilities and upgrader facilities).

Historical productivity, operationally defined as production volume per employee, was developed based on the production forecast from CAPP and oil sands head count from the 2015 oil sands survey (see to the left). Going forward, forecasts of oil sands productivity improvements were developed in consultation with the oil sands industry. The degree of capital expenditures and production influence on each occupation was used to refine occupational forecasts.

Hiring Due to Age-related Attrition

PetroLMI’s labour modelling system also compares occupation-specific age of retirement to the age demographic of the oil and gas industry’s core occupations to calculate age-related attrition of the oil sands workforce. The number of vacancies created due to age-related attrition is added to the number of positions created due to industry activity to determine net hiring requirements.

9 Head count information included only active employees on a full-time equivalent (FTE) basis. Information on direct contractors and third-party contractors with site access for oil sands operations was mostly unavailable. (Note: contractors are generally contained within other industry segments e.g. construction or oil and gas services).

10 Excluded from head count: Employees on leave, including long-term disability, maternity leave, parental and military leave etc., as well as non-active employees/contractors employees.

11 Only oil sands companies with production/upgrading capacity of 10,000 bbl were surveyed. Public financial and/or government capacity information was used to estimate head count of smaller producers. Other companies surveyed were those projecting to have a large capacity coming on-stream from 2015 to 2020.

12 Response rate for the oil sands survey was 76%, accounting for 96% of oil sands production/upgrading capacity (2014). The oil sands survey non-respondent head count information was obtained from public financial information or model estimation.


APPENDIX 2: OIL SANDS OPERATIONS LABOUR DEMAND OUTLOOK BY OPERATIONS TYPE, JOB FAMILY AND OCCUPATION

NATIONAL OCCUPATIONS CLASSIFICATION (NOC)


IN 2015

FORECAST HIRING DUE TO: NET HIRING

REQUIRE-MENTS

2016 2017 2018 2019 2020 Industry activity

Age-related attrition

Total Oil Sands 29,895 31,870 33,132 35,603 34,713 35,065 5,170 4,332 9,501

Total In situ 10,696 10,887 11,601 11,852 12,108 11,966 1,270 1,534 2,804

Total Mining 13,868 15,264 15,776 18,161 17,334 17,831 3,964 1,999 5,963

Total Upgrading 5,334 5,721 5,757 5,593 5,274 5,271 -63 794 731

HEAVY EQUIPMENT OPERATORS AND CRANE OPERATORS

Crane operators (7371)

46 52 53 58 52 52 6 5 11

In situ 7 7 8 8 8 7 0 1 0

Mining 32 37 38 45 39 40 8 4 12

Upgrading 6 7 7 6 5 5 -1 1 -1


4,285 4,622 4,776 5,473 5,421 5,561 1,276 443 1,719

In situ 10 11 12 12 13 13 2 1 4

Mining 4,246 4,582 4,734 5,428 5,377 5,516 1,270 439 1,709

Upgrading 28 29 30 32 31 32 3 3 6

Supervisors and contractors, heavy equipment operator crews (7302)

90 96 100 110 111 113 22 10 32

In situ 33 34 37 38 40 40 8 4 11

Mining 44 47 49 56 55 57 13 5 18

Upgrading 14 14 15 16 15 16 2 2 3


NATIONAL OCCUPATIONS CLASSIFICATION (NOC) continued


IN 2015


REQUIRE-MENTS



POWER ENGINEERS


5,163 5,399 5,708 6,070 6,165 6,244 1,082 591 1,673

In situ 2,754 2,874 3,113 3,230 3,363 3,401 647 315 962

Mining 791 853 881 1,011 1,001 1,027 236 91 327

Upgrading 1,618 1,672 1,713 1,830 1,801 1,816 199 185 384

MAINTENANCE TRADES (INCLUDING SUPERVISORS)

Automotive mechanical installers and servicers (7535)

