Stronger business activity driving hiring trends as regions worldwide experience an uplift

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HAYS OIL & GAS
GLOBAL JOB INDEX Q2 2014
Stronger business activity driving hiring trends as regions worldwide experience an uplift

2. GLOBAL INDEX
Welcome to Q2 2014 Global Job Index.
The second quarter of 2014 was positive with an overall quarter-over-quarter increase in the job index from 1.65 in Q1 to 1.99 in Q2. All regions except Australasia reported significantly more job vacancies compared to Q1. On a year-over-year basis all regions except Australasia and Europe have shown
an increase in the index, reinforcing our view that the global economic recovery is gaining momentum.
In Q2, the job markets in South America, Africa and the CIS were particularly strong. In Mexico, the new economic reform will allow the potential of private and foreign investments. In Africa, key projects in Angola, Mozambique and Nigeria continue to create jobs. The CIS region saw a significant upturn from a low job index of 1.01 in Q1 to a high of 1.66 in Q2. This rise has mainly been spurred by increased seismic activity, exploratory drilling and further investment in LNG including the Yamal project. A recent survey from a Top 4 advisory business, Deloitte, which interviewed executives from both state owned and private business in the area, highlighted that improving field development efficiency and continued exploration and drilling ranked
highest on their priorities and for continued investment for the remainder of 2014, provided that they can continue to attract the right talent and capital given the region’s instability.
The recent signing of the $400 billion trade deal between Russia and China will see continued investment in the region. LNG Projects such as Sakhlin
and Yamal will compete with projects in the US, Nigeria, Qatar and Mozambique for the already small pool of specialist engineers with liquefaction experience. Exxon has started drilling with its partner Rosneft in the Kara Sea. Igor Sechin, the CEO of Rosneft, was recently quoted in RIA saying “The Kara Sea projects are currently the largest projects being undertaken globally and match those of Saudi Arabia. The Kara Sea has the potential of reserves larger than the Gulf of Mexico.” Provided international sanctions do not hinder these projects, we would expect compensation packages to rise overall in the region.
North America has seen steady growth with several key LNG projects receiving approval to export to FTA and non-FTA approved countries. Along with continuing investment into the midstream and downstream sectors, business activity is increasing and jobs are being created. The US total crude oil production, which averaged 7.4 million barrels per day (bbl/d) in 2013, is expected to average 8.5 million bbl/d in 2014 as reported by the US Energy Information Administration. This is the highest annual average level of oil production since 1972, putting a strain on the midstream sector. We expect
to see significant investment in this area over the second half of 2014.
On a more pessimistic note, both Europe and Australasia were relatively flat on a quarter-over-quarter basis, and down year-over-year. Figures released by the Australian Bureau of Statistics in July reported an unemployment rise of 0.4 per cent. The job market remains tough with major projects reaching completion and unfavourable economic conditions which may cause operators to not sanction further investment in the region.
Overall, the price per barrel of oil is strong at $105 and with current global political instability, particularly in Iraq, Ukraine and Russia, many analysts predict it will rise to over $110 per barrel in Q3. This will make conditions more favourable for continued capital expenditure despite the pressure they are receiving from investors to increase cash flow and to show returns on the massive capital investments made over the past years. Dependent on the outcome of the political unrest, we expect continued growth in the job market and for compensation levels to remain flat throughout Q3 and the rest of the year.
What is the Job Index?
The Global Job Index is a quarterly publication featuring news and updates affecting the oil and gas employment market. It provides an insight into fluctuating job numbers, as well as local events which affect employment demand making it a unique and informative resource for the industry professionals.
Background
Finding a new job via an online medium is now the norm for any job seeker looking for work. This trend has of course led employers to rely on their web presence, either direct or indirect, to source, attract and drive candidates to apply for their jobs.
The oil and gas industry is no stranger to the use of online media to attract candidates, with globalisation and remote work locations meaning the vast majority of roles in the industry are now resourced using online portals. These sites range from a company’s own online web pages to large recruitment groups, specialist job boards focused on specific geographies, and those dedicated to the oil and gas industry in all its guises across the world. These global boards have grown considerably in the last few years and now contain many thousands of jobs and resumes of users eager to access their next opportunity.
Methodology
Our team of analysts and researchers measure the numbers of live jobs posted on all the major job boards that are specific to the oil and gas industry. These are collated into regional figures and compared against a datum of 1.00 taken from October 2010.
At this time the industry had largely recovered from the global recession, and the oil price reflecting this recovery slowly edging upwards over $80 bbl. Capital had flowed back into the industry boosting exploration, project starts and profits. Recruitment had recovered steadily since the start of 2010 in line with the increase in revenues although there were no significant skill shortages at that time. With expectations of a growing recruitment market through 2011, October 2010 appeared to be an ideal point from which to set our benchmark for the Global Job Index.
Each month since this date we have measured job posting activity on the same sites making sure we are consistent in how and what we measure. From time to time the sites themselves will change the way in which they post and maintain jobs, and this is closely monitored to ensure that this does not alter the results of our research over and above the specific measure of job posting activity we are seeking.
This data is broken down further to give a measure of regional activity and the trends within those regions. This further analysis is essential to oil and gas recruiters that scan the world for available talent.
All salaries in the Global Job Index are listed in US Dollars.
The Results
Hays Oil & Gas publishes its results on a quarterly basis producing the Global Job Index along with dedicated figures for each region; Europe, Africa, Middle East, Russia and CIS, Asia, Australasia, North America and South America.

