For companies working on oil-sands projects, the labor market is incredibly strained and could get worse if more employees aren't brought into the fold, according to Samir Kayande, who manages analytics for Calgary-based research firm Ross Smith Energy Group Ltd.

Kayande says Alberta is 16,000 construction workers short of the number needed within the next two years, and fewer workers can lead to lengthy project delays. For example, he says, the cost of Shell Canada's Athabasca Oil Sands Expansion One has almost doubled, and is stretched out by an additional year. Full project staffing has been delayed one year for Canadian Natural Resources' Horizon project. And, Enerplus Resources reports the Total SA-operated North Mine project start-up will be delayed by two years, to 2013.

"One way of increasing the pool of available construction workers is to adapt the industry's long-established practice of using extended work-rotation schedules in remote locations," Kayande says.

This method requires two employees for every position, working in rotation. In Kazakhstan, for example, a common rotation schedule is 28 days on, 12 hours per day, followed by 28 days off, allowing the project to operate 24/7. Current oil-sands construction shifts usually consist of 10 days at 10 hours each, followed by four days off.

Shorter rotations could work in Alberta, such as the 14-day rotations used in Alaska and the Gulf of Mexico. The key is to achieve continuous site-construction and staffing.

"For workers choosing to commute to Fort McMurray and other isolated oil-sands project areas, this system has distinct appeal compared with the present way. Trades would have six months off annually, in addition to the generous compensation packages." Longer rotation schedules could also be particularly attractive to workers from farther away, he adds.

Project-cost escalation averages 17% per year on oil-sands projects, he adds.



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