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Sectors of industry

Curriculum Topics
• Sectors of industry
• Primary sector
• Secondary sector
• Tertiary sector

Introduction such as Health and Safety. The standards are then developed
into nationally recognised training schemes.
OPITO – The Oil & Gas Academy is the focal point for skills, learning • It works with employers to identify their current and future
and workforce development in the industry, delivering the right skills workforce needs, both in terms of numbers of workers and the
for the industry now and in the future. It works with a wide variety of skills required.
stakeholders to identify and meet the skills requirements for the • It provides effective links between employers and training
global oil & gas industry. These stakeholders come from the industry providers. There are currently 40 Academy-approved training
itself, the government and education. The oil & gas industry’s centres in the UK and a further 60 centres across the rest of the
activities are both upstream and downstream. The Academy was world. However this number is growing rapidly as training
established by businesses in the upstream oil and gas industry. It providers seek accreditation to deliver industry-approved
aims to meet demands for a safe and effective workforce. The standards. Each year over 100,000 of the oil and gas workforce
Academy works with industry employers, training providers, higher are trained in these standards. This helps to bring about
education and partnership organisations to achieve this. consistency in practices and increased workforce competency.
• It provides information about careers in the industry through
The Academy’s funding comes from providing services to employers events, roadshows and its website. It gives advice on the skills
in the industry. It also works with schools, colleges and universities to and qualifications needed for entry into different job roles.
ensure that the learning supply chain meets the skills requirements of • It also provides information on how to access the industry’s
industry. To achieve this the Academy not only promotes the modern apprenticeships.
importance of STEM subjects (science, technology, engineering and
mathematics) to students’ future careers, but also the range and
Employers’ needs
diversity of business-related subjects (business studies, accountancy,
ICT and craft & design) required across the industry. OPITO -
Potential talent The Oil & Gas Skilled workers
The Academy supports the oil and gas industry in a number of ways: Academy

• It shows leadership through setting industry standards. The Learning supply


standards provide a framework for the whole industry in areas
GLOSSARY

Stakeholders: Individual or group with Upstream: The part of the oil and gas Downstream: The part of the oil and Apprenticeships: An agreement with a
an interest in the decisions made by an industry that is concerned with the gas industry that is concerned with worker where a firm provides on-the-job
organisation. exploration and extraction of crude oil refining, selling and distributing natural training in the skills for a particular job or
and natural gas from the ground to the gas and oil products. trade.
pipeline.

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International Business Units deliver the Academy’s work in


28 countries across Europe, the Far and Middle East, Australasia
Wholesale & retail
and the USA. Although based in the UK, the Academy has gained Oil extraction Oil refinement trading of oil & gas
a high profile globally. By raising awareness of the many
opportunities available to young people, the Academy aims to Primary Secondary Tertiary
show how existing skills and qualifications can be transferred into
the oil and gas industry.
The UK economy has changed over the last 200 years. In the
This case study shows the importance of primary sector activities 19th century the economic activity was mostly primary. In the early
in the oil and gas industry, highlighting the range of work and the 20th century, the focus changed to manufacturing. In recent
skills required. times, the UK economy has become more of a service economy.
The service sector now contributes three quarters of the UK’s
Sectors of industry GDP. However the oil and gas industry is still a major contributor
to the UK economy. The production of oil and gas will continue to
The economy is divided into three sectors:
provide 70% of the UK’s energy needs for the next decade. It
• The primary sector involves the extraction of raw materials
supports nearly half a million jobs in the UK and generates around
and natural resources. Examples of this are farming and
£40 billion per year in revenues.
mining, as well as the extraction of oil and gas.
• The secondary sector turns these raw materials into products.
Oil & Gas offers diversity of employment opportunities in the UK
Manufacturing and Construction are secondary sector
and around the world for those interested in technical, engineering
industries. In the case of Oil & Gas this involves the processes
and scientific careers, such as geology, architecture, design and
from refining to delivery of fuel at the petrol pump. The
IT. It also provides opportunities in more creative roles in a wide
production of oil and synthetic petroleum products such as
range of business-related disciplines such as law, accountancy,
lubrication oils and plastics also fall into this sector.
sales & marketing, supply chain, HR and administration.
• The tertiary sector is also known as the service sector. Firms in
this sector provide services to other businesses and consumers.
Oil and gas activities
Goods move through a chain of production. This follows the in the primary sector
goods from the extraction stage, through manufacturing into
Raw materials are extracted in the primary sector. In the oil and
finished products and then on to the consumer. Each stage gives
gas industry this means exploration (finding oil and gas) as well as
added value to the product. The oil and gas industry has a
extraction (drilling for oil and gas). Many skills required in this
related supply chain. In reality, its upstream and downstream
sector may be science or maths-based. However other skills such
processes run across the three sectors. An example of tertiary
as teamwork and problem solving are equally important.
sector activity would be the wholesale (business-to-business) and
retail (business-to-consumer) trading of oil and gas.
The whole exploration process requires different skills at different
stages:
• Geologists and geophysicists search for new oil and gas
reserves. They carry out seismic surveys and create
geological models.
• Production geologists then determine the best way to produce
these reserves to maximise how much oil or gas can be extracted.
• Business analysts use the data acquired to work out the most
cost-effective way of extracting the oil or gas. The analyst team
investigates the costs for different types of production activity
i.e. platforms (e.g. fixed or floating).

