Future Skills Needs in the Petroleum Sector for Green Economy Transition

1. Presentation to CHIETA colloquium13 February 2014

2. PRESENTATION OUTLINE The Presentation is to highlight Future Skills needs for the Petroleum sector with reference to Green economy Contents: • SAPIA overview • What is the Green economy? • What are the drivers for Skills development? • Development in Sector and impact on skills • How Industry is responding to the changes?

3. SAPIAoverview • SAPIA’s objectives are to: • understand the needs of its stakeholders; • provide expert information and assistance to government, the petroleum industry and all South African citizens; • contribute to policy formulation; • promote transformation, environmental leadership and a fair regulatory framework for all; • facilitate security of supply; and • enhance the reputation of the industry by communicating its contribution to economic and social progress.

4. FASTFACTS • The South African petroleum industry accounts for: - 6.48% contribution to the national GDP; - R267 billion in turnover; - R54 billion in duties and levies; - R6 billion in capital expenditure; • R4 billion in annual payroll; • more than 100 000 jobs (direct and indirect employment); - R3 billion in income tax; and - R99.5 million spent by SAPIA member companies on corporate social investment projects during 2012.

5. SAPIAMembers

6. Green Industry Issues • Products made with strict acknowledgement of the ecological limit of environment: • Clean energy consumptions • Green operations will result in increased focus on Energy efficiency, • Efficient Waste management and Sustainability • Implies focus towards innovation

7. GREEN ECONOMY Green economy affects skills due to the fact that: • The Green economy will result in change in skill profile of staff. • New technology needs new skills. • Skill development and adaption • Skills set change

8. BIOFUELS ROLL-OUT • Mandatory blending of biofuels with petrol and diesel:1 October 2015 • Job creation potential :Stimulation of rural economy • Mabele Project: Sugar cane:bioethanol sunflower:diesel Will require research support • Potential employment agriculture

9. SKILLSIMPACTGREENECONOMY Green economy will have impact on jobs hence skills project: • Dialogue is happening first at employer level to look at needs and identify gaps • Next focus will be training providers to close any identified gaps to ensure training offer meets needs of the green economy • New curricula ,funding models to address needs • Integrated approach

10. SOME KEY QUESTIONS • How does the ‘Green economy” affect the Petroleum Sector? • What impact is it likely to have on future industry developments? • What implication is it expected to have on the skills requirements. • What new jobs / research streams will result from Green Jobs?

11. DRIVERS of NEW SKILLS DEVELOPMENT AGENDA • Constitution of South Africa Section 24 • King 3 Report on Good governance • Implications of Potential Developments in Upstream Activity in South Africa • Implications of Upstream Developments in East and West Africa

12. Constitutional Requirements and King 3 • Section 24 (c): Guarantee for a Safe and Health environment • OSHACT +Regulations • Environmental Regulations • King III Corporate Reporting. • Apart from financial performance what are we doing to the environment • Goal; is to ensure resources are used sustainably

13. IMPLICATIONS OF CONSTITUTIONAL REQUIREMENTS • NEED TO REDUCE POLLUTION • SUSTAINABLE USE OF RESOURCES • TRANSFORMATION OF INDUSTRY • EFFECTIVE HSSE PROGAMS • EQUIPMENT INTEGRITY RELIABILITY MONITORING • PREDICTIVE MAINTENANCE

14. SAPIA ‘S OBJECTIVES • Deploy staff who are able to operate and maintain equipment in our operations to guarantee a safe and health environment • Deploy staff who are able to re-engineer process operations for better utilisation of energy • Introduce innovative techniques to ensure sustainability of resources • Provide support employment in Biofuels sector by initiatives such as supplier development.

15. NEWDEVELOPMENTS • E&P in Upstream in South Africa. • Need for Research and New professional skills. Need to refocus research thrust in universities: support black researchers • E&P East and West Africa: potential skills flight • Potential Production Stage :maintenance, operations and reliability • Thousands of technical skills required at all levels (engineering ,projects, HSSE)

16. IMPLICATIONSFORDOWNSTREAM • The drive towards the Green Economy implies changes in the way some process operate • Equipment condition monitoring • Energy re-use • Reskilling technical staff • Overlap of staff needs with Upstream implies a serious staff shortage in future

17. HOWISINDUSTRYDOING • Audit technical skills capacity in member companies based on past research. • What are the current capacities? • What are the uptakes for technical staff at all levels? • What gaps are identified in training? • Are there any unique requirements?

18. TRAININGINSTITUTES , • Engage training providers at all levels based on employer requirements - What content is on offer and how can it be optimised to meet the needs of green economy? - What research streams can we create to meet the needs of both upstream and downstream? • How can faculty be capacitated to better deliver what industry needs? • Re-design training systems around needs

19. EXPERIENCEFROMBRICMEMBER • Bulk of technical training managed by private companies and employer association • Faster response to changing needs of employer • Stronger association ensures relevant curricular • Easier articulation with professional association

20. POSSIBLE RESPONSE • Industry to support and participate in focused research activity which support operations • Financial support essential to attract researchers • Support for new program roll-out by offering practical work • Open doors for academics to conduct company research and practical training

21. POSSIBLERESPONSE Industry to support and participate in focused research activity which support industry • Financial support essential to attract black researchers • Support for new program roll-out • Open doors for academics to conduct company research and practical training

22. POSSIBLE RESPONSE • Increase Graduate intakes. Engage ECSA to access skills of retired technical staff to support new graduates(340000 unemployed vs 470000 vacancies) • Share information with other sectors to address undersupply or oversupply • Articulation : Dealing with Graduation rates -1 in 4 students graduates within timelines. • Industrial advisory committees at all levels of learning institutes. Research support • Central graduate database

23. POSSIBLE RESPONSE • Mandatory professional institute involvement in post-university training • Efficient sharing of undersupply and oversupply • New funding model for skills development • Development of skills development framework

24. Contact details Bhekizwe Dlodlo Skills Development Project Cell: +27 (0)720252963 Fax: +27 (0)11 783 5400 Email: bheki@sapia.co.za Physical address: Hunts End, The Lodge, First Floor 38 Wierda Road, West Wierda Valley, Sandton, South Africa