Workforce Survey H2

Expectations for hires and pay rates in theoil and gas industry ( H2 ) July - December 2011

www.airenergi.com

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 LimitedDisclaimer: 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.

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

Welcome to the second 2011 edition of the Workforce

Survey and Report produced in partnership with

Oilcareers.com, we are pleased to inform our

readers that through this partnership we have nearly

tripled the number of survey responses over the last

edition., our sincere thanks to all those who took the

time to respond.

The familiar refrain of “recruitment and retention,” long the

cornerstone of HR policies worldwide, will need to add a third

component in the coming years: “training.” Emergent technologies

in LNG and increasingly technical offshore plays in relatively

remote corners of the world will demand the very best from

today’s senior project teams and skilled trades. We’ve observed

several unique contingency plans being rolled out by international

and national oil companies to ensure the requisite workforce is

available, but it’s universal that more needs to be done.

www.airenergi.com 1© Air Energi 2011

Economically, we have sustained sector growth at a manageable

pace. Environmentally, we have scrutinized operations and

regulations for riskier projects worldwide. Our shared responsibility

to cooperate and share resources, knowledge and best practices

will be especially important enter a new era of energy production,

markets and demand: it is in this spirit that we present this edition

of our Global Oil and Gas Workforce Survey. We are proud of this

publication as it represents our commitment to thought leadership

and involving our clients closely in everything we do.

Ian M LangleyGroup Executive Chairman

[email protected] behalf of Air Energi

Introduction

We are delighted to work with Air Energi once again

to produce this second, mid-year edition of the

Workforce Survey.

The global oil and gas industry continues to experience something

of a rollercoaster journey – not just in terms of fluctuating oil and

gas prices, but also with regard to political unrest and natural

disasters - all of this impacting on hiring trends. This latest report

does reflect that the guarded optimism experienced across the

industry in 2010 is set to continue as worldwide investment is

ramped up across the remainder of 2011.

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.

The shortage of technical skills across the industry and the ability

to train the next generation is vitally important. Global demand

has resulted in the import and export of skilled personnel but where

in the past this has lead to contractors demanding increasingly

higher fees, in the likes of the US, the candidate-driven market is

forcing a cap on contractor rates as operators are favouring staff

positions and building strategic alliances with specialist recruiters

in order to implement project teams more quickly.

Where we move now is into a period where the established

oil and gas centres of the past 10 – 20 years are competing for

skilled personnel with emerging markets where governments are

embracing new industry. However, the challenge that remains is

how to ensure that the next generation is trained and ready to take

advantage of these opportunities.

Mark GuestManaging Director

[email protected] behalf OilCareers.com

Global Regional Comparison

Salaries and pay rates

Increase Decrease No Change

Hires

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

Regional Responses

Middle East19%

Americas17%

APAC12%

Europe20%

Africa8%

Caspian/FSU8%

Australasia16%

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

Percentage of responses from each geographical region

www.airenergi.com2 © Air Energi 2011



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.

“ Nigerian rates have typically been on the high side for the region but are falling now due to the influx of candidates from the Middle East”

Regional OverviewOne thing remains certain in Africa, uncertainty. As far as emerging regions go, there is tremendous potential scope in Ghana, South Africa, Mozambique, Nigeria, Angola and elsewhere, but most places continue to experience a track record of poor infrastructure, corruption in the ranks, civil unrest and violence. Basic day-to-day challenges such as quality of life, living costs, personal security are major barriers to mobilising personnel here, and the poor rates, almost on par with the North Sea, are not helping attract better paid personnel. Even for those thrill-seekers up for the experience of a stint in Africa, localisation policies restrict transfer across much of the region.

AngolaIn what should be a seamless process, many EPCs are reporting to be experiencing difficulty getting paid out of their Angolan clients. Corruption and opacity is seemingly pervasive, according to a recent World Bank report, nearly 76% of firms (the second-most in the world) operating in Angola identify corruption as a major constraint to doing business there.

