Posted: April 29th, 2018

Impacts of Just Transition Policies on the Future of Oil and Gas Industry Jobs and Reskilling/Upskilling Needs in the MENA Region

Impacts of Just Transition Policies on the Future of Oil and Gas Industry Jobs and Reskilling/Upskilling Needs in the MENA Region
1. Introduction
1.1 Background of the Oil and Gas Industry in the MENA Region
1.2 Definition and Importance of Just Transition Policies
1.3 Significance of Reskilling/Upskilling in the Oil and Gas Industry
2. Impacts of Just Transition Policies on Oil and Gas Industry Jobs
2.1 Analysis of Job Losses and Gains
2.2 Assessment of Job Market Trends
2.3 Evaluation of Government Initiatives and Support
3. Reskilling and Upskilling Needs in the MENA Region
3.1 Identification of Skill Gaps in the Oil and Gas Industry
3.2 Strategies for Reskilling and Upskilling the Workforce
3.3 Role of Education and Training Institutions
4. Future Outlook and Recommendations
4.1 Anticipated Changes in the Oil and Gas Industry
4.2 Policy Recommendations for a Smooth Transition
4.3 Collaboration between Industry Stakeholders and Government Bodies.

Impacts of Just Transition Policies on the Future of Oil and Gas Industry Jobs and Reskilling/Upskilling Needs in the MENA Region
1. Introduction
Definition and importance of just transition policies
A ‘Just Transition’ describes the process of shifting to a low carbon economy in a way that is fair and inclusive, ensuring that the future workforce has access to good quality jobs whilst creating a sustainable economy. Often this term is linked to avoiding and managing the impacts of climate policies, in particular reducing carbon emissions which are associated with environmental damage. As you will find out, this is a term that is becoming more and more important around the world and can be used in many different contexts, from protecting the rights of workers that are aimed at meeting climate goals, reforms in the energy sector, and also policies identified in relation to climate change and the environment. The International Labour Organisation (ILO) stresses the importance of creating an environment in which workers and their representatives feel they have an active role in change and can influence decision-making. Cristiano D’Orsi, Senior Disclosures Officer at the ILO, told me that staff cannot be expected to change the industry unless they feel they have ownership and a proper opportunity to create better working practices. He believes that putting a dynamic and holistic framework for a just transition in place will help employees. Also, Ardern’s (New Zealand) 2018 commitment to embed a just transition into future policies and plans, that aim to shift towards a carbon-neutral economy by 2050, shows that there is an expectation this term will feature. At the United Nations’ 73rd General Assembly, the Secretary-General referred to a just transition in his call to action about the global climate crisis.
Background of the oil and gas industry in the MENA region
The MENA region is home to over 60% of the world’s existing oil and 40% of gas reserves. These resources are located in just a handful of countries, including Saudi Arabia, Iran, and Kuwait, each of which has very low production costs. As a result, the region has become a very important part of the global energy system. It is not just large reserves of oil and gas that have helped the region become a significant player. Major developments in the last few years have included substantial investment in both upstream and downstream infrastructure. This includes enhanced oil recovery techniques aimed at getting more production from mature fields, the development of petrochemical facilities, and new storage and export facilities. These advances have meant increased and more regular incomes from oil and gas exports for the countries in the region. Jobs and wages for workers in the industry have gone up too. For example, in the last ten years, the population of expatriate workers in Kuwait has gone down from 69% of the workforce to 58%. Also, wages and work benefits for locals have improved as companies have had to make sure their workforces are as skillful and productive as possible to take advantage of technological advances. Those benefits have a wider impact on people’s lives as well. Local and national governments have pushed companies in the oil and gas sector to make sure that development and production in the industry is as sustainable as possible. This has meant investment in renewable energy and other cleaner technologies.
1.1 Background of the Oil and Gas Industry in the MENA Region
In particular, countries in the Gulf Cooperation Council (GCC) such as United Arab Emirates (UAE), Saudi Arabia, Qatar, and Oman have been implementing measures to attract foreign investments and reduce dependence on oil and gas through ‘Vision’ initiatives, each outlining long-term economic and development goals. These measures include increasing the number of oil and gas blocks available for exploration and production, offering incentives such as reduced taxes and royalties for foreign companies. Such initiatives are closely linked to a wider trend of energy transition in the global context. Many countries are shifting from fossil fuels to renewable and sustainable energy sources, driven by concerns over climate change and global greenhouse gas emissions. This has caused a significant decline in global oil and gas investments and has put pressure on traditional energy companies to adapt to a more sustainable and diversified energy market. I will talk more about the global energy transition and its impacts on the MENA region in section 4 of this report.
The industry in the MENA region has historically been dominated by state-owned entities, with the private sector playing a relatively minor role. This is particularly true for hydrocarbon exploration and production in upstream activities. Many governments in the region are engaged in nationalization projects, which means bringing foreign investments and private companies under government control. However, in recent years, governments in the MENA region have shown increasing interest in opening up the industry and attracting foreign investments, in line with wider market liberalization and economic diversification efforts.