128 136 142 158 158 161 33 14 47

In situ 26 27 30 31 32 32 6 3 9

Mining 81 88 90 104 103 105 24 9 33

Upgrading 21 21 22 23 23 23 3 2 5

Automotive service technicians (7321)

51 54 55 60 59 60 9 6 15

In situ 35 36 37 40 39 39 4 1 5

Mining 10 11 11 13 13 13 3 1 4

Upgrading 6 6 7 7 7 7 1 4 5


714 758 793 874 876 893 178 89 267

In situ 200 209 226 235 244 247 47 25 72

Mining 388 418 432 496 491 504 116 48 164

Upgrading 127 131 134 143 141 142 16 16 31




IN 2015


REQUIRE-MENTS



MAINTENANCE TRADES (INCLUDING SUPERVISORS) continued

Electrical power line and cable workers (7244)

6 6 6 6 6 6 0 1 1

In situ 0 0 0 0 0 0 0 0 0

Mining 0 0 0 0 0 0 0 0 0

Upgrading 6 6 6 6 6 6 0 1 1


1,363 1,459 1,515 1,707 1,699 1,738 375 154 529

In situ 164 171 186 193 200 203 39 19 57

Mining 1,072 1,157 1,196 1,371 1,358 1,393 321 121 442

Upgrading 126 131 134 143 141 142 16 14 30


769 815 851 939 941 958 190 92 282

In situ 194 202 219 227 237 239 46 24 69

Mining 418 451 466 535 530 543 125 49 174

Upgrading 157 162 166 177 174 176 19 19 38

Instrumentation technicians (2243)

758 802 841 892 885 894 135 82 217

In situ 363 375 403 415 429 429 66 39 105

Mining 219 240 249 286 274 282 63 24 87

Upgrading 177 187 190 191 182 183 6 19 25

Machinists and machining and tooling inspectors (7231)

9 9 9 10 10 11 2 0 2

In situ 2 3 3 3 3 3 1 0 1

Mining 5 5 5 6 6 6 1 0 1

Upgrading 1 1 1 2 2 2 0 0 0




IN 2015


REQUIRE-MENTS




Power system electricians (7243)

35 75 78 81 80 78 42 4 46

In situ 2 2 2 2 2 2 0 0 0

Mining 16 17 18 21 19 20 4 2 6

Upgrading 18 19 19 18 17 17 -1 2 1

Steamfitters and pipefitters (7252)

184 201 206 220 207 210 26 19 45

In situ 28 29 31 31 32 32 4 3 7

Mining 92 103 106 123 114 118 26 9 35

Upgrading 64 69 69 66 61 60 -4 7 3

Supervisors and contractors, electrical trades and telecommunications occupations (7202)

153 162 171 185 188 191 38 10 48

In situ 73 76 82 85 89 90 17 5 22

Mining 60 65 67 77 76 78 18 4 22

Upgrading 21 21 22 23 23 23 3 1 4

Supervisors and contractors, machining, metal forming, shaping and erecting trades and related occupations (7201)

24 26 27 30 30 31 6 11 17

In situ 14 14 15 16 17 17 3 4 7

Mining 11 11 12 14 13 14 3 5 8

Upgrading 0 0 0 0 0 0 0 2 2




IN 2015


REQUIRE-MENTS




Supervisors and contractors, mechanic trades (7301)

226 237 253 270 276 280 54 10 64

In situ 146 153 166 172 179 181 34 6 40

Mining 58 63 65 74 74 76 17 3 20

Upgrading 21 22 22 24 23 24 3 1 4

Supervisors and contractors, pipefitting trades (7203)