In spite of these challenges, discovery announcements keep 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 Angola’s pre-salt reserves continues apace, competing with Brazil for the highly specialised experience in this emergent field. Other discoveries and major fields are coming into production, notably Total’s deepwater Pazflor field. ExxonMobil and state-owned Sonangol were recognised for their industry leadership 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 Angolan employment. FEED, Subsea and Safety work remains in high demand into 2011.

NigeriaNigerian National Petroleum Corporation recently ranked rock-bottom by two corporate transparency watchdog groups. Yet Nigeria is making small steps to ground its energy sector and improve administrative transparency. A recently announced plan to construct extensive gas, fertilizer and petrochemical plants and

infrastructure promises to create up to 500,000 jobs for Nigerians, as well as bolstering and diversifying domestic energy production and supply. Nigeria is known to have the largest natural gas reserves in Africa, though it lacks adequate infrastructure to capitalise on them; with its “Master Gas Plan”, Nigeria aims to position itself among the world’s top natural gas producing countries.

Oil majors continue to observe Nigerian prospects from the sidelines until the impact the infamous Petroleum Industry Bill (PIB) will have on revenue and taxation arrangements are known. Recent elections and a new senate threatened to pull the debate over the Bill back to square one, causing additional delay, but exceptions were made to allow the legislation to continue along its current course.

Following a relatively quiet quarter one leading into the elections, activity has since picked up dramatically. Besides pressure for local content, the challenge faced by most corporations is convincing qualified 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 board. Subsea, Safety and Environmental expertise remains in high demand, and expect the budding local natural gas industry to be a further tap on qualified LNG personnel in already short supply worldwide.

Your Expectations as a Region

Africa

Africa Salaries

Decrease No Change

54%

8%

38%

Increase

Africa Hires

Decrease No Change

30%

12%

58%

Increase





“When senior staff retire they are almost always backfilled by contractors.”

Regional OverviewOverall, the Americas are riding the wave of high oil prices and high global demand, with many countries seeing double-digit growth in rig activity year on year. Of note, particularly for the region, is a more resilient US economy, buoyed by increased activity and confidence in the energy sector in terms of oil prices and domestic production with the moratorium lifted in the Gulf of Mexico and increasing momentum in shale gas plays.

Regional NOC’s have all announced aggressive investment plans to boost production and domestic supply out of the Americas totaling some $440 billion over the next five years. Heavy Chinese investment continues here, particularly in support of Venezuela’s vast Orinoco reserves and Brazil’s burgeoning pre-salt exploration. If momentum in shale gas exploration and extraction continues, expect to see Argentina and Colombia move in for their share of the South American energy spotlight. FEED and construction work in support of new exploration and production facilities and pipelines is driving employment in the region.

ArgentinaJust 10 years following a serious economic meltdown, Argentina now ranks at Latin America’s number three economy, its nine per cent growth in 2011 the product of strong manufacturing and automotive sectors. The outlook may well be even rosier in the coming months: several major discoveries made late last year signal an extremely busy time ahead for Argentina’s energy sector. Home to vast reserves of unconventional gas and shale oil, the Neuquén basin is the current hotspot in Argentine energy E&P. Analysts suggest the technologies being developed here may prove to be industry trend-setting. Musings of relaxed immigration policies to allow for full technical support of these explorations have yet to surface, though with sector activity picking up so dramatically across South America it’s unlikely Argentina will allow itself to be left in the dust. The next round of federal elections is due in October, and whilst left-leaning president Cristina Fernandez may not have the full support of unions and public sector workers, she also cannot afford to alienate much-needed foreign investment.

BrazilOverly protectionist labour policies have been found to deter employment growth more so than protect against unemployment, compound this with the risk that the right people may not in fact

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 to eke every last opportunity for itself out of its natural resource bounty. Unemployment is at an all-time low, and whilst several commitments by foreign corporations to create local operating and technological training centres have been made, the demand for engineering and construction expertise in-country is staggering.

