Energy & Mining

From Within

Energy Sector Nationalization

Azerbaijan’s energy sector has not only been lucrative in terms of financial rewards, but also the knowledge transfer to Azerbaijani nationals. Foreign expertise has become less necessary as the oil […]

Azerbaijan’s energy sector has not only been lucrative in terms of financial rewards, but also the knowledge transfer to Azerbaijani nationals. Foreign expertise has become less necessary as the oil and gas industry has developed at a rapid rate. Corporate and government efforts to increase foreign participation in the workforce have been numerous, and by 2018, many foreigners will have made way for local talent.

The aims of the national initiative to increase national participation are not only to provide a greater job market in the energy sector for Azerbaijani nationals, but also to provide an opportunity for them to develop their careers and become valuable assets to their companies.

Schlumberger, one of the key oil and gas service providers in the country, made investment in human capital one of their primary focus areas. Will Grace, General Manager of Schlumberger Azerbaijan, determines that this has provided positive results: “[Schlumberger] has a strong national content regardless of where we work.“ In Azerbaijan, Schlumberger’s workforce is predominantly local, and even the expatriate force has a “diverse mix of nationalities.“

One of the major partners to the oil and gas industry in Azerbaijan is BP. As an operator of both oil and gas fields in the Caspian, including Shah Deniz II that promises to bring energy security to Europe, BP has made plans to increase the local percentage of its workforce. At the end of 2014, BP employed 2,992 Azerbaijani nationals, making up 86% of the permanent professionals in the country. Plans are now to increase this ratio to 90% by 2018.

Energy sector cooperation with training centers, universities, and schools has been increasing to support this goal. Both Schlumberger and ABB, the Switzerland-based provider of power and automation technologies, have signed agreements with Baku Higher Oil School (BHOS) in the last year in order to strengthen the pool of local talent. Will Grace comments that Schlumberger is accustomed to hire “fresh-outs“ from universities, while ABB General Manager for ABB’s oil, gas, and petrochemicals business in the UK, Martin Grady is quoted as saying that “if engineering in Azerbaijan flourishes, then we flourish too.“

BP and SOCAR, the two prominent companies in Azerbaijan’s energy sector have also contributed to professional development. BP has established several training centers such as the Caspian Technicians Training Centre at Sangachal, which has trained over 900 technicians in more than 10 years. SOCAR has also been running a scholarship program since 2006 to help Azerbaijani students to study abroad and develop expertise in a range of fields.

Major steps were taken at the end of 2014 to ensure that progress would be made in the field of nationalization. A November 2014 event hosted by SOCAR, BP, and the State Migration Service was held in order to support the training of young workers and modernize human resources. The most important announcement from the meeting was by the President of SOCAR, Rovnag Abdullayev, who revealed that SOCAR had established its own automated human resources database. Foreign companies have been invited to join in with the scheme in order that, while looking for suitable candidate, companies can use the SOCAR database to look for Azerbaijanis. If no candidate was found, the State Migration Service would be consulted to find a suitable expatriate worker.

This is an important phase in developing the local workforce, and cooperation with the State Migration Service can ensure that the workforce of any energy company is carefully balanced but still highly qualified. An increased number of employees will also be required for the ongoing construction of the Shah Deniz II operations as well, and so the intensified training programs, cooperation with educational facilities, and the new automated database will be highly beneficial not only in supporting Azerbaijan’s current operations, but also in preparing for future operations, especially in the field of gas production.

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