2 2 2 3 3 3 0 0 0

In situ 0 0 0 0 0 0 0 0 0

Mining 0 0 0 0 0 0 0 0 0

Upgrading 2 2 2 3 3 3 0 0 0


442 472 491 550 548 561 119 47 166

In situ 62 65 70 73 76 77 15 7 21

Mining 326 352 364 417 413 424 98 35 132

Upgrading 54 55 57 61 60 60 7 6 12

PROCESS, WATER AND WASTE OPERATORS


501 539 559 633 630 645 144 63 207

In situ 43 45 49 51 53 53 10 5 16

Mining 437 472 488 559 554 568 131 55 186

Upgrading 21 22 22 24 23 23 3 3 5




IN 2015


REQUIRE-MENTS



PROCESS, WATER AND WASTE OPERATORS continued

Water and waste treatment plant operators (9243)

164 171 185 192 199 202 38 19 57

In situ 160 167 181 188 196 198 38 19 57

Mining 0 0 0 0 0 0 0 0 0

Upgrading 3 4 4 4 4 4 0 0 0

OPERATIONS AND MAINTENANCE MANAGERS

Managers in natural resources production (0811)

790 836 879 958 967 984 194 148 342

In situ 321 335 363 376 392 396 75 60 135

Mining 346 374 386 443 438 450 104 65 169

Upgrading 123 127 131 140 137 139 15 23 39


1,267 1,365 1,415 1,551 1,506 1,533 266 237 503

In situ 250 259 278 287 296 296 46 47 93

Mining 727 799 826 950 911 937 211 135 346

Upgrading 290 307 311 314 299 299 9 55 64

Supervisors, mining and quarrying (8221)

60 65 67 77 76 78 18 6 24

In situ 0 0 0 0 0 0 0 0 0

Mining 60 65 67 77 76 78 18 6 24

Upgrading 0 0 0 0 0 0 0 0 0




IN 2015


REQUIRE-MENTS



CONSTRUCTION MANAGEMENT AND SUPPORT

Construction estimators (2234)

67 73 73 69 57 55 -11 7 -4

In situ 32 31 31 30 29 27 -6 3 -3

Mining 19 24 24 29 20 21 3 2 5

Upgrading 16 19 18 10 7 7 -9 2 -7

Construction managers (0711)

356 394 396 386 314 306 -50 33 -17

In situ 170 161 163 159 153 140 -30 16 -14

Mining 118 149 154 182 129 135 17 11 28

Upgrading 68 85 79 44 32 31 -38 6 -31

SUPPLY CHAIN MANAGEMENT AND LOGISTICS

Production logistics coordinators (1523)

7 7 8 8 9 9 2 0 2

In situ 3 4 4 4 4 4 1 0 1

Mining 2 2 2 3 3 3 1 0 1

Upgrading 1 2 2 2 2 2 0 0 0

Purchasing agent and officers (1225)

360 364 383 390 388 377 17 49 66

In situ 337 337 355 358 360 349 12 46 58

Mining 21 24 25 29 25 26 5 3 8

Upgrading 3 3 3 3 2 2 -1 0 0

Purchasing and inventory control workers (1524)

94 97 101 98 95 93 -1 13 12

In situ 68 68 72 73 73 71 2 9 12

Mining 5 6 6 7 6 6 1 1 2

Upgrading 20 23 23 19 16 16 -5 3 -2




IN 2015


REQUIRE-MENTS



SUPPLY CHAIN MANAGEMENT AND LOGISTICS continued

Purchasing managers (0113)

22 22 23 24 23 23 1 5 6

In situ 18 18 19 19 19 18 1 4 5

Mining 3 3 3 4 3 4 1 1 1

Upgrading 1 1 1 1 1 1 0 0 0

Shippers and receivers (1521)

109 117 121 129 120 120 11 15 26

In situ 59 59 62 63 63 62 2 8 10

Mining 42 49 51 59 51 53 11 6 16

Upgrading 7 8 8 7 6 6 -2 1 -1

Supervisors, supply chain, tracking and scheduling co-ordination occupations (1215)