Demand for major offshore installations in Brazil are set to increase as Petrobras tries to trim as much as possible from its pre-salt exploration costs, the majority of which will likely be constructed at Brazil’s new $1.7 billion shipyard, the largest of its kind in the Americas. The shipyard is anticipated to create 3,500 construction jobs with an additional 10,000 during the construction phase. Local content (of 55% to 65% overall) remains a firm focus here, to the extent that even state-owned Petrobras was reported to have been fined by authorities for not utilising adequate Brazilian-supplied materials. In spite of tax breaks and other incentives being offered to international business partners it is ultimately up to industry to find a way to play by the rules in Brazil’s massive pre-salt game.

CanadaDevelopment of Canada’s exploits offshore east coast have slowed back to typical levels with the delays on the Hebron project, the vibe is still positive though somewhat less manic. Activity will ramp up dramatically in 2012 when the project moves into detailed engineering, bringing the work back into local markets from Houston. Although things have been delayed, work is still continuing, and the press to bring Newfoundlanders back home from Alberta and other global points is ongoing.

Western Canada continues its upward trend, albeit also building later than anticipated in early 2011, but the net result is that the trajectory will be steeper over the next six to 12 months. As with other markets on swift rebound such as Australia, the level of activity post-recovery is expected to eclipse that of pre-recession. Labour markets at both ends of the country are continuing to tighten, with subsequent rate expectations creeping upward. It is becoming increasingly a candidates’ market. Employers, however, are doing all they can to keep downward pressure on rates; those that are holding tighter to this strategy are losing more and more potential starts to other opportunities either in Canada or elsewhere. Project Controls and Project Services remain in high demand, as do Construction, Civil and Electrical disciplines. Subsea expertise here, as elsewhere, is in dire need.

ColombiaColombia is not the only nation to have fallen victim to natural disaster this year, the damage caused by months of heavy rains,

Americas





one of Columbia’s worst natural disasters, has been estimated to cost billions and take years to rebuild. Everything from towns to roads, agriculture to mining has been affected. Civil unrest may be further fuelled if proposed reforms to alter the distribution of oil and mining revenues among provinces are successfully passed, posing a potential threat to industry operations here. Rebels are still flexing their muscles against energy and mining operations: pipeline and railroad bombings and kidnappings have all been reported in recent weeks. Government interventions to keep inflation low, redistribute the wealth earned from resource royalties, and amend relations with its labour unions – and in general maintain a favourable investment climate are just a few of the obstacles to overcome in the months ahead.

In spite of this, oil production hit record highs in Colombia at the end of quarter one of this year, and is in sight of a targeted one million barrels per day by the end of the year. Colombia has also set ambitious goals for coal exports, putting plans in place to improve infrastructure and reduce shipping bottlenecks. Having auctioned off dozens of blocks and signed hundreds of E&P contracts, Colombia is more than prepared to accept outside investment, the question remains whether its immigration policies will be equally accepting of foreign expertise to operate and manage these developments in a timely fashion.

USAFollowing a host of recent economic and public relations batterings, it’s finally good news for the energy sector on many fronts in the United States. The industry breathed a heavy sigh of relief as a notable increase in drilling permits for the Gulf of Mexico have been issued of late, though much of the equipment has since been deployed elsewhere in the world. Design work out of the US has thus picked up significantly, both in support of offshore new builds as well as LNG projects here and abroad.

North American natural gas reserves may not be sharing the spotlight to the same extent as those in Qatar or Australia, but with the massive increase in global appetite for LNG developers 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 terminals. Here, as elsewhere, top LNG expertise is sorely needed to develop the massive Marcellus fields and related production and supply infrastructure.

Overall, the US is becoming more of a candidate-driven market, though rates remain largely balanced for the moment. Employers are taking a more guarded approach to manpower costs, rather than enforcing caps on contractor rates, many are increasing the

number of direct hires to manage these costs near and long term. Several EPCs have also been trending towards ‘recruitment process outsourcing’ as temporary extensions of their HR departments to ramp up project teams more quickly and efficiently.

VenezuelaPresident Chavez finds himself in a dilemma at the moment as its election year. Desperate for investments to fully ignite development of its vast Orinoco reserves, particularly when oil prices are so high, the administration must maintain some veneer of being cooperative to entice outside financial commitments. Still, there is the persistent threat of nationalisation, and a recent cash grab in the form of additional windfall taxes on revenue earned by foreign oil companies with operations in Venezuela are major deterrents, particularly at a time when regional neighbours Colombia, Argentina and Brazil hold great potential and appear to be far safer choices.