3. GLOBAL OVERVIEW
Q2 job index by region Asia Middle East North America Q2 2011 Q2 2012 Q2 2013 Q2 2014
Yearly comparison of Q2 job index
index score
Europe
Africa
South America
Australasia
CIS
0.00.51.01.52.02.53.0EUROPEAFRICACISMIDDLE EASTASIAAUSTRALASIAN.AMERICAS. AMERICA0.51.01.52.02.53.0JanFebMarAprMayJun

4. Continued growth as companies
fight for talent, with some surpluses
forming.
Q2 of 2014 has taken an interesting path for major pipeline
projects. For instance, Keystone XL has hit regulatory
and environmental hurdles, with little news coverage or
advancement on start dates. As Keystone XL and other major
projects hover in regulatory uncertainty, there has been a shift
to rail transportation and pipeline reversal plans to assist with
the transportation of oil sands production.
Whilst Apache seeks to sell their share in Kitimat LNG, Chevron
continues to push forward with projects, facing competition
from Canada LNG and Aurora LNG for key liquefaction
specialists. The LNG market continues to see strong hiring
activity both in large scale export facilities and smaller
domestic projects and demand for LNG specialist knowledge is
expected to remain high for the remainder of 2014.
Along with this, there has been a large focus on production
optimization and completions. This in turn has led to an
innovation boom in technologies based around these areas.
Organisations who work in the oil tools sector, especially in
completions, have experienced an increase in demand for
their services. Therefore, as this market has grown, employers
are placing significant importance on attracting top talent to
ensure this demand is capitalized on. Some of the roles that
are particularly sought after include Technical Sales Specialists,
Operations/General Management, and Engineering Specialists
(electrical, mechanical, and electronic).
The North American subsurface market has continued to move
away from exploration and to focus more on operations and
production. In the second quarter of 2014, we noticed this shift
creating candidate surpluses in subsurface explorationists,
particularly in Canada, while at the same time shortages
in Production Geologists, Reservoir Engineers and Site
Operational roles. Due to increased acquisitions and sales of
lower 48 operational and speculative assets, there has been
a significant upswing in Acquisitions and Divestitures (A&D)
Reservoir Engineering positions with investment banks. Large
Exploration and Production (E&P) businesses are looking to
increase their Houston based A&D teams and capitalize on the
investments seen over the past six months in this area.
With the recent government announcements in Mexico to allow
private business to invest in the Gulf of Mexico, operators will
look to make investments in the Mexican controlled Gulf of
Mexico. As a result, we are anticipating a significant increase in
demand for upstream talent with deep water experience, based
in Houston over the next two quarters.
In demand
Technical Sales Professionals
– Completions
Average salary in North America
$125,000 base
+ commission & package
A&D Reservoir Engineers
Average salary in North America
$160,000 base
+ bonus & package
Year-on-year comparison
NORTH AMERICA
2011 2012 2013 2014
2.28
0.5
1.0
1.5
2.0
2.5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