60 64 66 66 62 61 1 8 10

In situ 31 31 32 32 33 32 1 4 5

Mining 14 17 17 20 17 18 4 2 6

Upgrading 15 17 17 14 12 12 -3 2 -1

ENGINEERS (INCLUDING MANAGERS)

Chemical engineers (2134)

567 604 618 623 579 573 6 58 64

In situ 212 209 219 219 219 210 -2 22 20

Mining 96 113 117 137 114 118 22 10 32

Upgrading 259 281 282 267 247 245 -14 27 12




IN 2015


REQUIRE-MENTS



ENGINEERS (INCLUDING MANAGERS) continued

Civil engineers (2131)

80 90 92 95 83 84 4 9 13

In situ 24 24 25 25 25 24 0 3 3

Mining 39 46 48 55 46 48 9 4 13

Upgrading 17 20 19 15 12 12 -5 2 -3

Electrical/instrumentation engineers (2133)

557 610 623 624 568 566 9 61 70

In situ 196 196 206 208 210 203 7 21 29

Mining 174 202 209 243 210 218 44 19 63

Upgrading 187 212 208 172 148 145 -42 20 -21


1,142 1,225 1,276 1,361 1,313 1,324 182 211 393

In situ 482 492 526 538 551 545 64 89 153

Mining 465 520 538 621 576 594 129 86 215

Upgrading 196 212 213 202 186 185 -11 36 25

Geological engineers (2144)

57 70 72 83 64 67 9 5 14

In situ 0 0 0 0 0 0 0 0 0

Mining 54 66 68 80 62 65 11 5 16

Upgrading 3 3 3 2 2 1 -1 0 -1

Industrial and manufacturing engineers (2141)

478 489 512 525 516 504 26 33 59

In situ 412 413 434 439 441 428 15 28 44

Mining 54 63 65 76 66 68 14 4 17

Upgrading 11 13 13 11 9 9 -3 1 -2




IN 2015


REQUIRE-MENTS



ENGINEERS (INCLUDING MANAGERS) continued


731 805 826 852 773 776 44 72 116

In situ 244 244 257 259 261 253 9 24 33

Mining 304 353 365 424 367 380 76 30 106

Upgrading 183 208 204 169 145 142 -41 18 -23

Metallurgical and materials engineers (2142)

46 52 53 54 48 48 2 5 7

In situ 8 8 9 9 9 9 0 1 1

Mining 21 25 25 30 26 26 5 2 7

Upgrading 17 19 19 16 13 13 -4 2 -2

Mining engineers (2143)

192 225 230 249 214 220 28 18 46

In situ 2 2 2 2 2 2 0 0 0

Mining 166 192 199 231 200 207 41 16 57

Upgrading 25 31 29 16 12 11 -14 2 -11

Petroleum engineers (2145)

1,037 1,077 1,102 1,069 997 961 -76 95 19

In situ 740 724 751 748 739 701 -39 68 29

Mining 127 153 158 185 149 155 27 12 39

Upgrading 169 200 192 136 109 105 -64 15 -49

TECHNOLOGISTS AND TECHNICIANS

Chemical engineering technologists and technicians (2211)

181 195 201 210 192 191 10 18 28

In situ 73 72 76 76 76 72 -1 7 7

Mining 59 69 72 84 70 72 14 6 20

Upgrading 49 53 53 51 47 46 -3 5 2




IN 2015


REQUIRE-MENTS



TECHNOLOGISTS AND TECHNICIANS continued

Civil engineering technologists and technicians (2231)

188 213 219 233 201 204 15 24 39

In situ 43 42 44 44 44 42 0 5 5

Mining 111 132 136 159 132 137 26 14 40

Upgrading 34 40 39 30 25 24 -10 4 -6

Drafting technologists and technicians (2253)

152 170 172 169 140 137 -15 18 3

In situ 65 62 64 62 61 56 -9 8 -1

Mining 57 71 74 87 64 67 10 7 17

Upgrading 30 37 35 20 15 14 -16 4 -12

Geological Engineering and Mining technologists (2212)