Promises to create 3.5 million jobs in construction, oil, and farming are resonating well with the still-beleaguered Venezuelan population. Hikes to minimum wage have also been made recently. Nationalisation has historically been Chavez’ preferred method of job creation, but with fewer foreign companies setting up shop across all sectors, his administration may actually have to roll up their sleeves and figure out a way to get the job done themselves. Increasingly, mainstream candidates out of Venezuela such as Project Controls have been less prominently coming to market of late.


Americas

Americas Salaries

Decrease No Change

51%

2%

47%

Increase

Americas Hires

Decrease No Change

28%

8%

64%

Increase





“Mentoring of local staff is helping nationalise the workforce.”

Regional OverviewAPAC is a madhouse of activity at the moment. The global hub for LNG design and component construction, as well as the largest consumer of natural gas by region, APAC’s fabricators, shipyards, engineering firms, and industrial complexes are all hands on deck. Unequivocally, the major concern across the board is workforce. Already stacked with activity late 2010 and into 2011, it was the disaster in Japan that pushed the limit in terms of capacity here. Local content, once a major driving force in everything from staff to suppliers, now seems somewhat utopian in the reality of today’s sheer demand. Overflow of construction work in South Korea is spilling over into China, whilst workforce is in abundant supply there, language and lack of technical experience are barriers to more efficient, high-quality builds. Given the volume of work underway, clients are choosing their business partners much more strategically, appointing those whom they are confident have the capacity to fulfill their needs and offering better rates as incentives for more dedicated service. Construction teams and FEED personnel are most acutely in short supply across APAC.

JapanThe March 2011 earthquake and tsunami decimated Japan’s energy sector resulting in the need to import up to 10 million megatonnes (mt) per year of LNG in the long term to offset lost nuclear power capacity. Japan, already the world’s number one importer of LNG, will now need to fill a 10 gigawatt gap in power supply following Fukushima Daiichi. LNG is considered the most reliable and flexible fuel to fill the power shortfall. Despite Russia’s efforts to provide the extra LNG cargoes and the proximity of Japan to Sakhalin Island most of the extra fuel will come from Qatar. Of that extra LNG that Japan will need in the near to medium term, about four million mt/year will come from Qatar, with approx 1.5 million mt/year from other sources. Japan’s dilemma has strengthened the position of gas on the global market for the foreseeable future. The increased need for gas could accelerate the implementation of the proposal to add a third train at Sakhalin 2 or the LNG project under consideration at Vladivostok. Japan and Russia recently agreed to consider this as part of ongoing joint ventures and future negotiations.

IndonesiaThe success ratio of prospecting in Indonesia is reported to be the highest in the world, yet production outputs are on the decline and often behind target, inefficiencies to which the country’s

arduous licensing processes and other administrative hurdles have historically been to blame. In response, the Indonesian government has openly enlisted foreign technical expertise to help Pertamina undertake new, technologically challenging developments. Among the incentives on offer are opening up new acreages for exploration and a commitment to fast-track the completion of pipelines and related infrastructure to boost output. Having taken an overall more balanced approach to foreign investment and involvement than other Asia Pacific countries, Indonesia and Pertamina are at this point relatively well-positioned to maximise the opportunities that currently exist for the region. A new round of licensing tenders has created significant FEED work, as has a new plan to construct eight smaller LNG terminals and two FPUs. Project Managers and Construction personnel across all levels are in especially high demand.

MalaysiaMalaysia is home to several major LNG engineering projects, and nearly all clients are asking for candidates with Qatargas or Rasgas experience. Whether by concession or by force, Malaysia’s borders are being thrown open to candidates with the right technical expertise from all over the world, and foreign corporations are finding Malaysia an easy partner with which to do business. As mentioned in the section introduction, the big turning point both in and for the region was the disaster in Japan and subsequent urgency for LNG supply. Add to this major activity out of Australia (for which Malaysia, Indonesia and Singapore are key support centres) and staffing levels, regardless of ethnicity, take immediate priority.

