Workforce Survey H1low Res

Expectations for hires and pay rates in theoil and gas industry ( H1 ) January - June 2012

www.airenergi.com

Introduction 1

Survey Summary 2

Africa 3

Americas 4-5

Asia Pacific 6-7

Australasia 8

FSU - Caspian 9

Europe 10

Middle East 11

Regional Comparisons 12-13

Air Energi Overview 14

OilCareers Overview 15

Contacts 16

Copyright @ Air Energi Group LimitedDisclaimer: The Air Energi, OilCareers.com H1 Workforce Survey 2012 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.

Contents

creating an increased demand for qualified personnel, whether local or expat. Subsea talent remains in high demand and likely to increase once Angola gets its own pre-salt exploration programs underway. New labour reform measures have been implemented recently, geared toward improving working conditions and improving government transparency in the oil and gas sector, the backbone of the Angolan economy.

NigeriaThe Nigerian government has recently approved a $3.5 billion national electricity grid to put an end to the country’s chronic power shortages. Ironically, Nigeria seeks to raise much of the capital required through foreign partners, in exchange for which the government promises increased 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.

Yet another federal election is threatening to backburner the proposed Petroleum Industry Bill (which would effectively rewrite the legal and fiscal basis of Nigeria’s relationships with IOCs) once more, potentially delaying billions of dollars in energy industry investments. Until fully revealed and understood, the controversy surrounding the Bill will result in a slowdown in some major projects, operators opting to remain in holding pattern until it is known what real effect the bill will have on corruption and security concerns.

Welcome to another edition of the Air Energi and Oilcareers.com Workforce Survey of trends and predictions for the energy sector. As we enter our fourth year of this publication, it is remarkable to reflect on the changes we have undergone as an industry in such a short time: from an industry brought to its knees all the way to boom time, new technologies emerging seemingly daily, and exciting new frontiers to conquer from unconventional gas to ultra-deepwater pre-salt exploration.

If it feels as if we are reeling as an industry, we probably are.

Commodity values have recovered on paper but remain tenuous,

political tensions in key locales are flaring up, we are on the mend

from two massive environmental disasters, and the risks and

associated costs of today’s megaprojects are higher than ever

before.

Air Energi’s commodity is the exceptional talent we place into the

most challenging projects worldwide every single day. We know

that with them we are all in good hands. But we need to prepare

ourselves for the next generation of technical professionals who

will be replacing the thousands anticipated to retire over the next

few years. How will the industry overcome these challenges?

www.airenergi.com 1© Air Energi 2012

The responses are innovative and wide-ranging: internships, virtual

mentorship, supplementary offsite education programs, more

flexible government allowances towards working retirees, and a

general re-think of what retirement and retirement age needs to be

are just some of the more recent trends observed.

As you read through this edition perhaps contemplate that it is our

youth who will be the custodians of some of the most costly and

complex exploits the world has ever seen. We urge our clients to

do all they can to give young professionals the tools they need to

succeed, starting now.

At Air Energi we are rising to face the exciting demands before us

into 2012. We have expanded our operations and are pleased to

introduce Moscow, Iraq, Paris, Den Haag and South Korea into

the Air Energi Group. As always, we are absolutely committed to

helping our clients find the global workforce solutions they need.

Ian M LangleyGroup Executive Chairman

[email protected] behalf of Air Energi

Introduction

We are again delighted to work with Air Energi on the first Workforce Survey of 2012.

Despite the economic downturn being experienced globally, 2012

is set to be an exciting year for companies operating in the oil and

gas industry. There is a real sense of optimism, not just in the UK,

but around the world.

This buoyancy is reflected in the jobs market too, with OilCareers.

com enjoying record numbers of new applicants and vacancies,

a telling sign of confidence within the energy sector. Despite the

various challenges last year, including uncertainty over regulation

and the well-documented Arab Spring, our industry is nothing

short of vibrant.

Unconventionals are revolutionising North America’s gas sector,

while operators continue to invest in the UKCS. Australia too is

one to watch, with a significant future role as an exporter of LNG.

Recognising the vast skills base required to capitalise on these

developments, OilCareers.com will be undergoing an expansion

programme in early 2012. We are moving our UK HQ to new,

bigger premises in Aberdeen, while we will also be opening new

offices in Perth and Brisbane to cover our Australian clients, which

will be quickly followed by Calgary in Canada.

We’re delighted to be working with Air Energi once again to produce

this bi-annual Global Workforce Survey. Its regional commentary

will bring valuable insight to the whole industry.

Mark GuestManaging Director

[email protected] behalf OilCareers.com

Global Regional Comparison

Contract Pay Rates

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H22010

H12010

H1 2011

H22011

H1 2012

Increase Decrease No Change

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90

80

70

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50

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10

H22010

H12010

H1 2011

H22011

H1 2012

Permanent Salaries

H1 = statistics/predictions for the first half of the year, H2 = statistics/predictions for the second half of the year.

H1 (2012) 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.

• 10,000 + oil and gas professionals were invited to participate

• 6,500 + were either direct recruiters or senior decision makers

• Over 50 countries represented in seven major oil and gas producing regions

Regional Responses Chart

Percentage of responses from each geographical region

www.airenergi.com2 © Air Energi 2012

Australia 18%

Middle East 11%

APAC 16%

Americas 18%

FSU Caspian 9%

Africa 6% UK - Europe 22%




“Through testing over the past 50 years results show that countries up the coast of Africa have natural gas in abundance and data collected by industry experts also suggest the presence of massive offshore oil deposits.”