5. Contrasting effects of government
decisions are seen across the region.
Mexican President, Enrique Pena Nieto, has enacted new rules
governing the historic opening of the state-run oil, gas and
electricity industries to foreign and private companies. The
President has also vowed to start putting in place regulatory
and oversight agencies to implement the new rules by the end
of August 2014. With this reform, Mexico opens up its large
reserves of both deep water and onshore shale plays.
Provided that government authorities can assign complex deals
to private companies without the obstacles that have hindered
the area in the past, we should see significant investment from
major operators. This will create job opportunities in Mexico
and Houston as companies will seek to utilize the skills and
technology already gained from US deep water operations and
shale plays.
In Colombia, however the feeling is not as positive. Difficulties
in achieving environmental licenses, security problems
in operational areas and complex negotiations with local
communities are delaying business activities and therefore
business investments.
Over the last quarter, we have seen an increase in professionals
moving between Argentina and Colombia, as employers seek
to address the demand for top talent with shale gas and
deposits experience. As new investors are attracted to the area,
there will be a continued rise in demand for candidates in the
construction and project sectors.
In demand
Geologist
Average salary in South America
$135,000 base
Senior Drilling Engineer
Average salary in South America
$150,000 base
Year-on-year comparison
SOUTH AMERICA
2011 2012 2013 2014
0.5
1.0
1.5
2.0
2.5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2.49

6. Labour market strengthening across
UK and Europe.
While the job index has declined year-over-year and has been
relatively flat between Q1 and Q2, we have recently seen a
rapid surge in jobs advertised in the last 2 months. The surge
will not come as a surprise to those within the sector. Although
some parts of the market such as exploration and production
have remained relatively flat, there have been several project
announcements that have led to a marked increase in demand
for various discipline engineers.
Within the UK market the original equipment manufacturers
have experienced a strong quarter along with consultancies
and Engineering, Procurement, Construction and Manufacturing
(EPCMs) companies. For example, our Aberdeen business has
been inundated with requests for design and manufacturing
skills and in the London market, the design based disciplines
have fared well, along with skill sets related to risk engineering
and verification.
Some of the usual hard-to-find skills remain highly sought
after such as integrity related roles for subsea installations
and pipelines. The Geoscience and Petroleum Engineering
disciplines have had a relatively quiet quarter although there
has been a noticeable increase in demand towards the end
of the quarter. All-in–all, the UK market remains somewhat
fractured. Several large organisations have made redundancies
– often heavily publicized – and yet many organisations are still
struggling to source these very same skills.
Further across Europe the job market is also looking more
positive. There are numerous projects underway which has seen
an increase in demand similar to that within the UK. Engineers
with design experience remain in high demand especially in
relation to process engineering and plant upgrade projects.
There haven’t been any significant policy changes throughout
the quarter but it is likely the Scottish independence vote will
feature heavily in Q3 as this will have a knock on effect across
the region.
In demand
Senior Process Engineers
Average salary in Europe
$120,000 base
Pipeline Engineers
Average salary in Europe
$150,000 base
EUROPE
Year-on-year comparison
2011 2012 2013 2014
1.0
1.5
2.0
2.5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1.88