334 328 337 334 322 304 -30 39 9

In situ 313 303 312 308 302 283 -30 37 7

Mining 14 18 18 21 16 17 3 2 4

Upgrading 6 8 7 5 4 4 -3 1 -2

Industrial engineering and manufacturing technologists and technicians (2233)

50 53 55 58 56 55 5 5 10

In situ 35 35 37 37 37 36 1 3 5

Mining 15 17 18 20 18 18 4 1 5

Upgrading 1 1 1 1 1 1 0 0 0




IN 2015


REQUIRE-MENTS



TECHNOLOGISTS AND TECHNICIANS continued

Instrumentation engineering technologists (2241)

156 171 176 182 166 166 10 16 26

In situ 55 55 58 59 59 57 2 6 8

Mining 65 76 78 91 79 82 16 7 23

Upgrading 35 40 39 33 28 27 -8 4 -4

Land survey technologists and technicians (2254)

32 39 40 43 32 33 2 5 7

In situ 0 0 0 0 0 0 0 0 0

Mining 26 32 33 39 29 30 4 4 8

Upgrading 6 7 6 4 3 3 -3 1 -2

Mechanical engineering technologists (2232)

238 265 272 290 260 263 25 23 48

In situ 59 59 63 63 64 62 2 6 8

Mining 133 154 159 185 160 166 33 13 46

Upgrading 45 51 50 42 36 35 -10 4 -6

GEOSCIENTISTS

Geologists and geophysicists (2113)

438 468 478 482 425 415 -23 65 42

In situ 261 252 260 257 252 236 -25 39 14

Mining 126 154 160 188 145 151 25 19 43

Upgrading 51 61 58 38 29 28 -23 8 -15




IN 2015


REQUIRE-MENTS



ENVIRONMENTAL, INSPECTION, POLICY AND STAKEHOLDER RELATIONS


298 314 328 339 332 332 34 49 83

In situ 173 177 189 193 198 196 23 28 51

Mining 55 62 64 74 69 71 15 9 25

Upgrading 69 75 75 71 66 65 -4 11 8

Natural and applied science policy researchers, consultants and program officers (4161)

190 201 207 212 197 194 4 19 23

In situ 121 120 125 125 125 120 -1 12 11

Mining 48 57 59 69 57 60 11 5 16

Upgrading 20 24 23 18 15 14 -6 2 -4

Professional occupations in advertising, marketing and public relations (1123)

61 63 67 69 69 69 8 8 16

In situ 49 50 53 55 56 55 6 6 13

Mining 7 8 8 9 9 9 2 1 3

Upgrading 5 6 6 5 5 5 0 1 0




IN 2015


REQUIRE-MENTS



ENVIRONMENTAL, INSPECTION, POLICY AND STAKEHOLDER RELATIONS continued

Quality Assurance Analyst (2261)

243 262 270 274 254 253 9 26 35

In situ 116 116 122 123 124 120 4 12 17

Mining 71 82 85 99 86 89 18 8 25

Upgrading 56 64 63 52 45 44 -13 6 -7

Oil and gas drilling, servicing, and related labourers (8615)

4 5 5 5 4 4 0 0 0

In situ 1 1 1 1 1 1 0 0 0

Mining 2 3 3 3 3 3 0 0 0

Upgrading 1 1 1 1 1 1 0 0 0

OTHER OCCUPATIONS

Other occupations 4,139 4,417 4,588 4,931 4,790 4,834 695 1,260 1,955

In situ 1,432 1,456 1,549 1,580 1,611 1,586 154 436 590

Mining 1,914 2,112 2,183 2,514 2,395 2,465 550 583 1,133

Upgrading 792 848 855 836 785 783 -9 241 232


Aggregated oil sands construction: Includes off-site prefabrication and modular construction, on-site construction, and ongoing and turnaround maintenance.