Regional OverviewA massive natural gas find in Mozambique (hitherto a relatively minor regional player) could catapult it into the company of Angola, Nigeria and Ghana. Security concerns are still present, but international confidence in the region is on the rise. This may be a matter of fact or simply an acceptance on behalf of energy supermajors prepared to assume the risk for the rewards on offer here. Successes are indeed triumphant, such as Total’s Pazflor and CLOV projects offshore Angola, and Ghana’s Jubilee, which have recently come online and are each capable of producing in excess of 100,00 bpd.

AngolaUnlike Nigeria, Angola boasts strong manufacturing and fabrication services to support energy-related projects. Local content rates have jumped from 70 to 90 per cent, which some IOCs have remarkably been able to achieve. Better education and technical training has been recognised as a core requisite, but these measures will not be an immediate solution. So, in spite of poor amenities, threats to personal security, and swallowing the highest cost of living anywhere (in Angola’s capital, Luanda), expats are helping keep the energy industry, which accounts for 85 per cent of Angola’s GDP, going.

As elsewhere in Africa, what appears sound on paper may vary widely from reality. No matter what the intent of local officials or foreign investors, something in the deal inevitably goes pear-shaped. Were Angola and Nigeria not sitting on 40 per cent of the continent’s oil and 67 per cent of its gas, and were the price of oil not so positive, the backhand dealings may not have been tolerated for so long. But with billions of oil and tons of natural gas in reserves, nobody is pulling the plug on exploration here.

Angola’s massive pre-salt deposits will continue to be explored, and a gas liquefaction plant is scheduled to be commissioned in 2012, keeping FEED, Subsea & Safety personnel in high demand.

NigeriaThough local content legislation here may seem over the top, when put into context, Nigerian oil production commenced in 1957 yet the Nigerian Oil and Gas Industry Content Act was only just passed in 2010. The local content targets are a step in the right direction for Nigerian service companies, who have since been given primary consideration for new projects. The Act also purports to create some 300,000 new jobs as a result of more contracts being retained here as opposed to being farmed out overseas, and Nigerian banks have provided incentives to local suppliers to enable them to become viable project partners. Long-time Nigerian business partners like Total are rightly proud to boast majority levels of local content as well as laying the foundation for local technical training programs.

That’s the good news. The bad news is that labour strikes have recently brought operators and government to their knees. At the core of the dispute was the sudden end to fuel subsidies for Nigerians, which keeps the price per litre of gas at a meager $0.41. Nigeria’s economy is heavily dependent on oil exports, and the world is also highly dependent on Nigerian oil supply. If an agreement cannot be reached, the seemingly out of the blue subsidy issue could plunge the country into anarchy.

In the meantime, offshore E&P is business as usual, and a $5.5 billion LPG plant should go into construction phase in the first half of this year.

Expectations for Africa

Africa

Contract Pay Rates

Decrease No Change

40%

30%

30%

Increase

Permanent Salaries

Decrease No Change

28%

22%

50%

Increase





“Even with some government knock backs on advancement the Americas are still growing their oil and gas community.”

Regional OverviewProject activity is booming in the Americas, from the tip of Alaska to the tail of Argentina. Asia Pacific, Australia, the Middle East and to some extent the United States have grabbed the LNG spotlight in recent months, but Latin America is not lagging far behind, posting significant import volumes as well as commissioning a second LNG export terminal. Going into 2012, Latin American countries should be in better shape to take on the development of their own megaprojects following the repatriation trend observed here in 2010/11, but may also experience higher rates as a result. Rig counts are up significantly over 2010, but rig workers (and equipment) remain in critically short supply here and elsewhere. With so many vast untapped reserves and relatively stable politics (as compared to Africa and the Middle East), the region will continue to be an attractive destination for investment dollars.

ArgentinaArgentina recently announced its largest ever shale oil discovery in the Nequen province, good news for a country whose domestic reserves have been forecasted to run out in as little as eight years. This find holds the potential to significantly increase Argentina’s energy self-sufficiency but will require highly skilled drilling technicians in order for it to proceed, and with very few other shale oil exploits in the world this is a significant variable. And then there remains the question of who’s to do it: typically oil majors are too risk-averse for experimental technologies, yet the more daring independents likewise have to have the financial and technological backing to succeed. Government price caps on domestic oil and gas pricing (approximately 25 per cent below market value) hinder international majors from rushing to develop either its shale oil or massive shale gas deposits, reported to be the third largest in the world. Here, as in Colombia and Brazil, construction trades will be in high demand as the requisite infrastructure to support a maturing domestic energy sector is developed.

BrazilFor all its promise, Brazil will prove to be a highly demanding business environment for international corporations, forced to balance highly risky plays, astronomical development costs, and perhaps most challenging, to accommodate Brazil’s steep 80 per cent local content legislation. Work-around options are slim: it’s

either work with relatively inexperienced local entities, establish branch office operations, or attempt to navigate Brazil’s notoriously thick bureaucracy. Inflation is increasing dramatically here, with two of Brazil’s biggest cities now in the top 12 highest cost of living. Hiring is universally expected to pick up sharply, but despite all the activity Brazil’s rates may lag behind other areas for the time being. The repatriation trend observed in Latin America may help fill in some of the blanks, but local content regulations will have to relax, and grant permits to non-Brazilians with the necessary senior-level experience required by such technologically demanding projects.

