Expectations for hires and pay rates in theoil and gas industry ( H2 ) July - December 2011
Contents                                  Introduction                                    1                               ...
Introduction      Welcome to the second 2011 edition of the Workforce                       Economically, we have sustaine...
H2 (2011) Survey Summary    Air Energi and OilCareers.com would like to thank all organisations and participants    who to...
Africa      “ Nigerian rates have typically been                                       infrastructure promises to create u...
Americas    “When senior staff retire they are                                        be in the right job and you can very...
Americas      one of Columbia’s worst natural disasters, has been estimated          number of direct hires to manage thes...
Asia Pacific    “Mentoring of local staff is helping                                       arduous licensing processes and...
Asia Pacific      Given the mounting pressure for subsea and LNG equipment                technical schools. Vietnam has f...
Australasia    “Several major concurrent LNG and                                         PNG    mining projects are puttin...
Caspian       “Localisation forcing companies to                                       moment appears to be on track with ...
Europe     “There is a shortage of trained                                        assets, as potentially diverting investm...
Middle East      “Most contractors 55+ would rather                                      Australia and Asia Pacific. Of th...
Regional Comparisons     Key         Increase                                      Decrease                               ...
Regional Comparisons      Key               Increase                                     Decrease                         ...
Workforce Survey H2
Workforce Survey H2
Workforce Survey H2
Workforce Survey H2
Workforce Survey H2
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Workforce Survey H2

  1. 1. Expectations for hires and pay rates in theoil and gas industry ( H2 ) July - December 2011
  2. 2. Contents Introduction 1 Survey Summary 2 Africa 3 Americas 4-5 Asia Pacific 6-7 Australasia 8 Caspian 9 Europe 10 Middle East 11 Air Energi Overview 12 OilCareers Overview 13 Regional Comparisons 14-15 Contacts 16 Copyright @ Air Energi Group Limited Disclaimer: The Air Energi, OilCareers.com H2 Workforce Survey 2011 is representative of an added value service to clients and candidates. Whilst every care is taken in the collection and compilation of data, the survey report is interpretive and indicative not conclusive. Therefore information should be used as a guideline only. www.airenergi.com
  3. 3. Introduction Welcome to the second 2011 edition of the Workforce Economically, we have sustained sector growth at a manageable Survey and Report produced in partnership with pace. Environmentally, we have scrutinized operations and regulations for riskier projects worldwide. Our shared responsibility Oilcareers.com, we are pleased to inform our tocreating an and share resources, knowledge personnel, whether cooperate increased demand for qualified and best practices readers that through this partnership we have nearly local or expat. Subsea talent remains in high demand and likely to will be especially important enter a new era of energy production, increase once Angola gets its own pre-salt exploration programs tripled the number of survey responses over the last markets and New labour is in this spirit thathave been implemented underway. demand: it reform measures we present this edition edition., our sincere thanks to all those who took the ofrecently, geared toward improving working are proud of this our Global Oil and Gas Workforce Survey. We conditions and publication government transparency in the to and gas sector, the improvingas it represents our commitment oil thought leadership time to respond. backbone of the Angolan economy. and involving our clients closely in everything we do. The familiar refrain of “recruitment and retention,” long the Nigeria cornerstone of HR policies worldwide, will need to add a third The Nigerian government has component in the coming years: “training.” Emergent technologies recently approved a $3.5 billion national electricity grid to put in LNG and increasingly technical offshore plays in relatively an end to the country’s chronic remote corners of the world will demand the very best from power Ianshortages. M Langley Ironically, today’s senior project teams and skilled trades. We’ve observed Group Executive Chairman Nigeria seeks to raise much of the several unique contingency plans being rolled out by international capital required through foreign ilangley@airenergi.com and national oil companies to ensure the requisite workforce is partners, in exchange for which the on behalf of Air Energi government promises increased available, but it’s universal that more needs to be done. operational transparency and above-board administration. Proposed timelines are to have the new ‘supergrid’ completed by 2014; specialised subsets from local oil and gas exploits may migrate to this groundbreaking project. We are delighted to work with Air Energi once again has resulted in the import and export of skilled personnel but where in the past this has lead to contractors demanding increasingly to produce this second, mid-year edition of the Yet another federal election is threatening to backburner the higher fees, Petroleum IndustryUS, the candidate-driven market is proposed in the likes of the Bill (which would effectively rewrite Workforce Survey. forcing a cap on contractor rates as operators are with IOCs) staff the legal and fiscal basis of Nigeria’s relationships favouring once positions potentially delaying billions of dollars in energy industry more, and building strategic alliances with specialist recruiters The global oil and gas industry continues to experience something in investments. Until fully revealed and understood, the controversy order to implement project teams more quickly. of a rollercoaster journey – not just in terms of fluctuating oil and surrounding the Bill will result in a slowdown in some major projects, gas prices, but also with regard to political unrest and natural operators opting to remain in holding pattern until it is known what Where we move now is into a period where the established disasters - all of this impacting on hiring trends. This latest report oil and gas centres of the past 10 – 20 years are competing for does reflect that the guarded optimism experienced across the skilled personnel with emerging markets where governments are industry in 2010 is set to continue as worldwide investment is embracing new industry. However, the challenge that remains is ramped up across the remainder of 2011. how to ensure that the next generation is trained and ready to take advantage of these opportunities. As a result of this upturn in activity, oil and gas employers are looking to fill new positions, particularly in the fields of specialist engineering and in the subsea sector. Venturing into new frontiers in shale gas and deep water, matched with increasing demand for LNG and the huge potential reserves identified in the likes of Columbia, Angola and the Barents Sea brings a number of cultural, environmental and skill-based challenges. Mark Guest Managing Director The shortage of technical skills across the industry and the ability mguest@oilcareers.com to train the next generation is vitally important. Global demand on behalf OilCareers.com© Air Energi 2011 www.airenergi.com 1