The Middle East and North Africa (MENA) region is known for its significant oil and gas reserves, which have made it a major player in the global energy market. The oil and gas industry has been a key economic sector in this region, where many countries have built their economies and development plans around these resources. For some countries, oil and gas account for almost the entirety of their national budget, as well as a major portion of their gross domestic product (GDP). These countries rely heavily on oil and gas revenue to fund government services, infrastructure, and social programs. Therefore, any challenges faced by the oil and gas industry, such as fluctuating prices or shifting global demand, can have profound impacts not only on the industry itself, but also on the wider economy and society.
1.2 Definition and Importance of Just Transition Policies
Just transition refers to the creation of new economic and job opportunities in regions highly reliant on carbon-intensive industries or those which face drastic changes in their sites and wider economies as the world moves to a low-carbon model. Such policies should address the need to mitigate GHG emissions and adapt to the new realities of the energy market, whilst also ensuring that social fairness and social justice is delivered. The importance of just transition policies and practices is already becoming evident in the oil and gas sector. For example, the UK has seen a significant reduction in the amount of electricity generated from coal in recent years, as the reality of a legally-binding commitment to reduce CO2 emissions by at least 80% of 1990 levels by 2050 has begun to sink in. The move away from coal to less carbon-intensive sources of energy represents a shift in the composition of the UK’s energy mix and is illustrative of the impact that just transition policies can have on traditional industries. This coincides with the ageing workforce within the oil and gas sector, as well as an industry-wide drive to attract, retain and develop emerging talent. The importance of workforce development strategies and practices, such as training and reskilling, in maximising the benefits to the sector of relevant research and innovation cannot be overstated. As the UKCS and wider oil and gas industry recalibrate towards a low-carbon future, with a renewed focus on economic growth, there is the possibility of introspective labour dynamics and the emergence of a more diverse employment culture. Taken together, the development of a strategically resolute, more youthful workforce through the implementation of CSR-enhanced skill programmes and a focus on the reduced environmental impact of operations can provide an essential segue towards just transition in this sector. Such policies as may be applied by governments around the world can help to ensure that such potential benefits are maximised, in terms of both the industry and the wider economy. For instance, job-reskilling programmes in oil and gas mechanics and well services, tailored to reflect the upswing in demand for renewable energy technicians and long-term exposure to core operational paradigms such as flaring reduction and waste removal. The increased availability of sustainable energy alternatives then serves to benefit the cultivation of a greener workforce, as fresh employment on renewable solutions directs interest toward technological developments therein. This is all encompassed by the socio-economic emphasis put forth by the just transition concept, providing tangible advances for both individual prosperity and global environmental targets. In summary, just transition practices are universally applicable across different regions and industries in their support of climate action and a future-proofed, sustainable economy. Such policies guarantee fairness through comprehensive engagement with, and involvement of, society’s representatives in the sector. No matter the form, be it community-focused initiatives in the renewables space or prominent infrastructure nationwide hanging up of the energy culture, the protection and development of these initiatives will shape the burgeoning, efficient outputs deserved by both the planet and the workforce.
1.3 Significance of Reskilling/Upskilling in the Oil and Gas Industry
Through reskilling and upskilling, the current workforce can develop the new skills and knowledge needed to transition to sustainable job opportunities. Reskilling and upskilling are particularly significant for employees who run the risk of losing their jobs as a result of the energy transition. As the oil and gas industry looks set to decline, it’s clear that transferring workers’ skills from hydrocarbons to renewables work is a priority in order to deliver a just transition. The International Renewable Energy Agency (IRENA) has found that job creation in the renewables sector could offset fossil fuel job losses, and that these new jobs are often highly skilled and more evenly distributed across the country. This suggests that taking the time to properly retrain the workforce will be key to a successful transition; a workforce equipped with the right skills will be central in delivering net zero, whilst taking advantage of opportunities to generate green jobs. Upskilling and reskilling also apply to leadership and managerial positions within organisations. If the oil and gas industry is to achieve a successful transition, it is essential that companies are led by individuals who understand and can work within the changing energy landscape. This might involve anything from short courses in renewable technologies to full master’s degrees completed online. By providing options and pathways for industry leaders, a wider and smoother transition is possible. With a view to ‘buoyant future markets’ in sustainable and renewable technologies, there are likely to be more and more individuals looking to take advantage of the opportunities a green economy has to offer. It’s clear that the wind industry, for example, already provides high-quality jobs that require a range of skills and expertise, and this is reflected across the renewables sector. Workforce development programmes can provide education and training to suit a variety of career pathways, spanning everything from research and development to manufacturing and operations. Employer-driven programmes are also hugely beneficial; by providing training schemes and opportunities within companies, employees can actively prepare for the years ahead whilst making a valuable contribution to their run-on effect. Such a proactive approach from employers is a big plus point for the just transition – the private sector is already heading the way and demonstrating that workers’ potential can be realized, underpinned by ambitious yet achievable strategies for workforce expansion and professional development.
2. Impacts of Just Transition Policies on Oil and Gas Industry Jobs

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