Raw materials: Basic material inputs Chain of production: The process by Added value: An increase in the market Seismic survey: An exploration
GLOSSARY

e.g. ores (metal production), grain which a product, starting as raw value of a product. This usually incurs method which uses sound waves.
(bakery products), cocoa (chocolate). materials, moves through the three additional costs. From the point of view
sectors of industry. of the business, value is only added
when the increase in market value is
greater than the extra costs.

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• Once the most appropriate set-up has been approved, Angus McKay is a drilling engineer. He graduated in Mining
production and well engineers will be involved to choose and Engineering and has a PhD in Rock Mechanics. He decided to
set up equipment to start the extraction process. leave the mining industry for a career in the oil and gas industry.
• The Offshore Installation Manager oversees the whole platform He has since worked his way up the career ladder. On the way he
operation. This includes managing people, safety and has gained life experience and a number of new qualifications. Of
environmental issues as well as optimising performance. his job, he says ‘I enjoy every day going to work. It’s a varied and
mentally stimulating job with the high oil price creating a huge
The oil and gas industry relies on innovation to meet current and number of opportunities anywhere in the world.’
future needs of the industry. Research and development is
therefore vital. Product and Process Researchers are often Designing exploration and extraction platforms needs architectural
qualified to postgraduate level. They use their advanced research skills. Designing and maintaining equipment requires specific
skills to ensure new technology and innovative methods keep the knowledge of chemical, design or mechanical engineering.
industry competitive. Technicians working on the oil platforms may enter the profession
• Currently, oil and gas account for 70% of the nation’s energy on apprenticeships; others have degrees and join through
mix. However, there are various projects underway aimed at graduate training schemes.
increasing the amount of green energy produced. This may be
through the use of wind and wave power. John-Robert Eunson was accepted onto a BP apprenticeship to
• There are still significant reserves remaining under the North train as a Mechanical Technician in 2002. He followed a two year
Sea. It is estimated that there are approximately 30 billion college course in Mechanical Engineering with a two year work
barrels of oil – as much as has already been produced. placement on Shetland. He is now working as an Operations
However, these reserves are increasingly harder and more Mechanical Technician for BP whilst studying for a degree with
costly to extract and will require different skills, as well as new The Open University. John-Robert says ‘With the Modern
research and technology to achieve. Apprenticeship you’ve got a trade and work experience. If you go
• Oil and gas companies are also investing in research and on to do a degree, not only do you get the degree qualification at
development services to create carbon capture and storage the end of it, you still have the foundation of knowledge that the
methods. This will help them to meet strict environmental targets. apprenticeship can give you.’

The safety standards set in the North Sea oil and gas industry are
Oil and gas roles in the primary sector
being reinforced around the world. This is thanks to UK energy
Usually people involved in the exploration stage have workers like senior project engineer Bruce Duncan. Bruce is
qualifications in geology, geophysics or petrophysics. Skills in responsible for on- and offshore engineering procedures, pipeline
mathematics, engineering and computer science help develop operations and maintenance. His job has seen him work with
and analyse geological models. people from different cultures around the world. Bruce says,
‘I always take the North Sea safety culture with me when working
abroad and enforce it to the letter. I have never had any crew
member injured in all my time offshore. In my view it has to be
safety first - no compromise.’