  4. 4. H2 (2011) Survey Summary Air Energi and OilCareers.com would like to thank all organisations and participants who took the time to respond to and influence our survey and report. The returns clearly show a substantial response from decision makers and industry insiders across all the oil and gas producing regions. We are pleased to present the findings in this report for our industry partners to utilse in their future decision making. • 13,000 + oil and gas professionals were invited to participate • 5,500 + were either direct recruiters or senior decision makers • Over 45 countries represented in 7 major oil and gas producing regions Regional Responses Chart Regional Responses Australasia Middle East 16% 19% Caspian/FSU 8% Africa Americas 8% 17% Europe APAC 20% 12% Percentage of responses from each geographical region Global Regional Comparison H1 = statistics/predictions for the first half of the year, H2 = statistics/predictions for the second half of the year. Salaries and pay rates Hires Increase Decrease No Change2 www.airenergi.com © Air Energi 2011
  5. 5. Africa “ Nigerian rates have typically been infrastructure promises to create up to 500,000 jobs for Nigerians, as well as bolstering and diversifying domestic energy production and on the high side for the region but supply. Nigeriaincreased to have the largest natural gas reserves in creating an is known demand for qualified personnel, whether are falling now due to the influx of Africa, though it lacks adequateremains in high demand and likely to local or expat. Subsea talent infrastructure to capitalise on them; increase once Angola gets its own pre-salt exploration programs with its “Master Gas Plan”, Nigeria aims to position itself among the candidates from the Middle East” world’s top naturallabour reform measures have been implemented underway. New gas producing countries. recently, geared toward improving working conditions and Regional Overview Oil majors government transparency in the oil and gas sector,the improving continue to observe Nigerian prospects from the One thing remains certain in Africa, uncertainty. As far as emerging backbone of the Angolan economy. sidelines until the impact the infamous Petroleum Industry Bill (PIB) regions go, there is tremendous potential scope in Ghana, South will have on revenue and taxation arrangements are known. Recent Africa, Mozambique, Nigeria, Angola and elsewhere, but most elections and a new senate threatened to pull the debate over the Nigeria places continue to experience a track record of poor infrastructure, Bill back to square one, causing recently approved a exceptions The Nigerian government has additional delay, but $3.5 billion corruption in the ranks, civil unrest and violence. Basic day-to-day were made to allow grid legislation to continue along its current national electricity the to put an end to the country’s chronic challenges such as quality of life, living costs, personal security course. shortages. Ironically, Nigeria seeks to raise much of the power are major barriers to mobilising personnel here, and the poor capital required through foreign partners, in exchange for which rates, almost on par with the North Sea, are not helping attract Following a relatively quiet increased operational transparency and the government promises quarter one leading into the elections, better paid personnel. Even for those thrill-seekers up for the activity has since picked up dramatically. Besides pressure have the above-board administration. Proposed timelines are to for local experience of a stint in Africa, localisation policies restrict transfer content, the challenge faced by most corporations is convincing new ‘supergrid’ completed by 2014; specialised subsets from local across much of the region. qualified gas exploits may migrate to this groundbreaking project. oil and expat personnel to accept contracts in Nigeria. Once passed, the PIB will usher a major influx of work in the region, increasing demand across the threatening to backburnerand Yet another federal election is board. Subsea, Safety the Angola Environmental expertise remains in(which would effectively rewrite proposed Petroleum Industry Bill high demand, and expect the In what should be a seamless process, many EPCs are reporting budding local naturalbasis industry to be a further tap on qualified the legal and fiscal gas of Nigeria’s relationships with IOCs) once to be experiencing difficulty getting paid out of their Angolan LNG personnel in already short supply worldwide. energy industry more, potentially delaying billions of dollars in clients. Corruption and opacity is seemingly pervasive, according to a recent World Bank report, nearly 76% of firms (the second- investments. Until fully revealed and understood, the controversy most in the world) operating in Angola identify corruption as a Your Expectations as aslowdown in some major projects, surrounding the Bill will result in a Region major constraint to doing business there. operators opting to remain in holding pattern until it is known what real effect the bill will have on corruption and security concerns. In spite of these challenges, discovery announcements keep Africa Salaries pouring out of Angola as rapidly as the oil itself, so there appears to be no shortage of work ahead for the country. Exploration in 38% Angola’s pre-salt reserves continues apace, competing with 54% Brazil for the highly specialised experience in this emergent field. Other discoveries and major fields are coming into production, 8% notably Total’s deepwater Pazflor field. ExxonMobil and state- owned Sonangol were recognised for their industry leadership Increase Decrease No Change at this year’s Offshore Technology Conference. Their “Design One, Build Multiple” approach has yielded both operational efficiencies as well as provided solid opportunities for local Africa Hires Angolan employment. FEED, Subsea and Safety work remains in high demand into 2011. 58% Nigeria 30% Nigerian National Petroleum Corporation recently ranked rock- 12% bottom by two corporate transparency watchdog groups. Yet Nigeria is making small steps to ground its energy sector and Increase Decrease No Change improve administrative transparency. A recently announced plan to construct extensive gas, fertilizer and petrochemical plants and© Air Energi 2011 www.airenergi.com 3