In terms of domestic development, several new federally-sponsored tax incentives are available for foreign corporations for exploration and production of new areas either on or offshore as well as to maximise production from smaller fields already developed. Downstream activity is also moving at a brisk pace. FEED and EPC disciplines in LNG, Subsea and Construction Project Managers, Quality and Safety personnel are in critically short supply.

SingaporeThe boom in construction activity in Singapore’s yards has filled capacity to the brim. The modularisation of LNG components poses a significant drain on construction personnel, very ‘part’ may be farmed out to different design houses and fabrication firms, for which there must each be requisite teams of engineers, project managers, construction supervisors, and labourers. Orders are piling in for new builds, rig conversions, FPSOs, et cetera, putting supervisory roles in construction, Subsea, Safety, Engineering and Project Management expertise in all disciplines in peak demand.

Asia Pacific





Given the mounting pressure for subsea and LNG equipment worldwide, timely delivery on projects has taken precedence over local content regulations, the right experience proving the only insurance against major delays and cost overruns.

ThailandThe woman poised to become Thailand first female prime minister acknowledged huge challenges in reconciling her divided country, after an election landslide seen as a rebuke of the military-backed establishment that ousted her brother. Yingluck Shinawatra’s massive winning majority will likely boost Thailand’s stability in the short term and reduce the chance of intervention by the coup-prone military. Thailand’s priorities look to be shifting towards extensive exploration work, potentially opening the door to more direct foreign investment and involvement. Thailand’s Energy Minister recently announced that Thai natural gas reserves may run out in less than 20 years, citing overdependence on natural gas for electricity generation as the primary drain on the resource. Given the highly technical nature of exploration and development here, coupled with regulatory uncertainties and seemingly endless political turmoil, Thailand may have a more difficult time attracting foreign funding to the same degree as neighbouring industry hotspots Malaysia, Indonesia and Singapore. Construction of natural gas infrastructure (pipelines and import facilities) continues at a brisk pace in efforts to keep up with increasing domestic demand. Subsea exploration is also ongoing, though to a lesser degree than other countries in the region. LNG expertise here, as elsewhere, is in high demand, along with Construction/Project Managers and related EPC disciplines.

“Important to maintain workforce during this period of stiff competition and high turnover.”

VietnamThe 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

technical schools. Vietnam has found a clever workaround to a multitude of circumstances stacked against them, and should be well on their way to a new form of energy independence within the next few years.


Asia Pacific

Asia Pacific Salaries

Decrease No Change

38%

6%

56%

Increase

Asia Pacific Hires

Decrease No Change

42%

16%

42%

Increase





“Several major concurrent LNG and mining projects are putting strain on available resources.”

Regional OverviewThe massive scale of projects in Australasia, in the tens of billions of dollars in capital expenditures, only magnifies how critical labour cost and labour availability are against preventing mammoth cost overruns. Corporations face significant inflammatory pressures when rates are nudged up slightly or risk serious delays when headcount is not optimised. Fortunately for Australia, energy is king, so if there is talent to be had generally Australian oil and gas ventures have deeper pockets than other local industries such as mining or infrastructure. Not so with Papua New Guinea, but workarounds in terms of sourcing cheaper offshore labour are being found.

AustraliaThe rate of development in Australia is blistering at the moment, with FIDs being announced seemingly every day. This represents a big step-change in hiring, from remote offices overseas to major crew mobilisations on-site; however an increasing shortage in availability of local Australian and New Zealand personnel is forcing corporations to look elsewhere for headcount. Fortunately, the federal government has been swift to recognise the handicap strict localisation policies can impose, and has in turn granted state-level governments the autonomy to dispense expat work 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 of potential shortages and rate increases for skilled labour. Then consider megaprojects like Gladstone, Wheatstone and Ichthys, each in the tens of billions of dollars, and each having either been granted environmental approvals or are soon scheduled to be. In the meantime, the slowdown of activity in the Middle East has brought many Australians home for work. With unemployment holding at five per cent, the federal government has developed 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.

