Oilpatch employment to see 'modest' recovery next year: forecast

Tough times for Canada's oil and gas industry havetaken atoll on jobs acrossthe sectorbut a newlabour outlookis forecasting "modest"growth in employment beginning next year.

PetroLMI'slabour market outlook released Tuesday saysdirect employment in the sector across Canadais expected to climb to about 176,000 by 2023, rising above2020 levels.

However, the forecast still expects employment to lag below2019 levelswhen 188,800 people worked in the sector.

"We expect to see slight increases in capital spending in 2021," said Carol Howes ofPetroLMI, which tracks and studies labour force data acrosstheoil and gas sector, in a statement.

"Through mergers and acquisitions, we have already seen several layoffs in 2021 and it's expected there will be more workforce adjustments in the months ahead. However, we will see employment beginning to recover in 2022."

The organization, a division ofEnergy Safety Canada, saidthe country'soil and gas industry will need about 19,800 net new workers by 2023. That includes7,800 positions due toindustry activity and nearly 12,000 replacement roles for those who are eligible to retire, assuming traditional retirement rates are to occur.

2020 sped up change for industry already in transition

PetroLMI said the events of the last year only accelerated the pace of change for an industry already in transition and had a significant impact on the sector and its workforce.

Canadian crudeproducers, still recovering from a drop in prices that began in 2014, were hit hard last year by the impact of aninternational oil price war as well as plunging fuel demand as a resultof the pandemic.

There are expectations that fuel demand will again surgeas the pandemic abatesexpectations that helped lift oil prices in the early months of 2021.

Analysts have said higher prices should start setting the stage for the Canadian oil sector to begin rebuilding their balance sheetsby paying down debt and re-establishing any dividends that may have been cut.

PetroLMI saidcompanies are increasingly focusing on profitability over production to unlock value.

"This, combined with the cumulative impacts of the economic downturn that started in 2014, has created a smaller oil and gas workforce ...and one that is not likely to recover to 2014 levels," it said.

The oil and gas services and exploration-and-productionsub-sectors are expected to see some of the largest gains in net hiring with about 13,000 jobs and 6,900 jobs, respectively, over the forecast period.

The improvements are expected to be spurred by liquefied natural gas development,improving commodity prices and some stabilization from the federal government's $1.7-billion investment in cleaning up old oil and gas wells.

"Due to industry consolidation and uncertainty, employment in the oil sands and pipelines sub-sectors is expected to stabilize but not fully recover during the forecast period," it added.