Age-related attrition: Workers leaving their jobs because of retirements and deaths.

Bitumen: Heavy, viscous form of crude oil, often found in oil sand deposits.

Capital expenditures (CAPEX): Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. It is often used to undertake new projects or investments.

Conventional: Process of recovering petroleum from a well using standard drilling production methods.

Employment: The number of workers required to support the activity levels in a given year (direct employment only).

Hiring due to industry activity: The projected change in the number of workers required to support industry activity levels.

In situ: Technique using steam to recover oil from the sand in oil sands extraction.

Labour market: Collective term describing the dynamics and interaction of workers and employers, including employment, unemployment, participation rates and wages.

Labour market information (LMI): Powerful tool to assist oil sands partners with workforce development planning.

Labour supply: Availability of suitable workers in a particular labour market.

Maintenance work: Occurs at the operations site and involves the large-scale shutdown or “turnarounds” of plants for maintenance and equipment replacement to ensure the operations are as efficient as possible.

National Occupational Classification: Developed and updated in partnership with Statistics Canada, the NOC provides a standardized language for describing the work performed by Canadians in the labour market.

Net hiring requirements: Sum of job openings due to industry activity levels and age-related attrition.

Off-site prefabrication and modular construction: Building oil sands operations modules in a plant setting where construction, assembly, testing and pre-commissioning occurs in a controlled environment. Modules are then transported to the operations site for final assembly.

Oil and gas services sector: Contracted exploration, extraction and production services to the E&P sector. This sector includes:

• Drilling and completions services (e.g., drilling and service rigs activities).

• Geophysical or seismic services (e.g., survey, permitting and reclamation, line construction, drilling, and data acquisition).

• Petroleum services (e.g., well services, oilfield construction and maintenance, production, and transportation services).

Oil sands sector: The petroleum industry sector involved in the extraction and upgrading of bitumen.

On-site construction: Assembly and construction work that needs to be completed in the field. In Alberta, on-site oil sands construction takes place in the same locations as ongoing operations.

Operations phase: The extraction, production and upgrading of bitumen, which consists of three operation types: mining, in situ and upgrading.

Operating expenditures (OPEX): A category of expenditure that a business incurs as a result of performing its normal business operations.

Petroleum industry: Global processes of exploration extraction, refining, transporting and marketing petroleum products.

Productivity: Oil sands workforce productivity is tied to the employment drivers of capital expenditures (CAPEX) and production and is based on the number of oil sands employees required to produce a barrel of oil (80% weight) and to manage a dollar of capital spending (20% weight).

APPENDIX 3: GLOSSARY


Sector: Distinct subset of an industry whose components share similar characteristics.

Steam-assisted gravity drainage (SAGD): In situ method of producing heavy oil, which involves two horizontal wellbores, one above the other. Steam is injected into the upper wellbore and softened bitumen is recovered from the lower wellbore.

Turnaround maintenance: Scheduled shutdown of oil sands processing units or plants for overhaul and repairs.

Upgrading: Process by which heavy oil and bitumen are converted into lighter crude by increasing the ratio of hydrogen to carbon, normally using either coking or hydroprocessing.

Workforce: Labour pool available in an industry and/or sector.

LIST OF ABBREVIATIONSCAPEX Capital expenditures

CAPP Canadian Association of Petroleum Producers

COAA Construction Owners Association of Alberta

LMI Labour market information

NOC National Occupation Classifications

OILMAP Oil Sands Information, Labour Market Analysis and Projection

PetroLMI Petroleum Labour Market Information Division of Enform

SAGD Steam-assisted gravity drainage


LIST OF TABLES

TABLE 1: Summary of OILMAP and PetroLMI’s oil sands operations labour demand modelling methodology

TABLE 2: In-scope occupations

TABLE 3: Construction labour occupations with the greatest labour requirements at peak in 2020 by occupation