Asia Pacific will continue to be a key fabrication contributor to Brazil’s offshore developments, but construction activity has increasingly been undertaken by Brazilian shipyards, a trend that is expected to continue into 2012 and beyond creating thousands of much-needed onshore construction jobs. Though the government is attempting several measures to keep economic growth in check, Brazil’s inflation sits at a hefty 7 per cent. This, combined with the high risks associated with ultra-deepwater drilling, is increasing pressure from labour unions who are demanding wage increases of some 17 per cent. Qualified Subsea, Environmental, HSE and Quality personnel will be critical to ensure projects are delivered timely and to spec.

CanadaThough Canada remains one of the most sought-after destinations for industry professionals, it has also seen a voluntary departure rate in excess of 40 per cent. Even here, employers are capitulating to the increased rates, innovative incentives and even counteroffers that top talent has come to expect from competing projects both in Canada and from abroad. The recruitment sector is busy here supporting the employment needs of projects ranging from in situ oilsands to shale gas to offshore, and searches for the right personnel often span across the globe.

Canadian immigration regulations are notoriously thick, slow to react, and enforce rate standardisation among peers. Strategies for most clients with larger international recruitment programs is to focus on mobilisations into staff roles from markets where Canada is considered to be a key long term opportunity for their families. These include India, the Philippines, South America and the United Kingdom. For these programs, core issue remains the strength of the relocation package and level of settlement support for the family, the actual cost of living in Canada relative to wage structures, and residual concerns over the strength of the Canadian market with lingering memories of the 2009-10 downturn.

Overall, the Canadian oil and gas industry is anticipated to remain on an upward trajectory through 2012-2013, peaking through 2013

Americas





in western Canada based on current forecasts. Roles currently targeted over the next 12-18 months include core Engineering and Design disciplines, Project Controls, Subsurface and Operations.

ColombiaEmployers in need of expat talent for local projects can expect to pay a pretty premium over rates in other countries, upwards of 30 per cent more than average rates in Australia, Asia Pacific or North America. Contracts arising from Colombia’s licensing rounds in 2010 are being finalised, so expect FEED work to pick up as a result. And there is more to be done: more than 6.5 billion barrels are in place in just two of Colombia’s largest fields, but developers have done little to expand their E&P activity to other areas. So why not here? With the majority of reserves being inland, lack of infrastructure has become a strong deterrent to a faster pace of development. Improvements such as major refinery upgrades and transportation are underway, though. State-run Ecopetrol is putting Colombia first, having dedicated some 90 per cent of its 2012 capex to local E&P and construction projects.

Colombia has also been unable to avert the contagion of labour unrest that has hit the oil industry in Latin America recently. Strikes and protests have flared up of late, labourers citing environmental concerns, wage disparity and unfair distribution of oil revenues as the main causes. The catalyst for industry development in Colombia is not production (which has doubled over the last four years) but transportation bottlenecks. Here, the cooperation of local labourers is a more critical factor than high-end engineering expertise. Security remains an ongoing concern for operators and their employees in remote regions.

USAShale gas development is gaining momentum here, supported by positive market trends, improved public opinion towards shale gas exploration and the promise of much-needed jobs and economic recovery. This recent enthusiasm will be highly contingent upon gas pricing in the months ahead. Several new discoveries have been announced since E&P activity resumed in the Gulf of Mexico. With 3800 rigs currently active in the GoM, Drilling and Completions personnel are in particularly high demand (a shortage being felt the world over). Companies are having a harder time finding people across the board, given the breadth of exploration and project work in the industry there is no such thing as a glut of any particular skillset. Rates are subsequently slowly creeping up here as elsewhere.

Several US majors are back in full swing, having announced capex budgets in excess of pre-2009 levels, yet manufacturing remains cautious; according to a recent report, sector employers

are anticipating more layoffs than hires at the end of 2011, which may be welcome news to US-based corporations looking to man up on various projects.

Experienced personnel are a top commodity regardless of specialisation. “Five to fifteen” is the magic number: with this comes a roster of incentives to stay on board, including raises, bonuses, new assignments and promotions. Contractors are now regularly tapped by agencies and corporations alike, in sharp contrast to 2009 where almost any job offer was welcome. Clients are looking for ways to enhance their staffing capabilities internally or looking to outsource the hiring process to help win the war on talent.

VenezuelaStruggling to boost output for several years yet sitting on some of the largest oil reserves in the world, Venezuela will be unable to move forward without the estimated $80 billion required to develop its heavy oil-rich Orinoco belt. Worse still, the flow of cash in Venezuela has become outbound: recent arbitration settlements between PdVSA and ExxonMobil over nationalised assets may prove to be the first in a long line of payouts owing to international entities whose assets have been seized in recent years.

With elections on the horizon, complicated by reports of his own failing health, Chavez is once again courting popular favour with broad-reaching social programs. In the absence of new international investment of any significance, Venezuela recently signed an agreement with Iran to build 10,000 housing units, a move that will surely create construction employment for some time, though well short of the 3.5 million in job creation initiatives promised.

Expectations for the Americas

Americas

Contract Pay Rates

Decrease No Change

42%

3%

55%

Increase


Permanent Salaries

Decrease No Change

30%

6%

64%

Increase




“2010 was the largest reduction in oil demand in history. The economic downturn saw oil consumption drop by 3 million bpd. In 2011 we saw the global market start back towards relative normality, offering investment opportunities across the industry. This looks to continue into 2012 with the rising demand and new projects launching globally.”

