Global Oil & Gas Industry: Human Resources Constraint Contributes to High Oil, Gas Development Cost

Human resource constraint is one factor contributing to higher cost structure in developing oil and gas projects globally, a senior company official from Halliburton said Wednesday at the Offshore Technology Conference Asia 2014 in Kuala Lumpur, Malaysia.

“One of the thing that the [oil and gas] industry need to focus on is we are all resource constraint … The number of students studying traditional subjects [like] geology, petroleum engineering, basic engineering … they have other opportunities in the world today,” according to President and CEO of Halliburton David Lesar, who spoke at a plenary session on “Game Changing Technologies in Offshore Exploration & Production.”

“Some of the cost is being driven by the fact that there is a limited resource pool out there. We all compete for them (and) we have to pay higher compensation. [So] we have to get rewarded for paying that compensation in terms of higher rates and I think that is … driving the [project] cost.”

However when the cost of hiring staff gets too high, contractors and operators are going to invest more on technology to try reducing their dependence on human resource, Lesar added.