  6. 6. Americas “When senior staff retire they are be in the right job and you can very quickly have a less-than-optimal local workforce. Will this in fact be the reality for Brazil as it seeks almost always backfilled by tocreating an last opportunity for itself out of its natural resource eke every increased demand for qualified personnel, whether contractors.” bounty.or Unemployment talent remains in high demand and several local expat. Subsea is at an all-time low, and whilst likely to commitments by Angola gets its own pre-salt exploration programs increase once foreign corporations to create local operating and technologicalNew labour reformhave been have been implemented underway. training centres measures made, the demand for Regional Overview engineering geared toward expertise in-country isconditions and recently, and construction improving working staggering. Overall, the Americas are riding the wave of high oil prices and improving government transparency in the oil and gas sector, the high global demand, with many countries seeing double-digit Demand for of the Angolan economy. in Brazil are set to increase backbone major offshore installations growth in rig activity year on year. Of note, particularly for the as Petrobras tries to trim as much as possible from its pre-salt region, is a more resilient US economy, buoyed by increased exploration costs, the majority of which will likely be constructed Nigeria activity and confidence in the energy sector in terms of oil prices atThe Nigerian $1.7 billion shipyard, the largest of its kind in the Brazil’s new government has recently approved a $3.5 billion and domestic production with the moratorium lifted in the Gulf of Americas. The shipyard is to put an endcreate 3,500 construction national electricity grid anticipated to to the country’s chronic Mexico and increasing momentum in shale gas plays. jobs with shortages. Ironically, during the construction phase. Local power an additional 10,000 Nigeria seeks to raise much of the content (of 55% tothrough foreign partners, firm focus here, to the capital required 65% overall) remains a in exchange for which Regional NOC’s have all announced aggressive investment plans extentgovernment promises increased operational transparency and the that even state-owned Petrobras was reported to have been to boost production and domestic supply out of the Americas fined by authorities for not utilising adequate Brazilian-supplied above-board administration. Proposed timelines are to have the totaling some $440 billion over the next five years. Heavy Chinese materials. In spitecompleted by 2014;other incentives being offered new ‘supergrid’ of tax breaks and specialised subsets from local investment continues here, particularly in support of Venezuela’s tooil and gas exploits maypartners to is ultimately up to industry to international business migrate it this groundbreaking project. vast Orinoco reserves and Brazil’s burgeoning pre-salt exploration. find a way to play by the rules in Brazil’s massive pre-salt game. If momentum in shale gas exploration and extraction continues, Yet another federal election is threatening to backburner the expect to see Argentina and Colombia move in for their share of the South American energy spotlight. FEED and construction Canada Petroleum Industry Bill (which would effectively rewrite proposed the legal and fiscal basis of Nigeria’s relationships with IOCs) once Development of Canada’s exploits offshore east coast have slowed work in support of new exploration and production facilities and more, potentially delaying billions of dollars in energy industry back to typical levels with the delays on the Hebron project, the pipelines is driving employment in the region. investments. Until fully revealed and understood, the controversy vibe is still positive though somewhat less manic. Activity will ramp up dramatically in 2012 when a slowdown in some major detailed surrounding the Bill will result in the project moves into projects, Argentina engineering,opting to the work back into pattern until it from Houston. operators bringing remain in holding local markets is known what Just 10 years following a serious economic meltdown, Argentina Although things bill will have on corruptionis still continuing, and the real effect the have been delayed, work and security concerns. now ranks at Latin America’s number three economy, its nine press to bring Newfoundlanders back home from Alberta and other per cent growth in 2011 the product of strong manufacturing and global points is ongoing. automotive sectors. The outlook may well be even rosier in the coming months: several major discoveries made late last year Western Canada continues its upward trend, albeit also building signal an extremely busy time ahead for Argentina’s energy sector. later than anticipated in early 2011, but the net result is that the Home to vast reserves of unconventional gas and shale oil, the trajectory will be steeper over the next six to 12 months. As with Neuquén basin is the current hotspot in Argentine energy E&P. other markets on swift rebound such as Australia, the level of Analysts suggest the technologies being developed here may activity post-recovery is expected to eclipse that of pre-recession. prove to be industry trend-setting. Musings of relaxed immigration Labour markets at both ends of the country are continuing to policies to allow for full technical support of these explorations have tighten, with subsequent rate expectations creeping upward. It is yet to surface, though with sector activity picking up so dramatically becoming increasingly a candidates’ market. Employers, however, across South America it’s unlikely Argentina will allow itself to are doing all they can to keep downward pressure on rates; those be left in the dust. The next round of federal elections is due in that are holding tighter to this strategy are losing more and more October, and whilst left-leaning president Cristina Fernandez may potential starts to other opportunities either in Canada or elsewhere. not have the full support of unions and public sector workers, she Project Controls and Project Services remain in high demand, as also cannot afford to alienate much-needed foreign investment. do Construction, Civil and Electrical disciplines. Subsea expertise here, as elsewhere, is in dire need. Brazil Overly protectionist labour policies have been found to deter Colombia employment growth more so than protect against unemployment, Colombia is not the only nation to have fallen victim to natural compound this with the risk that the right people may not in fact disaster this year, the damage caused by months of heavy rains,4 www.airenergi.com © Air Energi 2011
  7. 7. Americas one of Columbia’s worst natural disasters, has been estimated number of direct hires to manage these costs near and long term. to cost billions and take years to rebuild. Everything from towns Several EPCs have also been trending towards ‘recruitment process to roads, agriculture to mining has been affected. Civil unrest outsourcing’ as temporary extensionsqualified HR departments to creating an increased demand for of their personnel, whether may be further fuelled if proposed reforms to alter the distribution ramp up project Subsea talent remains inefficiently. local or expat. teams more quickly and high demand and likely to of oil and mining revenues among provinces are successfully increase once Angola gets its own pre-salt exploration programs passed, posing a potential threat to industry operations here. Rebels are still flexing their muscles against energy and mining Venezuela labour reform measuresworking conditions and underway. New recently, geared toward improving have been implemented President Chavez finds himself in a dilemma at the moment as its operations: pipeline and railroad bombings and kidnappings have improving government transparency in the oil and gas sector, the election year. Desperate for investments to fully ignite development all been reported in recent weeks. Government interventions to backbone of the Angolan economy. of its vast Orinoco reserves, particularly when oil prices are so high, keep inflation low, redistribute the wealth earned from resource the administration must maintain some veneer of being cooperative royalties, and amend relations with its labour unions – and in toNigeria outside financial commitments. Still, there is the persistent