Regional Overview2012 promises to be a record-breaker in Asia Pacific once again. Asian economies are expected to represent half of the world’s growth over the next five years and 75 per cent of the global increase in energy demand. Local and regional companies continue to figure prominently in overall industry activity, though somewhat in decline under a modest relaxing of nationalisation policies. There is a seemingly limitless appetite for engineering and technical expertise all over the region, particularly as China tries to play catch-up with fabrication and construction powerhouses in Singapore and Korea, as well as develop its much-needed domestic energy reserves. Refineries, chemical and power processing are also growing at unprecedented rates. APAC experienced the biggest jump in salaries into 2011, supported by strong regional commitment to boost production. Across the entire region, the following disciplines are in increasing demand: Naval Architects, Subsea Engineers, Construction Advisors, Project Controls specialists, QA/QC, Safety Engineers and Process Engineers.

JapanJapan’s still-battered energy sector is making great strides in a quest to fill the 10 gigawatt shortfall in domestic power supply following the disaster at Fukushima Daiichi. The ensuing spike in LNG demand was almost immediately felt and responded to within the region, significantly adding to the growth of LNG-related infrastructure. With little in local or regional reserves, Japan quickly joined forces with other NOCs on projects such as Rosneft and Sinopec’s development of the massive Sakhalin 3 LNG project. Japanese operator Inpex has also achieved a major milestone, becoming the first-ever Japanese operator for the colossal Ichthys LNG project recently announced offshore

Australia. Local design firms are extremely busy at the moment both in finding solutions to their own domestic energy emergency as well as in support of the long roster of megaprojects abroad.

IndonesiaThough the focus in Indonesia may not be on exploration and upstream-related investments, its downstream sector boasts a robust increase in investments of nearly $2.5 billion over 2011 thanks to fabrication and refinery demand from abroad. As such, Project Managers and Construction personnel remain in high demand. Indonesia remains committed to increasing output from its current projects as well as exploring and fast-tracking developments in conventional and unconventional natural gas. LNG extraction here is as competitive as any of its neighbours; the massive Genaldo-Gehem deep water natural gas project is expected to enter construction phase in early 2012 and once online will produce a staggering 1.1 billion cubic feet of natural gas daily. 2011’s licensing rounds have created increased activity in the EPC sector as well. Participating IOCs enjoy long-term working relationships with Indonesia, and given the incentive to boost domestic production are for the most part given the latitude to operate as required. Construction work on LNG and fixed platforms is driving demand for related disciplines.

MalaysiaMalaysia’s strong engineering talent base amd oil and gas experience have made Petronas an attractive joint venture partner. In efforts to diversify its energy portfolio and secure long-term growth, Petronas has been both investing in several projects abroad as well as aggressively courting international partners with which to build massive refinery projects to support the burgeoning activity across the region. This, coupled with attractive federal tax incentives for exploration and production, keep Malaysia at the forefront of industry activity worldwide.

But with tens of billions of dollars in investments earmarked for new Malaysian industrial refining projects, infrastructure delays in projects of this scale can create costly bottlenecks, as has been experienced by certain vendors. Given the breadth and scale of projects underway, there is virtually no discipline not in demand both upstream and downstream, but with several projects expected to move from FEED to construction in 2012, expect Construction Project Managers, Quality and Safety personnel to be most acutely needed. Significant offshore developments will also be underway into 2012, spiking demand for drilling exploration expertise. Fixed platform and LNG engineering and construction personnel are also highly sought after.

Asia Pacific





SingaporeNearly $15 billion in rig builds from Brazil alone are anticipated to be announced in early 2012, for which Singapore’s Keppel and SembCorp Marine figure prominently. Also in the mix are a potential 200 shipyard orders from semisubmersibles to floating production units. And this is before taking into account the real impact the Ichthys megaproject will have on construction and fabrication yards here. With the technical know-how and construction capacity required to support hundreds of billions in project investments worldwide, the nationality of a contractor has become of little concern. Several projects (LNG, refinery and FPSO) are either in the design engineering phase or construction and commissioning phases.

ThailandDespite declining production in neighbouring Asia Pacific countries, a new wave of discoveries in Thailand are helping insure its economic stability as well as continued foreign investment. The commencement of Chevron’s Platong II natural gas project should ease earlier concerns over domestic energy supply: this project alone stands to increase Thai energy production by 10 per cent. The country’s first LNG receiving terminal is expected to begin operations in 2012, for which the much-needed domestic supply infrastructure is already in construction. And in a textbook example of the increasingly geopolitical nature of offshore exploits, Thailand has recently engaged in talks with neighbouring Cambodia to develop significant crude and natural gas deposits along their long-contested maritime border. Agreements are already in place with Chevron and Total. Though not the hotspot in the region, there remains strong demand for Subsea and LNG expertise, as well as Construction/Project Managers and EPC disciplines.

“The Asia Pacific oil and gas industry consists mainly of cash rich national oil companies with unrivalled access to domestic oil and gas resources.”

VietnamConcerns over declining domestic production were allayed somewhat with several recent finds in the South China Sea, but there’s a catch: Vietnam believes the reserves to belong to them, whereas China claims all of the South China Sea. This is not an isolated occurrence. As energy companies struggle to find new,

more easily recoverable resources they can easily find themselves in sticky situations where even the terms of agreement may later be contested if the find proves large enough to warrant the flexing of political muscle.