TABLE 4: Summary of oil sands operations labour demand to 2020 by operations type

TABLE 5: Net hiring requirements by job family and operations type to 2020

TABLE 6: Top 15 operations occupations with the greatest net hiring requirements to 2020

LIST OF FIGURES

FIGURE 1: Oil sands mining, in situ and upgrading operations

FIGURE 2: Oil sands construction

FIGURE 3: Oil sands CAPEX forecast to 2020

FIGURE 4: Oil sands production forecast to 2020

FIGURE 5: Oil sands on-site construction, operations and ongoing maintenance workforce requirements to 2020 (2014 vs 2015)

FIGURE 6: On-site oil sands construction labour demand projection changes (2014 vs 2015)

FIGURE 7: Ongoing and turnaround maintenance labour demand outlook to 2020

FIGURE 8: On-site construction, off-site module fabrication and ongoing and turnaround maintenance workforce requirements to 2020

FIGURE 9: Oil sands operations labour demand projection demand (2014 vs 2016)

FIGURE 10: Mining, in situ and upgrading labour demand to 2020

FIGURE 11: Change in sub-sector share of total growth

FIGURE 12: Net hiring requirements to 2020 by operations type

APPENDIX 4: LIST OF TABLES AND FIGURES


ACKNOWLEDGMENTS

The Petroleum Labour Market Information (PetroLMI) Division of Enform gratefully acknowledges the Government of Canada’s department of Employment and Social Development Canada and the Canadian Association of Petroleum Producers for the funding to undertake and complete this study.

PetroLMI is also grateful for the time and expertise provided by ARC Financial Corp., the Construction Owners Association of Alberta, the Government of Alberta’s Ministry of Labour (OILMAP), petroleum companies, industry associations and other stakeholders.

Last but not least, PetroLMI acknowledges the contributions of Creative Links International Inc., Stacy Kindopp, Dynawise Inc., Prism Economics and Analysis and Projektor Brand Image Ltd. for assisting in the production of this report.

Disclaimer

All rights reserved.

The reader of this report has permission to use “limited labour market information (or LMI) content” for general reference or educational purposes in the reader’s analysis or research reports. “Limited LMI Content” is defined as not exceeding 400 words or a maximum of two data tables or graphs per document. Where Limited LMI Content is used, the reader must cite the source of the Limited LMI Content as follows: Source (or “adapted from”): PetroLMI, name or product, catalogue, volume and issue numbers, reference period and page(s).

The reader of this report cannot: • Market, distribute, export, translate,

transmit, merge, modify, transfer, adapt, loan, rent, lease, assign, share, sub-license or make available to another person or entity, this report in any way, in whole or in part

• Use this report and its contents to develop or derive any other information product or information service for commercial distribution or sale

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The information and projections contained herein have been prepared with information sources PetroLMI has deemed to be reliable.

PetroLMI makes no representations or warranties that this report is error free and therefore shall not be liable for any financial or other losses or damages of any nature whatsoever arising from or otherwise relating to any use of this document.

The opinions and interpretations in this publication are those of PetroLMI and do not necessarily reflect those of the Government of Canada.

For more information, contact:Petroleum Labour Market Information (PetroLMI) Division of EnformPhone: 403-516-8100Email: [email protected]

Back cover photo credits Top left: Syncrude Canada Ltd. Bottom left: Cenovus Energy Inc.Bottom right: Syncrude Canada Ltd.

Copyright © PetroLMI 2016

Published February 2016

The Petroleum Labour Market Information (PetroLMI) Division of Enform is a leading resource for labour market information and trends in the Canadian petroleum industry.

PetroLMI specializes in providing petroleum labour market data, analysis and insights, as well as occupation profiles and other resources for workforce and career planning.

With the support of industry, PetroLMI has developed the Careers in Oil + Gas website to provide its resources and key industry information to those in workforce planning or who are planning and pursuing careers in the oil and gas industry.

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