entice general maintain a favourable investment climate are just a few of threat Nigerian government has recent cash grab ina the form of The of nationalisation, and a recently approved $3.5 billion the obstacles to overcome in the months ahead. national windfall taxes onto put an end to the country’s chronic electricity grid revenue earned by foreign oil companies additional with operations in Venezuela are majorseeks to raise much ofat a power shortages. Ironically, Nigeria deterrents, particularly the In spite of this, oil production hit record highs in Colombia at the capital required through foreign partners, in exchange for which time when regional neighbours Colombia, Argentina and Brazil hold end of quarter one of this year, and is in sight of a targeted one great government promises to be far safer choices.transparency and the potential and appear increased operational million barrels per day by the end of the year. Colombia has also above-board administration. Proposed timelines are to have the set ambitious goals for coal exports, putting plans in place to Promises to create 3.5 million jobs in construction, from local new ‘supergrid’ completed by 2014; specialised subsets oil, and improve infrastructure and reduce shipping bottlenecks. Having farming are resonating well with the this groundbreaking project. oil and gas exploits may migrate to still-beleaguered Venezuelan auctioned off dozens of blocks and signed hundreds of E&P population. Hikes to minimum wage have also been made recently. contracts, Colombia is more than prepared to accept outside Nationalisation federal election is threatening to backburner the Yet another has historically been Chavez’ preferred method investment, the question remains whether its immigration policies ofproposed Petroleum Industry foreign companies setting up shop job creation, but with fewer Bill (which would effectively rewrite will be equally accepting of foreign expertise to operate and across all sectors, his administration relationships with IOCs) once the legal and fiscal basis of Nigeria’s may actually have to roll up manage these developments in a timely fashion. their sleeves and figure out abillions of dollars in energy industry more, potentially delaying way to get the job done themselves. investments. Until fully revealed and understood, the controversy Increasingly, mainstream candidates out of Venezuela such as USA Project Controls have been lessaprominently coming to market of surrounding the Bill will result in slowdown in some major projects, operators opting to remain in holding pattern until it is known what late. Following a host of recent economic and public relations real effect the bill will have on corruption and security concerns. batterings, it’s finally good news for the energy sector on many fronts in the United States. The industry breathed a heavy sigh Your Expectations as a Region of relief as a notable increase in drilling permits for the Gulf of Mexico have been issued of late, though much of the equipment Americas Salaries has since been deployed elsewhere in the world. Design work out of the US has thus picked up significantly, both in support of 47% offshore new builds as well as LNG projects here and abroad. 51% North American natural gas reserves may not be sharing the 2% spotlight to the same extent as those in Qatar or Australia, but with the massive increase in global appetite for LNG developers Increase Decrease No Change in the US are getting in front of the trend as much as possible. LNG import terminals onshore United States that have sat largely idle for the past several years are now being converted to export Americas Hires terminals. Here, as elsewhere, top LNG expertise is sorely needed to develop the massive Marcellus fields and related production and supply infrastructure. 64% 28% Overall, the US is becoming more of a candidate-driven market, 8% though rates remain largely balanced for the moment. Employers are taking a more guarded approach to manpower costs, rather Increase Decrease No Change than enforcing caps on contractor rates, many are increasing the© Air Energi 2011 www.airenergi.com 5
  8. 8. Asia Pacific “Mentoring of local staff is helping arduous licensing processes and other administrative hurdles have historically been to blame. In response, the Indonesian government nationalise the workforce.” has openlyan increased demand for expertise personnel, whether creating enlisted foreign technical qualified to help Pertamina undertakeexpat. technologicallyremains in high demand and Among local or new, Subsea talent challenging developments. likely to the incentives onAngola gets its own pre-salt exploration programs increase once offer are opening up new acreages for exploration Regional Overview and a commitment to fast-trackmeasures have been implemented underway. New labour reform the completion of pipelines and APAC is a madhouse of activity at the moment. The global hub for related infrastructuretoward improving Having taken an overall recently, geared to boost output. working conditions and LNG design and component construction, as well as the largest improving government transparency in the oil and gas sector, the more balanced approach to foreign investment and involvement consumer of natural gas by region, APAC’s fabricators, shipyards, backbone of the Angolan economy. than other Asia Pacific countries, Indonesia and Pertamina are at engineering firms, and industrial complexes are all hands on deck. this point relatively well-positioned to maximise the opportunities Unequivocally, the major concern across the board is workforce. that currently exist for the region. A new round of licensing tenders Nigeria Already stacked with activity late 2010 and into 2011, it was the has created significant FEED has recently approved ato construct The Nigerian government work, as has a new plan $3.5 billion disaster in Japan that pushed the limit in terms of capacity here. eight smaller LNG terminals and two FPUs. Project Managers and national electricity grid to put an end to the country’s chronic Local content, once a major driving force in everything from staff Construction personnel across all levels are in especially of the power shortages. Ironically, Nigeria seeks to raise much high to suppliers, now seems somewhat utopian in the reality of today’s demand. required through foreign partners, in exchange for which capital sheer demand. Overflow of construction work in South Korea is spilling over into China, whilst workforce is in abundant supply the government promises increased operational transparency and there, language and lack of technical experience are barriers Malaysia administration. Proposed timelines are to have the above-board to more efficient, high-quality builds. Given the volume of work Malaysia is homecompleted by 2014; specialised subsets from local new ‘supergrid’ to several major LNG engineering projects, and underway, clients are choosing their business partners much nearly all gas exploits may migrate to this groundbreakingor Rasgas oil and clients are asking for candidates with Qatargas project. more strategically, appointing those whom they are confident experience. Whether by concession or by force, Malaysia’s borders have the capacity to fulfill their needs and offering better rates as are being thrown open to candidates with the backburner the Yet another federal election is threatening to right technical incentives for more dedicated service. Construction