7. African labour market goes from
strength to strength.
Africa has seen continued growth throughout Q2 as key
projects in areas such as Angola, Mozambique and Nigeria
continue driving job creation.
South Africa’s oil and gas sector is set for growth, as an
upsurge in exploration and the increasing prospect of the
country’s offshore acreage point towards considerable upside
potential for the country’s long-term upstream prospects. The
country also has vast unconventional resource potential, and
with growing political support for lifting the moratorium on
hydraulic fracturing, we could see shale development permits
issued in the second half of 2014. However, the passage of
the mineral and petroleum resources development bill has
caused widespread unease in the industry, and deep regulatory
uncertainty may cloud the country’s long-term oil and gas
outlook, unless the government can offer greater clarity to
potential investors. Should the government overcome the
unease then we expect the demand for those candidates with
deep and ultra-deep water experience to rise significantly
putting further pressure on the upstream talent pool globally.
In general terms, East Africa remains the hottest part of the
region particularly in terms of exploration and production
activity. There is a steady demand for geosciences and
petroleum engineering expertise along with local in-country
experience. Numerous companies continue to fight over the
limited highly skilled and locally knowledgeable staff available.
Although a large percentage of perceived activity in the region
resides with smaller organisations, several of the global players
are also investing significant resource in the continent. An
example being the recent meeting between Eni’s CEO and
Gabon’s President to discuss the Nyonie Deep prospect.
The Ebola outbreak has had an impact on a number of
companies operating in the region, even those whose focus is
elsewhere in the continent. Concerns about the outbreaks has
caused a decline in confidence within the markets for projects
throughout the region, not just in West Africa. Numerous
start-up and small exploration and production companies
listed on exchanges such as the UK’s AIM have seen significant
decreases in their market capitalization.
In demand
Senior Geoscientist –
New Ventures
Average salary in Africa
$200,000
Operations Engineers
Floating Production
Average salary in Africa
$150,000
Year-on-year comparison
AFRICA
2.75
2011 2012 2013 2014
0.5
1.0
1.5
2.0
2.5
3.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

8. Upward pressure on salaries
increasing disparity in wages.
With 2013 witnessing an upturn in the global economy, the
regions’ resource rich oil and gas economies were all predicting
strong growth at the start of the year. Instead, the labour
market experienced a surprisingly flat start to the year, but in
Q2 we’ve seen a significant upturn in job numbers, as reflected
by the job index.
It’s the usual suspects driving the job market. Original
Equipment Manufacturers are aiming for ambitious growth
targets and geoscience and petroleum engineering roles,
particularly in Malaysia, are also in high demand. As ever, the
region’s shipyards and fabrication markets have continued on
their upward curve with Offshore Oil & Gas/Marine fabrication
projects creating demand for hands-on technicians up to Senior
Project Managers with mega project experience.
Across the region, the consistently high level of job vacancies
has seen salary pressure increase as candidates are now fully
aware of the rising demand for their skills. However, employers
continue to resist and we are witnessing a widening gap
between candidates’ salary expectations and employer offers,
which extends the time to fill roles as employers hold out for
skilled candidates within budget. This disparity is particularly
pronounced when it comes to employing local talent, as the
workforce becomes increasingly savvy with regards to pressure
on employers to recruit Asian nationals.
In Singapore, the Ministry of Manpower (MOM) is pushing to
restrict foreigners, particularly on S Pass visas. This is starting
to have impact on the target demographic of the workforce in
Singapore as not only are employers finding it harder to take
on new staff from overseas, but also an increasing number of
visa renewals are being turned down. This clamp down seems
to be focused more on lower end salaries and S Passes with
higher salaried roles not experiencing the same issues.
In Malaysia, employers’ focus on “Malaysianisation” has
continued to gather momentum this year causing salary
demands to increase in areas where there are skills shortages.
This is particularly evident in the geoscience area where
companies, mainly operators, are now vying for talented local
professionals who can take over and drive the technical and
staff development requirements and occupy roles traditionally
held by expats, further widening the divide between
candidates’ and employers’ salary expectations.
In demand
Regional Sales/Business
Development Manager
Average salary in APAC
$140,000-$200,000 +
bonus + package
Process Design Engineer
Average salary in Asia
$90,000-$140,000 base
Project Manager FPSO/FSO
Average salary in Asia
$180,000-$250,000 base
Year-on-year comparison
ASIA
2011 2012 2013 2014
0.5
1.0
1.5
2.0
2.5
3.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2.56

9. Labour market activity strong despite
current political affairs.
Although many projects located in Russia that are managed
by international oil and gas companies have been delayed, we
have found that those initiated by Russian employers across
the globe are proceeding. Projects in CIS countries are also
progressing, and the major oil and gas producers around the
Caspian Sea are highly active in exploration and production.
The intelligence from our local teams suggests that as soon
as the international media focus on the Russia-Ukraine crisis
reduces, many projects will quietly and without fanfare come
on stream. Therefore, the prospects for candidates based in
Russia are looking positive, and employers can continue to
rely on a ready supply of highly qualified and good value local
candidates.
In demand
Bilingual Drilling or Well Engineer
Average salary in Russia & CIS
$9,000 per month
Geologist
Average salary in Russia & CIS
$6,000 per month
Year-on-year comparison
COMMONWEALTH OF
INDEPENDENT STATES
(CIS)
2011 2012 2013 2014
0.5
1.0
1.5
2.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1.68