Following the post-recession exodus of skilled expat labour, Vietnam has adjusted its thinking to enable foreigners to return to fill gaps in expertise and mentor young Viet technical students along the way. Similar sharing of intellectual equity (including innovative working visa exchanges) has been formally initiated between Vietnam NOCs and India’s ONGC Videsh Limited. Construction of multiple refineries is expected to commence here as well in the coming months.

Expectations for APAC

Asia Pacific

Contract Pay Rates

Decrease No Change

41%

6%

53%

Increase

Permanent Salaries

Decrease No Change

30%

9%

61%

Increase





Regional OverviewAustralia’s labour crunch just tightened a couple of notches with the go-ahead of the Ichthys LNG project in January 2012. This mammoth $34 billion development will require an estimated 4,000 construction workers once in full swing. This announcement may have come as a sucker-punch to other competing megaprojects in the region, themselves contending with serious labour shortages and resultant delays and cost overruns. In true pioneering fashion however, Australia is creating solutions to remain competitive in spite of the king-size hurdles in front of them.

AustraliaIchthys, Gorgon, Wheatstone, Gladstone. The sheer volume and scale of current projects in Australia should place an extraordinary premium on Engineering personnel as well as Construction, Quality, Project Management and Safety disciplines. There is now a global recognition of the quality of talent that can be found here, making it a prime hunting ground to man up competing projects locally and globally.

As of 2009, the Australian Government dis-incentivised Australian residents to seek contracts in lower tax locations such as the Middle East, Asia Pacific & Africa through the 23AG tax legislation requiring them to pay the relatively high Australian income tax even when working out of the country. Along with the slow-down of LNG and infrastructure projects in the Middle East, a good number of Australian contractors have indeed returned or stayed at home for the abundance of work and relatively high remuneration awaiting them, their skills immediately transferable and completely avoiding administrative lead time or paperwork.

On top of this, high value state advertising, employer retention strategies and government-funded programs are more examples of what is being made available to keep key personnel from being lured elsewhere, whether to a neighboring project or another destination abroad.

For the expat worker, the lure of tax-free Australian quality of life currently enjoyed under protection of the Living Away From Home Allowance (LAFHA) for the duration of their four-year visa may soon be over. Effective July 1, it is proposed that all foreign nationals will be subject to paying tax on their total gross income, inclusive of the allowance formerly allocated as LAFHA. For the employer, remuneration packages formerly on offer will either simply not be enough (forcing staff and contract personnel to leave) or they will have to find means to offset their employees’ increased burden (driving project costs upward). It’s a calculated risk undertaken by the federal government to raise tax revenue

or it may prove an expensive mistake by compromising export revenue through delays and cost over-run penalties on the oil and gas projects.

Otherwise, corporations here enjoy the latitude from government to test different programs to fast-track import of foreign labour or retrain non-energy personnel with aligned skills through unique approaches like adult apprenticeship programs and training centres designated for indigenous peoples. A specialised coalbed methane training centre has also been recently established to ensure projects are staffed with the right kind of local expertise; this centre alone is anticipated to provide employment for 1,000 people.

With the pendulum shifting once again to a candidates’ market, expect top talent to give up posts in developing areas in favour of competitive packages, quality of life and opportunities for advancement within Australia’s titan projects.

PNGDay rates here are among the highest in the world, owing to challenging living conditions and strong competition from the mining sector. Labour costs, as well as availability, are a serious concern to operators in Papua New Guinea. Sourcing labour either from other less-developed areas, training locals (a requirement for national content quotas anyway), as well as retaining the expat expertise to manage it all is a precarious ongoing juggling act. As with challenging environments elsewhere, PNG’s massive deposits make it worth the effort.

Expectations for Australasia

Australasia

Contract Pay Rates

Decrease No Change

58%

0%

42%

Increase

Permanent Salaries

Decrease No Change

46%

2%

52%

Increase





Regional OverviewThe Caspian region is known to have some of the richest and least-developed offshore oil and gas deposits anywhere, each of them capable of leapfrogging the ‘Stans’ out of ramshackle FSU economic conditions and squarely into the First World (rampant corruption notwithstanding). Little wonder NOCs are wading carefully into offshore developments, remaining safely within national boundaries and avoiding any potential geopolitical upset. Yet the proverbial bridge will one day need to be crossed, prompted perhaps by the Nabucco pipeline whose proposed route threads these international waters.

KazakhstanA ban on the use of employment agencies (so favoured by international corporations desiring to bring in expat personnel) was in place for several months near the end of 2011, and with it forced several agencies to close up Kazakh operations. However pressure from IOCs, whose investment dollars are gravely needed, eventually succeeded in having this legislation overturned. Fortunately for contract personnel, the government allowed them to remain in-country for the duration of their work permits, which for some proved to be enough time for the whole upset to pass. Yet thousands were not so lucky, having been laid off from labour-intensive projects like Kashagan. Many of these personnel were re-absorbed into other projects with the same employer or returned to design headquarters in the Netherlands and UK. NOCs and IOCs alike are hopeful that there will be a resurgence of foreign contractors back to Kazakhstan. For 2012 the situation is back to business as usual.

On the ongoing saga of Kashagan, the Kazakh government is again holding investors under scrutiny further hindering progress. $130 billion in capex has been invested thus far and the project, though huge, is barely into Phase 2 FEED. A veritable revolving door on the project partner list has created gross inefficiencies in terms of transfer of knowledge, methodology, project team structure and so forth.