teams and expertise from all over the world, (which would corporations are proposed Petroleum Industry Bill and foreign effectively rewrite FEED personnel are most acutely in short supply across APAC. finding Malaysia an basis of Nigeria’s relationships with IOCs) once the legal and fiscal easy partner with which to do business. As more, potentially delaying billions of dollars in energy industry mentioned in the section introduction, the big turning point both Japan in investments. region was the disasterunderstood, thesubsequent and for the Until fully revealed and in Japan and controversy The March 2011 earthquake and tsunami decimated Japan’s urgency for LNG Bill will Add in this major activity out of Australia surrounding the supply.resultto a slowdown in some major projects, energy sector resulting in the need to import up to 10 million (for which Malaysia, remain in holdingSingapore areiskey support operators opting to Indonesia and pattern until it known what megatonnes (mt) per year of LNG in the long term to offset lost centres) andthe bill will have regardless of ethnicity, take immediate real effect staffing levels, on corruption and security concerns. nuclear power capacity. Japan, already the world’s number one priority. importer of LNG, will now need to fill a 10 gigawatt gap in power supply following Fukushima Daiichi. LNG is considered the most In terms of domestic development, several new federally-sponsored reliable and flexible fuel to fill the power shortfall. Despite Russia’s tax incentives are available for foreign corporations for exploration efforts to provide the extra LNG cargoes and the proximity of and production of new areas either on or offshore as well as to Japan to Sakhalin Island most of the extra fuel will come from maximise production from smaller fields already developed. Qatar. Of that extra LNG that Japan will need in the near to Downstream activity is also moving at a brisk pace. FEED and EPC medium term, about four million mt/year will come from Qatar, with disciplines in LNG, Subsea and Construction Project Managers, approx 1.5 million mt/year from other sources. Japan’s dilemma Quality and Safety personnel are in critically short supply. has strengthened the position of gas on the global market for the foreseeable future. The increased need for gas could accelerate Singapore the implementation of the proposal to add a third train at Sakhalin The boom in construction activity in Singapore’s yards has filled 2 or the LNG project under consideration at Vladivostok. Japan capacity to the brim. The modularisation of LNG components poses and Russia recently agreed to consider this as part of ongoing a significant drain on construction personnel, very ‘part’ may be joint ventures and future negotiations. farmed out to different design houses and fabrication firms, for which there must each be requisite teams of engineers, project Indonesia managers, construction supervisors, and labourers. Orders are The success ratio of prospecting in Indonesia is reported to be piling in for new builds, rig conversions, FPSOs, et cetera, putting the highest in the world, yet production outputs are on the decline supervisory roles in construction, Subsea, Safety, Engineering and and often behind target, inefficiencies to which the country’s Project Management expertise in all disciplines in peak demand.6 www.airenergi.com © Air Energi 2011
  9. 9. Asia Pacific Given the mounting pressure for subsea and LNG equipment technical schools. Vietnam has found a clever workaround to a worldwide, timely delivery on projects has taken precedence over multitude of circumstances stacked against them, and should be local content regulations, the right experience proving the only well on their way to a new form of energy independence within the creating an increased demand for qualified personnel, whether insurance against major delays and cost overruns. next few years. Subsea talent remains in high demand and likely to local or expat. increase once Angola gets its own pre-salt exploration programs Thailand The woman poised to become Thailand first female prime minister Your Expectations as measuresworking conditions and underway. New labour reform a Region been implemented recently, geared toward improving have acknowledged huge challenges in reconciling her divided country, improving government transparency in the oil and gas sector, the after an election landslide seen as a rebuke of the military-backed backbone of the Angolan economy. establishment that ousted her brother. Yingluck Shinawatra’s Asia Pacific Salaries massive winning majority will likely boost Thailand’s stability in Nigeria the short term and reduce the chance of intervention by the coup- The Nigerian 56% government has recently approved a $3.5 billion prone military. Thailand’s priorities look to be shifting towards national electricity grid to put an end to 38% country’s chronic the extensive exploration work, potentially opening the door to more power shortages. Ironically, Nigeria seeks to raise much of the direct foreign investment and involvement. Thailand’s Energy 6% capital required through foreign partners, in exchange for which Minister recently announced that Thai natural gas reserves may the government promises increased operational transparency and run out in less than 20 years, citing overdependence on natural Increase Decrease No Change above-board administration. Proposed timelines are to have the gas for electricity generation as the primary drain on the resource. new ‘supergrid’ completed by 2014; specialised subsets from local Given the highly technical nature of exploration and development oil and gas exploits may migrate to this groundbreaking project. here, coupled with regulatory uncertainties and seemingly endless political turmoil, Thailand may have a more difficult time attracting Asia Pacific Hires Yet another federal election is threatening to backburner the foreign funding to the same degree as neighbouring industry proposed Petroleum Industry Bill (which would effectively rewrite hotspots Malaysia, Indonesia and Singapore. Construction 42% the legal and fiscal basis of Nigeria’s relationships with IOCs) once of natural gas infrastructure (pipelines and import facilities) more, potentially delaying billions of dollars in energy industry 42% continues at a brisk pace in efforts to keep up with increasing investments. Until fully revealed and understood, the controversy domestic demand. Subsea exploration is also ongoing, though to 16% surrounding the Bill will result in a slowdown in some major projects, a lesser degree than other countries in the region. LNG expertise operators opting to remain in holding pattern until it is known what here, as elsewhere, is in high demand, along with Construction/ Increase Decrease No Change real effect the bill will have on corruption and security concerns. Project Managers and related EPC disciplines. “Important to maintain workforce during this period of stiff competition and high turnover.” Vietnam The swift and thorough clearing out of expat personnel from Vietnam was purported to be in the interest of increasing Viet national personnel so as to save costs and drive the local economy. Yet something of an about-face has begun to transpire, with cash in hand and dim prospects in domestic fields, PetroVietnam has aggressively pursued developments in several other countries of late. Recognising the lack of high-level expertise among Viet nationals to man up these projects, PetroVietnam has simultaneously begun to bring top expat personnel back, this time functioning as mentors to recent graduates of Vietnamese© Air Energi 2011 www.airenergi.com 7