10. State and commerce implement
initiatives to keep Australia
competitive.
Overall, the general Australian economy has finally showed
some signs of stabilization and slight growth. Across industries
we are witnessing some renewed optimism after two years
of deteriorating circumstances. This optimism has not yet
crept into the oil and gas industry, which showed a significant
year-over-year decline in the job index and no change from last
quarter.
Despite this, there are some positive activities that are
propping up the industry. APLNG downstream is now 75 per
cent complete with first deliveries of LNG set for the middle of
2015. The transmission pipelines from Surat Basin to Gladstone
are in commissioning and companies are currently looking to
feed their LNG facilities, beginning to focus on getting the most
out of existing infrastructure and developing new assets. This is
increasing demand for Petroleum Engineers with experience in
low permeability coals to assist in development.
Refining in Queensland must become more cost effective to
compete with the Hitech Mega Singapore refineries which
are heavily automated. Strategies have been put in place to
increase their standing on the Solomon Scale. Professionals
with maintenance and training experience are highly coveted
and demand for specialist technical skills remain high across
subsea, and drilling and completions disciplines.
Inpex’s Ichthys project has reached a major milestone and
completed dredging of the inner harbour. As the project
moves into construction phase, specialist trades, welding
supervisors and quality assurance/quality control professionals
are in high demand and early works on the offshore 800 km
subsea pipeline installation have now begun. ConocoPhillips’
BayuUndan facility is preparing for a major shut-down in
October and recruitment has already begun for shut-down
specialists with offshore experience. Additionally, as the
upstream component of the Gorgon project moves closer to
completion, candidates with construction and project delivery
experience are readily available for work and keen to find a new
challenge.
The removal of Australia’s Carbon Tax will make the region
more competitive again; however it will likely take a bit of
time before it makes an impact. Salaries have remained stable
with specialist areas still commanding higher rates. We expect
salary increases will be highly unlikely in the coming months.
We are also finding contract positions are more abundant
than permanent. Regional sales and business development
managers are in demand to sell internationally manufactured
products into Phase 2.
In demand
Petroleum Engineers
- low permeability coal
Average salary in Australia
$250,000-$350,000
Subsea Engineers –
installations
Average salary in Australia
$1200-$1500 per day
Year-on-year comparison
AUSTRALASIA
2011 2012 2013 2014
0.5
1.0
1.5
2.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1.07

11. Employers take action to attract top
talent in shrinking talent pool.
The future looks increasingly bright for the region’s drilling
industry as oil rig construction companies report significant
increases in orders of drilling rigs. National oil drilling
companies too have confirmed onshore and offshore drilling
projects, indicating that drilling will be an active area of the
market through to 2016.
Well service activity has increased within Oman, Kuwait and
Yemen, areas that historically have been more challenging
extraction environments, an indication that life extension
and enhanced recovery projects are under way and are
yielding positive results.
As more projects are awarded, the battle for top talent
continues to rise. Employers still hire contractors to staff
project work, however in order to attract and retain the best
skills, permanent recruitment is also on the rise. Businesses
are revising employee benefits packages to differentiate
themselves from their direct competitors and salaries
are being pushed higher, in particular for non-rotational
positions in less desirable locations.
To address the future skills shortage, we are seeing large
scale investment in training by both Oilfield Service and
Operators in the region. However, the current high demand
in skilled workers requires the appointment of expatriate
workers across the Gulf Cooperation Council (GCC).
In demand
Lead Instrumentation
Engineer
Average salary in the Middle East
$14,000 per month
Contracts Engineer
Average salary in the Middle East
$12,000 per month
Year-on-year comparison
MIDDLE EAST
2011 2012 2013 2014
1.0
1.5
2.0
2.5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2.22

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