Secondary sector and tertiary sector


The secondary sector takes raw materials and turns them into
products. In the oil and gas industry, there are two aspects to
production. The Academy is involved with supporting the skills
required for the ‘upstream’ secondary sector processes (where
the raw materials are extracted).
GLOSSARY

Research and development: Process Carbon capture: Technology that filters


of conceiving, developing and testing out carbon emissions from power station
possible new products or processes. gases before release into the
environment and stores them
underground in depleted reservoirs.

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Douglas completed an honours degree in Business Studies before


getting a job as a Project Engineer in the oil and gas industry. His
day-to-day role involves managing teams of multi-disciplined
personnel who undertake a wide range of maintenance and
construction projects in the oil and gas industry.

Andrew studied for a Business Studies degree and now works as a


Commercial Advisor for Talisman, a Canadian exploration company.
His day-to-day job involves negotiating and implementing legal
agreements. These allow the company to develop oil and gas
reserves. Andrew states that ‘It is hugely rewarding to see that your
However, the oil and gas industry as a whole needs people with efforts have led to the production of oil.’

The Times Newspaper Limited and ©MBA Publishing Ltd 2010. Whilst every effort has been made to ensure accuracy of information, neither the publisher nor the client can be held responsible for errors of omission or commission.
the right skills to get the products to market. These products
include petrol, diesel and natural gas.
Conclusion
Extraction of oil and gas sits within the primary sector. However,
There are several aspects to this part of production:
the oil and gas industry relies on the secondary sector for the next
• Transportation of the oil and gas by pipeline from the drilling
stage in the chain of production. This includes refining the oil to
site. This may be overseen by a Pipeline Engineer.
produce fuel and other products such as wax and lubricating oil.
• Product development is vital to make sure that as much of the
Tertiary sector activities are involved in the trading of these oil and
resources as possible can be turned into usable products.
gas products to businesses and consumers.
Workers in this stage of the chain of production would require
qualifications in chemistry or chemical engineering. OPITO - The Oil & Gas Academy supports the needs of the
People with engineering skills may find they have the abilities to upstream oil and gas industry. The industry offers diverse careers
work in both the upstream and downstream processes. Both ranging from engineering and chemistry to HR, hospitality,
parts are dependent on each other to get the natural resources accountancy and even nursing. STEM subjects play a central part
from sea to land. in the skill sets required for many industry roles. However,
expertise in areas such as marketing, finance or law plays an
The oil and gas industry is not immediately associated with the
important part too. Employees may enter the industry as
tertiary sector other than through petrol station forecourts.
apprentices or as graduates. Research is vital across the industry
However, there are numerous roles which, although considered to
so people with postgraduate qualifications are also of particular
be in the tertiary sector, still serve primary sector activity. These
value.
include finance, contracts and law, human resources, sales and
marketing, or IT. Unlike roles in extraction and production, the
The oil and gas industry provides people with a wide range of
majority of tertiary sector jobs in the industry are based onshore.
transferable skills which can extend career opportunities. For
example, building a foundation for an oil platform or cabling a
Susan is a Gas Trading Executive. She studied for a Maths and
platform to land to provide power uses the same techniques and
Economics degree. Susan’s role is to analyse the UK gas market.
skills as for setting up a wind turbine. The oil and gas industry is
She looks at price, supply and demand, as well as investigating
constantly evolving and OPITO – The Oil and Gas Academy has a
the external factors that affect these. Traders then use this
key role to play in ensuring the future growth of the industry.
information to buy or sell gas in large quantities. Susan says,
‘When I was studying I didn’t even know the oil and gas industry
existed, but now that I am in it, I recognise that it is a very 1. Define the three sectors of industry.
dynamic industry with huge opportunities available. Many people 2. Explain the relationship between the primary and
think the industry is purely engineering focused, but there are lots secondary sectors in the oil and gas industry.
QUESTIONS

of opportunities for people from other disciplines.’ 3. Suggest roles within the oil and gas industry that
would be suitable for school leavers, graduates and
As the global economy is becoming more challenging, the postgraduates.
industry relies on having top quality people in these roles. For 4. To what extent could the activities carried out in the
example, Business Studies graduates would be well qualified to primary sector be considered the most important
work in market research, planning or legal functions. People may
within the oil and gas industry?
also move across disciplines within the industry.

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