  10. 10. Australasia “Several major concurrent LNG and PNG mining projects are putting strain on There is little federally-owned land in Papua New Guinea. This creating an increased demand for qualified personnel, whether may seem good news for resource extractors, except rather than available resources.” local or expat. Subsea talent remains in high demand and likely to dealing with one central body for licensing and permits corporations increase once Angola gets its own pre-salt exploration programs must court the approval of individual communities prior to project underway. New labour reform measures have been implemented Regional Overview commencement. One glitch and the venture may collapse. This recently, geared toward improving working conditions and The massive scale of projects in Australasia, in the tens of billions kind of community affairs capability with so many moving parts improving government transparency in the oil and gas sector, the of dollars in capital expenditures, only magnifies how critical labour requires a special type of development team, one that both has backbone of the Angolan economy. cost and labour availability are against preventing mammoth cost the finesse as well as the interest to do so in what is an extremely overruns. Corporations face significant inflammatory pressures challenging and risky environment. Once the legal affairs are Nigeria sorted, then comes the challenge of attracting supplemental labour when rates are nudged up slightly or risk serious delays when headcount is not optimised. Fortunately for Australia, energy is from abroad, training locals to meet national content a $3.5 billion The Nigerian government has recently approved quotas, living king, so if there is talent to be had generally Australian oil and gas in tough conditions, grid to put an end labour with higher rates national electricity and competing for to the country’s chronic ventures have deeper pockets than other local industries such on offer shortages. Ironically, Nigeria seeks to raise Despite this, power from PNG’s well-established mining sector. much of the as mining or infrastructure. Not so with Papua New Guinea, but PNG holds huge through foreign partners, resources andfor which capital required potential with its mining in exchange massive workarounds in terms of sourcing cheaper offshore labour are deposits of natural gas, and project activity is gaining traction and the government promises increased operational transparency and being found. quickly pickingadministration. Proposed timelines are to have the above-board up. new ‘supergrid’ completed by 2014; specialised subsets from local oil and gas exploits may migrate to this groundbreaking project. Your Expectations as a Region Australia The rate of development in Australia is blistering at the moment, Yet another federal election is threatening to backburner the with FIDs being announced seemingly every day. This represents proposed Petroleum Industry Bill Salaries would effectively rewrite Australasia (which a big step-change in hiring, from remote offices overseas to the legal and fiscal basis of Nigeria’s relationships with IOCs) once major crew mobilisations on-site; however an increasing shortage more, potentially delaying billions of dollars in energy industry 49% in availability of local Australian and New Zealand personnel is investments. Until fully revealed and understood, the controversy forcing corporations to look elsewhere for headcount. Fortunately, 49% surrounding the Bill will result in a slowdown in some major projects, the federal government has been swift to recognise the handicap operators opting to remain in holding pattern until it is known what 2% strict localisation policies can impose, and has in turn granted real effect the bill will have on corruption and security concerns. state-level governments the autonomy to dispense expat work Increase Decrease No Change visas directly to corporations according to project needs specific to their region. These efforts have thus far prevented any significant spike in rates, though with so many projects scheduled to go to construction phase soon the writing is on the wall in terms Australasia Hires of potential shortages and rate increases for skilled labour. Then consider megaprojects like Gladstone, Wheatstone and Ichthys, 75% each in the tens of billions of dollars, and each having either been 15% granted environmental approvals or are soon scheduled to be. In the meantime, the slowdown of activity in the Middle East has 10% brought many Australians home for work. With unemployment holding at five per cent, the federal government has developed Increase Decrease No Change a range of training and re-skilling programs aimed at bringing expat Australian workers home. High demand remains for LNG expertise, Project Engineering, Quality, Procurement and Construction personnel across Australia.8 www.airenergi.com © Air Energi 2011
  11. 11. Caspian “Localisation forcing companies to moment appears to be on track with PSAs formally in place now between each participating country. In the meantime, in a potential release expats based solely on effort to settleincreased domestic discontent, the Azeri government creating an bubbling demand for qualified personnel, whether policy, leaving long-term vacancies has opened the oil-revenue remains in highvarious public works local or expat. Subsea talent taps to fund demand and likely to projects and related salariesits own pre-salt explorationFEED and increase once Angola gets and employment. Expect programs on project teams.” constructionNew labour reform the cominghave been megaprojects underway. work to pick up in measures months if implemented Shah Denizgeared Nabucco proceed as planned. conditions and recently, II and toward improving working Regional Overview improving government transparency in the oil and gas sector, the Progress on many of the major projects in the Caspian region Russia of the Angolan economy. backbone has been slow across the summer, though activity is anticipated Domestically, the Russia finance minister has the nation’s oil to pick up in six to 12 months’ time. Complexities surrounding barons in his sights once again, announcing a new regime of taxes Nigeria taxation, royalty rates and ownership structures have yet to be and the scrapping of some existing systems for the nation’s largest The Nigerian government has recently approved a $3.5 billion fully resolved, despite the massive investments made here in operators.electricity grid to a knock-on effect with oil companies national This may have put an end to the country’s chronic support of megaprojects such as the Kashagan offshore oil field. warning shortages. investmentNigeria is muchto raise much difficult power of delayed Ironically, which seeks needed. It’s a of the There has been no slowdown in the wooing of additional funding, balancing act with the Ministry anxiously looking for ways to which capital required through foreign partners, in exchange for scrap however, in spite of less-than-committal trading partners found athe government promises has provedoperational transparency and hike in social taxes that increased damaging to the investment in local oil ministries and NOCs. Yet even as IOCs like