AzerbaijanIn contrast to Kazakhstan, Azerbaijan’s well-established multi-billion dollar projects are keeping the area solidly busy. And revenues from oil and gas are being properly funneled back into the country, building infrastructure and funding universities and technical schools to create a well-educated, content, stable middle class and a local labour pool that is both capable and happy to stay in-country.

Total recently announced a major deepwater gas discovery offshore Azerbaijan within a mere 20 miles of Shah Deniz. Initial

tests revealed several trillion cubic feet of gas and associated condensates. The scale of this project, combined with the potential held at Shah Deniz, has kick-started stalled negotiations over the Nabucco pipeline, a 2,000+ mile artery linking gas supplies in the Caspian with mainland Europe. FEED and construction work is expected to be in high demand pending progress of these three major projects.

RussiaThough highly ambitious internationally in terms of projects and investments, Russian NOCs are extremely challenging to do business with within their own borders. The bureaucracy is dense and without valuable connections international corporations can find themselves quickly sidelined. With the success of internationally-funded projects so heavily dependent upon the personal directives of who is in charge, much of the activity in Russia (including the final investment decision on Shtokman) is on hold until after the federal election scheduled for March 2012. If Putin is re-elected, it’s expected he will be customarily quick to green-light domestic exploration and development.

In terms of projects and labour supply, LNG is very prominent in Russia with several projects on the go. Locals are widely preferred over expats because of cheaper rates, but top permanent roles and technical specialist contracts are still awarded to foreigners (though permanent staff is preferred over contractors). Many Russians in the energy sector grew up post-Perestroika so have little allegiance to the old school ways; they are educated and worldly, and are more ambitious to build their careers in London, Canada or America.

Expectations for FSU - Caspian

FSU - Caspian

Contract Pay Rates

Decrease No Change

70%

0%

30%

Increase

Permanent Salaries

Decrease No Change

53%

5%

42%

Increase





“The ongoing shortage of trained engineering staff means there is a higher demand for qualified fully trained people in the industry.”

Regional OverviewEuropean employers may have not been as competitive on the offer letters as elsewhere in the world, though they tend to reverse the global trend by paying local labour more than foreign personnel (on average +20 per cent). It has become an employee’s market here as elsewhere, particularly for high-demand positions such as HSE, Drilling and Design Engineers as well as construction professionals. Scandinavia and the UK are booming (or on the verge thereof), whereas mainland Europe is understandably more cautious given their potentially calamitous economic uncertainties. In spite of better rates on offer elsewhere in the world, the region very much remains a centre of excellence for the industry.

Scandinavia2011 was a banner year for Scandinavian oil and gas. The North Sea accounted for half of the global increase in rig count in 2011, creating a rush for pre-FEED and drilling expertise. Whereas even 12 months ago the focus in the area was maximising existing reserves, three major finds by Statoil as well as a historically large licensing round have reaffirmed offshore Scandinavia’s position as a leader in the industry. In response to industry pressure, new operators both large and independent (42 in all) have been awarded licenses during the last round, loosening Statoil’s dominance. Hiring activity remains brisk into 2012 in support of several new North Sea exploits.

UKNot far behind Scandinavia, the UK has also handed out 46 new production licenses during its most recent round. These will come as welcome news to an industry in need of revived domestic activity to ward off attrition pressure from other projects around the world, Australia in particular. Permanent staff are increasingly preferred over contractors: less flight risk, slightly lower rates, and more easily mobilised within the organisation either in terms of succession planning or to other postings abroad. As project developments ramp up, there may be a swing back toward the contractors’ favour near the end of the year.

Fabrication, technicians, operations and production personnel are among the highest in demand, but given the increasingly technical nature of offshore exploration here, professional sciences and

engineering credentials are also highly valuable and proving difficult to find. There will be a heightened focus on Quality and HSE positions following new guidelines imposed to govern safety standards for offshore drilling.

Mainland EuropeAll eyes are on the Eurozone in the coming months. In one of few cautious approaches to staffing observed, there has been a slight preference towards contractors in Europe at the moment, employers appreciating the flexibility in case rapid adjustments to headcount are required. For the moment, design work is coming in at a fast clip, particularly in Safety, Process and Planners, which may nudge rates upward particularly in those disciplines.

Home to some of the best engineering and design talent in the world, Europe is facing two competing challenges: an increase in the technical difficulty of today’s megaprojects as well as a good portion of the workforce approaching retirement age. Some countries such as the Netherlands are accommodating semi-retirees by allowing them to draw their pension while still working. Other initiatives include local mentorship programs for young technical professionals. In other industries, the future of nuclear is highly uncertain here, with Germany the first to pledge to phase out its nuclear power program by 2022. Wind energy projects have been gaining momentum, and may begin to more seriously impinge on the oil and gas labour pool as ambitious plans have been announced to increase wind-generated power in Europe 35-fold following the nuclear disaster in Japan.

Expectations for Europe

Europe

Contract Pay Rates

Decrease No Change

61%

4%

35%

Increase

Permanent Salaries

Decrease No Change

66%

4%

30%

Increase





Regional OverviewWith expats outnumbering locals 9:1, employers in the Middle East continue to offer some of the world’s most competitive day rates and attractive incentive packages to ensure expat talent remains in the region. Competition within the Middle East and from potentially more attractive and lucrative markets elsewhere will put retention strategies at the forefront for many employers.

