While other countries debate the benefits of rail, the Kingdom of Saudi Arabia is taking action.

Ask most Westerners about Saudi Arabia and they will likely tell you that it is an oil rich country in the Middle East that is mostly arid desert land with a few big cities. Some might even reference the passion for the Kingdom’s football team or the marvel of industrial cities that have been built from the ground up and highlighted in engineering publications and documentaries.

Now, one has cause to believe that any future description of the Kingdom will include thoughts of a country with one of the most sophisticated rail networks in the world.

  

A recent article in the Arab News by Siraj Wahab takes an in-depth look at the infrastructure improvements being made to the current rail system in Saudi Arabia as well as the new projects underway that will connect eight of the Kingdom’s 13 provinces via a vast network of high-speed lines and a system of tunnels and land bridges by 2015.

(Riyadh) Rail will soon connect the Kingdom.

There are currently five phases of construction on the new network that comprise 7,000 km of track, or about three and two-thirds more track than the current system. The Kingdom’s current system is about 1,500 km long and runs between Riyadh and Dammam on two lines; one for passengers and one for freight. Highlights include:  the Haramain High Speed Rail project that will connect Makkah, Jeddah, Rabigh and Madinah and includes more than 500 tunnels; an expansive land bridge slated to connect the existing network with industrial and business centres across the country; incorporation of a recently completed private line; and a phase called the Gulf Cooperation Council Railway Project that will link Kuwait to Ras Al-Khair, Oman and Qatar.

If that’s not enough, the Kingdom is not ruling out the possibility of future lines that connect all of the provinces and even a line that connects to the European network one day.

Aziz M. Al-Hokail, president of the Saudi Railways Organization (SRO), explains the benefits of expansion and the reasons the Custodian of the Two Holy Mosques King Abdullah approved the massive spend. Al-Hokail references how rail projects have helped interconnect economies in other countries, spurred growth in the form of cities popping up along the lines and the benefits to both commuters and logistics improvements.

He mentions that one need only look at the US or Taiwan as evidence of the benefits that rail has on an economy. There were once vast expanses of empty land along the rail lines in both countries. Now industrial hubs and suburban areas have grown out of seemingly nowhere, much like towns did along rivers in ancient times. A shipment that once took a week by sea will be made in 12 hours via the new high speed rail network, boosting trade in the country as well.

On all levels, rail in Saudi Arabia looks like a no-brainer.  High-speed lines look to diversify an already robust nation and economy. Soon, private shops and consumer-based micro economies may pop up between industrial cities and grow as well.  

With all of the debate around the rest of the world and bickering between politicians and experts about the benefits of rail versus the costs involved, one might be tempted to look at what the Saudi’s are doing and say the time for talk is over. The jobs it creates, enhancements to trade and quality of life of those around a line, not to mention the cost efficiencies once complete, all make rail a viable option. Some say the current rail project might be late in coming to the Kingdom given the advanced networks around the world. Despite the seemingly late entry into modernization movement, the same people might also be saying that come 2015, Saudi Arabia may be the very model for modernization, thanks to rail. Perhaps it will be a lesson for us all.

Is a Recent UAE Recruitment Event a Barometer for the Future of Oil and Gas Employment?

This past year the UAE hosted an unprecedented recruitment event for industry operators. The Energy Recruitment Live Event brought 1,000 industry jobseekers to Dubai. In a region known since the 1960’s as one of the world’s premier oil and gas producers, and a source of equally unprecedented oil and gas engineering talent, holding an event such as this is a sign.  It’s a sign that the global recruitment race has stepped up once again.

Around the same time of the recruitment event, OilCareers.com, an industry job board and a benchmark of the industry’s employment climate, reported that 12,500 new jobs were posted to its website, a 60% percent increase  year over year, with a only a 22% rise in overall applications for those positions. 

Fluctuations and volatility in the price of crude are often a signal to young engineering candidates that a career in the oil and gas market is just as volatile. As the price rises, so does the demand for top engineering talent. As the price moves downward, so does production and employment in the industry.

The real problem stems from the fact that relatively flat oil prices from the 1980’s to early 2000’s made technical oil and gas careers much less attractive to engineering students.  Domestic and expatriate engineering talent is aging and production methods are changing, even in large upstream markets like those here in the UAE. In fact, several mining and production programs were disbanded at Universities and Colleges around the world during that period. The results of the 20 year lull are being seen today. There are not enough engineers to readily address the issue of attrition in the technical sector of the industry.  

Add to that the fact, that with rising oil prices, the conversion of shale and tar sands in North America becomes more feasible. The price on land leases in certain cases have increased “10-fold in the past five weeks” as reported by Bloomberg only a month ago. New technologies related to shale conversion activity involving geosciences, IT and undersea technologies are making careers in those regions more attractive to young engineers. This is largely because, should the speculative shale bubble burst, they have skills applicable to other industries as opposed to the rig engineers of yesterday.

Of course the industry still needs rig engineers badly in the short term; however, recent industry white paper suggests the need will decrease by about 14% by 2018. This hardly instills confidence in prospective students to the trade.

An industry educator recently spoke with one of my colleagues and his comments sum up the problem:

“What was taught in schools 20 years ago is not very applicable in today’s hi-tech industry. In countries where new discoveries are being made like Ghana, Angola and Kazakhstan, while the desire is there to enter the industry, the educational resources are not. We’re helping develop educational programs in these areas and connecting developing markets with experts in the industry to improve the quality and quantity of their engineering talent to help balance supply and demand,” states the Chairman of the Society of Petroleum Engineers (SPE) Talent Council and Professor at London’s Imperial College, Dr. Alain Gringarten.

“In countries where oil is the main industry, everyone wants ‘in’ so finding a number of interested candidates is not a problem. In the Western world, we are competing with lucrative IT careers for young talent. In the UK, it’s the financial sector. When the price per barrel rises, our number of applications for enrollment goes up, when the price goes down, enrollment drops off on a proportionately measurable level. There is a lag in supply and demand of engineering candidates  We’ve mapped the data and the correlation is very strong.”

It’s reasonable to suggest that we are in full “demand mode” for experienced and new petrol industry engineering talent given that we are seeing engineering recruitment events taking place in an area holding about 20% of the world’s reserves.

Recent events spotlighted in the media such as the Iranian embargo and reaction, oil hoarding in Europe and Asia, and the possibility of $5 USD per gallon petrol in the USA also suggest that the race for technical candidates, both new and experienced in the sector, will only get more heated in the future.