Conoco climate. To the untrained eye, the oiltimelines are to have the above-board administration. Proposed industry appears to be and Shell are announcing exit strategies from the region, others flourishing in Russia, but the gains mask an accelerating from local new ‘supergrid’ completed by 2014; specialised subsets decline in including Statoil quick to take their place. West Siberiaexploits maymost prolific production provinces, forcing oil and gas one of the migrate to this groundbreaking project. interested parties to venture into even more remote and difficult Kazakhstan terrain. Russia federal election is threatening to move ahead with Yet another has vast gas reserves but needs to backburner the Kazakhstan is courting major international investments to fast- difficult Arctic LNG projects to boost(which would effectively rewrite proposed Petroleum Industry Bill production output. Political and track the development oil, natural gas and mining reserves. To economical turmoil basis of the worldrelationships withinternational the legal and fiscal around Nigeria’s has intensified IOCs) once do this, it must compete with the likes of Brazil and Australia, also operators resolve to make headway in Russia and the Arctic, where more, potentially delaying billions of dollars in energy industry keen to capture billions of dollars in funding. Kazakhstan has deals have notoriously been difficult tounderstood,win and retain. investments. Until fully revealed and tender for, the controversy attracted more than $150 billion in foreign investment since its surrounding the Bill will result in a slowdown in some major projects, independence from the Russian Federation in 1991. Yet drop- Your Expectations in holding pattern until it is known what operators opting to remain as a Region of-a-hat changes to ownership, royalty and tax structures are real effect the bill will have on corruption and security concerns. not uncommon, raising concerns over a potential shift toward Caspian Salaries resource nationalism. Details of financial arrangements have yet to be resolved between 44% the Kazakh government, its national oil and gas corporations and 56% participating IOCs, holding up progress on several major projects 0% here, to the extent that Shell recently demobilised staff deployed at Kashagan for second-phase FEED work. The first phase is on Increase Decrease No Change schedule to begin production in 2012, however the second, more costly, phase may be postponed for several more years in efforts to bring development costs down. Caspian Hires Azerbaijan Mounting tensions both within Azerbaijan and between Azerbaijan 40% and neighbouring Armenia are adding to the political sensitivities 44% severely complicating the energy industry at present. The critical link here is the supply of Azerbaijani gas to support construction 16% of the Nabucco pipeline, a major supply conduit for gas between the Caspian region, the Middle East and Europe. Construction Increase Decrease No Change of Nabucco is scheduled to commence in 2012, and for the© Air Energi 2011 www.airenergi.com 9
  12. 12. Europe “There is a shortage of trained assets, as potentially diverting investment funds elsewhere. Yet given the higher cost of labour and operation and mature fields, engineering staff, with training the so-called ‘tax-grab’ seems an easyqualified personnel,the more creating an increased demand for scapegoat against whether programs cancelled in the 70/‘80s likely driver of new major global prospects anddemandoil prices. In local or expat. Subsea talent remains in high strong and likely to spite of this, the UK continental shelf remains exploration programs increase once Angola gets its own pre-salt competitive overall. and never fully reintroduced.” underway. New labour reform measures have been implemented Whereas new E&P activity offshore UK has been conditions and recently, geared toward improving working on the decline Regional Overview into 2011, decommissioning remains in the oil and gasin the UK, improving government transparency a heavy focus sector, the Whereas the oil and gas industry in the UK continues to lament the presenting an the Angolan economy. related Project Management, backbone of increased demand for seemingly punitive tax regulation changes recently implemented Engineering, Planning and site personnel. Disciplines such as aimed at its operators in the North Sea, Norway is benefitting Structural and Process Engineers are also in short supply. Nigeria from an influx of investment in support of maximising the further The Nigerian government has recently approved a $3.5 billion exploration of its offshore assets through a combination of Mainland Europe to national electricity grid put an end to the country’s chronic new licenses and tax incentives. Lingering concerns over the Densely shortages. Ironically, Nigeria seeks to highly much of the power populated, environmentally aware, raise urbanised, Eurozone debt crisis are a backdrop to some degree, but given Europe consumesthrough foreign partners, in exchange for which capital required vast amounts of energy yet is dependent on the international nature and focus of work done here it is unlikely foreign supplies to a larger degree than many other regions.and the government promises increased operational transparency All to have any direct effect over inbound design activity in London, this leaves Europe tied ratherProposed timelinesprice to have the above-board administration. vulnerably to the are of a barrel Aberdeen, or mainland Europe. Overall it has been a positive ofnewwith all its knock-on effects rippling throughsubsets from local oil ‘supergrid’ completed by 2014; specialised many aspects of first half for the region. As elsewhere, corporations are bracing the economy, most notably the value of groundbreaking project. oil and gas exploits may migrate to this the Euro, and vice-versa. themselves for potential rate increases, particularly for the Compounding this will be uncertainty surrounding the debt crisis out shortage of qualified personnel in specific disciplines. ofYet another federal election is threatening to backburner the Greece. Cost of living is high, as are taxation rates. Yet in spite ofproposed Petroleum Industry Bill (which would effectively work in doing some of the most technologically-advanced design rewrite Scandinavia the legal and fiscal basis of Nigeria’s relationships with IOCs) once the world, Europe’s engineering staff and contractors are relatively Rapid project expansion continues in what may be termed a North underpaid. Late 2011 and 2010 may of dollars in energy industry more, potentially delaying billions hold promise for higher rates Sea renaissance, driving demand for project personnel across thanks to increasing fully revealed and understood, the controversy investments. Until design activity. Safety, Process, and Planners many disciplines locally, though North Sea fabrication activity is surrounding the Bill will result in a slowdown in some major projects, remain the most sought-after disciplines. largely supported by yards out of Asia Pacific. The Norwegian operators opting to remain in holding pattern until it is known what government is crafting recommendations and policy to ensure Your Expectations ascorruption and security concerns. real effect the bill will have on a Region operators are given the incentives to maximise every field, with Norway’s oil and energy minister citing that increasing recovery Europe Salaries out of current operations on the Norwegian shelf is “as important as making new discoveries.” Where new developments are being pursued, they are in the far north Barents Sea, development 58% of which will require new technology able to withstand harsh 40% climactic conditions (and meet Norway’s strict environmental regulations) and the development of new shipping routes. 2% Increase Decrease No Change UK The demand for contractors is up in the UK, and unlike the United States, EPC firms are choosing to keep permanent staff levels unchanged and supplement with contract positions where Europe Hires required. Rates, which were on the decline into the beginning of 2011, have begun to increase thanks to longer contract terms. 68% With the pickup in activity worldwide many contractors who 29% couldn’t previously enjoy the luxury of being choosy have since returned to their favourite locations, projects or employers. 3% Some put the blame on decreasing new activity on recent UK Increase Decrease No Change tax structures, which have changed the book value of North Sea10 www.airenergi.com © Air Energi 2011