There has been an overall pickup in activity into 2012 versus last year. For the moment, industry has only slowed somewhat in countries like Syria and Egypt who are experiencing civil unrest within their own borders, but other countries in the Middle East remain largely unaffected. NOCs are keen to push projects ahead and international majors are happy to go along.

IraqThough the exploration of Kurdish regions remains officially ‘verboten’ by the Iraqi government, IOCs who have ventured there are netting significant natural gas finds. Development in this region is something of a free-for-all; time will tell how long until the region is officially opened for exploration or regulations are meaningfully enforced.

Foreign operators, many of whom are well-established with decades of experience in Iraq, are providing easy contract opportunities for service companies. Fortunately for them, the local content regulations are more relaxed here than elsewhere in the world, though in contrast to other countries they are expected to double over the next two years. But demand is not slowing down, Iraq’s major energy projects will require tens of thousands of engineers and workers, and we expect competition for qualified expats to be fierce. Currently there is a decent pool of skilled and unskilled labour to hire from, benefitting the culturally disaffected unemployed.

QatarMany contractors from Qatargas and Rasgas have shifted to EPC agencies in Australia under the promise of better rates and longer-term contracts (the higher rates a necessity for the contractor leaving an area of tax-free income to one of the world’s highest taxed populations). In spite of the dramatic pickup in LNG work in Asia Pacific, contractors have thus far not gone there in any significant quantity; people tend to get pigeonholed in certain kinds of projects and Australia’s are more akin to those in the Middle East.

Activity is steady here with an expected increase now that the $6 billion Barzan onshore project has moved into construction phase. Pre-FEED and feasibility studies for projects into 2013 such as Shell’s new petrochemical refinery complex are also underway.

Middle East

Contract Pay Rates

Decrease No Change

68%

1%

31%

Increase

Permanent Salaries

Decrease No Change

65%

5%

30%

Increase


Though historically a contractor’s market like no other, there has been a shift in preference to permanent staff here keeping agencies busy with new recruitment activity.

UAEThe UAE is constantly busy. Offshore fabrication work in Dubai is expected to grow over the next 18-24 months in support of Nexen’s Golden Eagle project, with most contractors coming out of UK centres in London and Aberdeen. Here, as elsewhere in the region, there is an increasing trend of permanent or direct hire over contract staff. Dubai has also become a landing post for staff destined to transition to work on projects in Iraq, creating both an easier transition for the newly-landed employee as well as providing practical benefits where on-site facilities in Iraq are too small to accommodate extra personnel. FEED, Project Management, and a significant rise in Piping, Pipeline and Process Engineers are currently most required.

Saudi ArabiaThough its reserves are still considered to be the greatest in the world, Saudi Arabia may not attract significant foreign investment in the near term, thanks to regional instability, lack of financial incentives, and strict environmental compliance regulations. But this has not deterred the confidence of Saudi Aramco, boldly announcing several new finds in oil and gas as well as increasing output to the highest level in decades as if to declare “we are still open for business.” Indeed, some $385 billion in Saudi investment opportunities across numerous sectors were recently presented at a US-Saudi investment forum. The Saudi government has also recently announced major allocations for hand-outs and a boost to public spending in an effort to keep social peace.

Expectations for the Middle East

Regional Comparisons

Key Decrease No Change Increase

Africa - Contract Pay Rates100

90

80

70

60

50

40

30

20

10

H22010

H12010

H1 2011

H22011

H1 2012

100

90

80

70

60

50

40

30

20

10

H22010

H12010

H1 2011

H22011

H1 2012

Africa - Permanent Salaries

Americas - Contract Pay Rates 100

90

80

70

60

50

40

30

20

10

H22010

H12010

H1 2011

H22011

H1 2012

100

90

80

70

60

50

40

30

20

10

H22010

H12010

H1 2011

H22011

H1 2012

Americas - Permanent Salaries

Asia Pacific - Contract Pay Rates 100

90

80

70

60

50

40

30

20

10

H22010

H12010

H1 2011

H22011

H1 2012

100

90

80

70

60

50

40

30

20

10

H22010

H12010

H1 2011

H22011

H1 2012

Asia Pacific - Permanent Salaries

Australasia - Contract Pay Rates100

90

80

70

60

50

40

30

20

10

H22010

H12010

H1 2011

H22011

H1 2012

100

90

80

70

60

50

40

30

20

10

H22010

H12010

H1 2011

H22011

H1 2012

Australasia - Permanent Salaries

H1 = statistics/predictions for the first half of the year, H2 = statistics/predictions for the second half of the year.


Regional Comparisons

Key Decrease No Change Increase

FSU - Caspian - Contract Pay Rates 100

90

80

70

60

50

40

30

20

10

H22010

H12010

H1 2011

H22011

H1 2012

100

90

80

70

60

50

40

30

20

10

H22010

H12010

H1 2011

H22011

H1 2012

FSU - Caspian - Permanent Salaries

Europe - Contract Pay Rates 100

90

80

70

60

50

40

30

20

10

H22010

H12010

H1 2011

H22011

H1 2012

100

90

80

70

60

50

40

30

20

10

H22010

H12010

H1 2011

H22011

H1 2012

Europe - Permanent Salaries

Middle East - Contract Pay Rates100

90

80

70

60

50

40

30

20

10

H22010

H12010

H1 2011

H22011

H1 2012

100

90

80

70

60

50

40

30

20

10

H22010

H12010

H1 2011

H22011

H1 2012

Middle East - Permanent Salaries

H1 = statitics/predictions for the first half of the year, H2 = statistics/predictions for the second half of the year.