  13. 13. Middle East “Most contractors 55+ would rather Australia and Asia Pacific. Of the demographic outbound from Qatar, a good number are native Australians returning home where retire than work for a substantial pay similar major project work has opened up during their time away. In creating an increased demand for qualified personnel, whether decrease, leaving a gap, which will spite of a universal Qatarisation program for major employers, the quotas or expat. Subsea talent remains in high demand and likely to local are impossible to fill, so almost all the work is being done in turn push rates up.” by expats. once Angola gets its own pre-salt exploration programs increase underway. New labour reform measures have been implemented recently, geared toward improving working conditions and Regional Overview UAE improving government transparency in the oil and gas sector, the The political instability felt across much of the Middle East backbone of the Angolan economy. Interest in reinvesting in Dubai has increased in light of political has fortunately not affected all producing countries. What is unrest elsewhere in the region, in spite of a debt load in excess of noticeable is an increasing number of candidates coming from some 140% of GDP, Dubai is by contrast a relatively safe haven for Nigeria Libya and Bahrain into safer zones in Qatar and the UAE. With oil international investment. It has also remained well insulated against The Nigerian government has recently approved a $3.5 billion prices on average higher than in 2010, the region is as attractive violence and unrest felt across much end toMiddle East and North national electricity grid to put an of the the country’s chronic as ever given it’s relatively low cost of development and operation Africa. An influx of candidates released from recently completed power shortages. Ironically, Nigeria seeks to raise much of the and massive supply, ample supply routes and supporting projects in Qatar (as well as a smallpartners, seeking safer contracts capital required through foreign number in exchange for which infrastructure. outside of Saudi Arabia or Bahrain) has been noticed, however key the government promises increased operational transparency and talent is being placed almost immediately into other roles elsewhere above-board administration. Proposed timelines are to have the Iraq without ever coming to market. 2014; specialised subsets from local new ‘supergrid’ completed by Iraq has started a multi-billion dollar upgrading of its oil export oil and gas exploits may migrate to this groundbreaking project. pipelines, a vital element in its plans to boost production. The Even in a nation as wealthy as this, social spending and an acute modernisation of Iraq’s dilapidated energy infrastructure destroyed sensitivity to the general happiness of its population has spurned Yet another federal election is threatening to backburner the or rendered useless by years of conflict, sanctions and neglect, is a proposed Petroleum Industry Bill (which wouldloans to shore up commitment of nearly $2 billion for housing effectively rewrite essential to boosting production and exports. Safety and security shortages and fiscal basis of Nigeria’s relationships with IOCs) once the legal felt by Emeratis. Pledges for increased infrastructure remain the biggest problem in Iraq and further measures need spending have alsodelaying billions of dollars in energy projects more, potentially been made recently. These domestic industry addressing by the coalition government. The recent surges of will certainly Until fully revealed and understood, the controversy investments. increase demand for construction and project bloodshed cast doubts on their ability to control this. Despite the management the Bill will result in alikely not to the detriment of the surrounding personnel, though slowdown in some major projects, problems Iraq is moving ahead with plans that include a new energy sector. FEED,remain in holding pattern untilsignificant rise in operators opting to Project Management, and a it is known what network of pipelines through neighboring countries. In 2010, Iraq Piping, Pipeline bill will have on corruption and security concerns. real effect the and Process Engineers are currently most required. and Turkey signed an agreement to expand the operation of the twin pipelines that carry circa 400,000 barrels of oil a day from the Your Expectations as a Region Kirkuk oilfields in northern Iraq to Turkey. Middle East Salaries Qatar The completion of megaprojects like Shell’s Pearl Gas-To-Liquids 39% plant has resulted in the demobilisation of tens of thousands of 56% workers recently, mainly construction personnel, though some must remain on-hand for maintenance related work. 5% Senior LNG expertise without contracts are being snapped up by Increase Decrease No Change Rasgas and Qatargas in support of future LNG expansion projects, and any remaining candidates finding immediate employment in Asia Pacific or Australia. A massive petrochemical refinery project Middle East Hires announced by Shell is expected to revitalise employment statistics in Qatar, though for the moment much of the design work is being 54% handled elsewhere and major staff increases are not expected 27% until eight to twelve months from now. The demobilisation of significant numbers of expats in LNG and 19% construction is welcome news for expertise hungry areas like Increase Decrease No Change© Air Energi 2011 www.airenergi.com 11
  14. 14. Regional Comparisons Key Increase Decrease No Change H1 = statistics/predictions for the first half of the year, H2 = statistics/predictions for the second half of the year. Africa - Salaries and Pay Rates Africa - Hires Americas - Salaries and Pay Rates Americas - Hires Asia Pacific - Salaries and Pay Rates Asia Pacific - Hires Australasia - Salaries and Pay Rates Australasia - Hires12 www.airenergi.com © Air Energi 2011
  15. 15. Regional Comparisons Key Increase Decrease No Change H1 = statitics/predictions for the first half of the year, H2 = statistics/predictions for the second half of the year. Caspian - Salaries and Pay Rates Caspian - Hires Europe - Salaries and Pay Rates Europe - Hires Middle East - Salaries and Pay Rates Middle East - Hires© Air Energi 2011 www.airenergi.com 13

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