Air Energi is the trusted supplier to the oil and gas industry. With over 30 years experience in the sector our goal is to become the recognised, foremost provider of trusted expertise to the international oil and gas industry.

Headquartered in Manchester UK, Air Energi has regional Hubs

in Houston, Doha, Singapore, Brisbane and Manchester with

offices in 32 locations worldwide.

Air Energi’s core values of passion combined with innovation

and pragmatism are evident across the group as is our deep

knowledge of the industry, our inclusiveness and desire to go that

extra mile. But above all, we deliver!

Our range of services includes:

• Technical Workforce Consulting - The identification,

mobilisation and support of technical consultants assigned to

major oil and gas projects worldwide

• Commissioning and Inspection Resources - Fully equipped,

multi disciplined teams for major oil and gas capital

development projects

• Recruitment In-sourcing - Experienced oil and gas recruitment

experts assigned into client organisations to enable large scale

recruitment programs

• Search - Contingent & retained permanent recruitment

assignments

• Project HR Support – Tax and payroll immigration, transport,

health, security, accommodation and ongoing care

• Vendor Management – Recruiter vendor supply chain

Key Stats

• 1800 consultants currently assigned to major projects

• Workforce 60% local/regional hires and 40% Western Expats

• Present in 32 global locations

• Experience in a total of 50 countries

• Major clients include ExxonMobil, ConocoPhillips, Shell & Total

• EPC clients include Worley Parsons, Wood Group, AMEC,

Bechtel and KBR

Through our company values:

safe, knowledge, innovation, passion, inclusion and pragmatism,

WE DELIVER, each and every time. ”


OilCareers was launched in 1999, and has become the giant of online recruitment within the Oil & Gas industry. We provide job seekers with an easy and effective way of searching for a new job or career across all specialisms in the Oil & Gas industry.

Our heritage, size and global reach, mean we are best placed to

match professionals to the right job, and provide recruiters with

the best value and a wide range of advertising opportunities to

access the largest global talent pool of job seekers.

OilCareers offers one of the industry’s most visited websites with

over 1 million visits each month. The site already helps some of

the biggest and most reputable employers in the Oil and Gas

industries to advertise their vacancies.

We provide instant job advertising for the Oil and Gas industry to

both local and worldwide audiences, with offices serving the global

industry hubs of the North Sea, US, Canada, Middle East, Asia and

Australia, bringing employers, agencies and candidates together

efficiently and confidentially.

With an unparalleled web presence, continuous online and offline

marketing, and a dedication to matching the best candidate to the

right job as easily and effectively as possible, OilCareers is a vital

resource for all companies recruiting in Oil & Gas.

Key Stats

• OilCareers receives over 1 million visits per month

• Over 600,000 unique visitors per month

• More than 1 million registered users

• Over 20,000 new candidates registering each month

• A CV database of over 590,000 searchable CVs

• Over 14,000 new vacancies posted each month


Contacts

AmericasAir Resources Americas LLC6002 RogerdaleSuite 340, Houston Texas, 77072, USATel: +1 281 983 3464 Fax: +1 281 983 3468 [email protected]

Asia PacificAir Energi Group Singapore Pte Ltd1 North Bridge Road#06-03/04 High Street Centre Singapore, 179094 Tel: +65 6511 1060Fax: +65 6511 1050 [email protected]

AustralasiaAir Consulting Australia Pty LtdLevel 4, 46 Edward Street Brisbane, QLD, 4000Australia Tel: +61 (0)7 3056 0900 Fax: +61 (0)7 3112 2601 [email protected]

CaspianAir Energi Caspian LLP2nd floor, 15B Satpayeva st. 060011, Atyrau, Kazakhstan Tel: +7 7122 270 126 Fax: +7 7122 270 128 [email protected] UK, Europe & AfricaAir Resources LtdThe Exchange, 3 New York StManchester, M1 4HNUnited KingdomTel: +44 (0)870 112 9444Fax: +44 (0)870 112 [email protected]

Middle EastAir Resources QatarPO BOX 2953, Darwish Building 87604Area 48, Doha Airport WestDoha, QatarTel: +974 4462 0886Fax: +974 4462 6675 [email protected]

The Air Energi and OilCareers.com Global Oil & Gas Workforce Survey © 2011For more information on this report and its findings, please see information below.

Contributors Public Relations: Ian Langley. Coordination / Distribution and Design: Ben Quinton


United KingdomOilCareers LtdUnit 22, Abercrombie CourtArnhall Business ParkWesthill, AberdeenshireAB32 6FETel: + 44 0122 454 8080

United StatesOilCareers.com Inc11490 WestheimerSuite 850, HoustonTexas, 77077, USATel: +1 713 425 6316

DubaiOilCareers.comAl Thuraya Tower II, Executive office No. 18 – 6th floorP. O. Box 500643Dubai, UAE

AustraliaOilCareers Pty LtdLevel 3,130 Commercial Rd,Teneriffe,Qld, 4005Tel: +61 07 3872 6000

CanadaOilCareers.com1333 8 St SwCalgary, AlbertaT2r 1M6, CanadaTel: +1 403 209 3551

Asia PacificOilCareers.comNo 8 Eu Tong Sen Street#15-96 The CentralSingapore 059818Tel: +65 6225 3292

Workforce Survey H1low Res

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