PNGThere is little federally-owned land in Papua New Guinea. This may seem good news for resource extractors, except rather than dealing with one central body for licensing and permits corporations must court the approval of individual communities prior to project commencement. One glitch and the venture may collapse. This kind of community affairs capability with so many moving parts requires a special type of development team, one that both has the finesse as well as the interest to do so in what is an extremely challenging and risky environment. Once the legal affairs are sorted, then comes the challenge of attracting supplemental labour from abroad, training locals to meet national content quotas, living in tough conditions, and competing for labour with higher rates on offer from PNG’s well-established mining sector. Despite this, PNG holds huge potential with its mining resources and massive deposits of natural gas, and project activity is gaining traction and quickly picking up.


Australasia

Australasia Salaries

Decrease No Change

49%

2%

49%

Increase

Australasia Hires

Decrease No Change

15%

10%

75%

Increase





“Localisation forcing companies to release expats based solely on policy, leaving long-term vacancies on project teams.”

Regional OverviewProgress on many of the major projects in the Caspian region has been slow across the summer, though activity is anticipated to pick up in six to 12 months’ time. Complexities surrounding taxation, royalty rates and ownership structures have yet to be fully resolved, despite the massive investments made here in support of megaprojects such as the Kashagan offshore oil field. There has been no slowdown in the wooing of additional funding, however, in spite of less-than-committal trading partners found in local oil ministries and NOCs. Yet even as IOCs like Conoco and Shell are announcing exit strategies from the region, others including Statoil quick to take their place.

KazakhstanKazakhstan is courting major international investments to fast-track the development oil, natural gas and mining reserves. To do this, it must compete with the likes of Brazil and Australia, also keen to capture billions of dollars in funding. Kazakhstan has attracted more than $150 billion in foreign investment since its independence from the Russian Federation in 1991. Yet drop-of-a-hat changes to ownership, royalty and tax structures are not uncommon, raising concerns over a potential shift toward resource nationalism.

Details of financial arrangements have yet to be resolved between the Kazakh government, its national oil and gas corporations and participating IOCs, holding up progress on several major projects here, to the extent that Shell recently demobilised staff deployed at Kashagan for second-phase FEED work. The first phase is on 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.

AzerbaijanMounting tensions both within Azerbaijan and between Azerbaijan and neighbouring Armenia are adding to the political sensitivities severely complicating the energy industry at present. The critical link here is the supply of Azerbaijani gas to support construction of the Nabucco pipeline, a major supply conduit for gas between the Caspian region, the Middle East and Europe. Construction of Nabucco is scheduled to commence in 2012, and for the

moment appears to be on track with PSAs formally in place now between each participating country. In the meantime, in a potential effort to settle bubbling domestic discontent, the Azeri government has opened the oil-revenue taps to fund various public works projects and related salaries and employment. Expect FEED and construction work to pick up in the coming months if megaprojects Shah Deniz II and Nabucco proceed as planned.

RussiaDomestically, the Russia finance minister has the nation’s oil barons in his sights once again, announcing a new regime of taxes and the scrapping of some existing systems for the nation’s largest operators. This may have a knock-on effect with oil companies warning of delayed investment which is much needed. It’s a difficult balancing act with the Ministry anxiously looking for ways to scrap a hike in social taxes that has proved damaging to the investment climate. To the untrained eye, the oil industry appears to be flourishing in Russia, but the gains mask an accelerating decline in West Siberia one of the most prolific production provinces, forcing interested parties to venture into even more remote and difficult terrain. Russia has vast gas reserves but needs to move ahead with difficult Arctic LNG projects to boost production output. Political and economical turmoil around the world has intensified international operators resolve to make headway in Russia and the Arctic, where deals have notoriously been difficult to tender for, win and retain.


Caspian

Caspian Salaries

Decrease No Change

56%

0%

44%

Increase

Caspian Hires

Decrease No Change

44%

16%

40%

Increase





“There is a shortage of trained engineering staff, with training programs cancelled in the 70/‘80s and never fully reintroduced.”

Regional OverviewWhereas the oil and gas industry in the UK continues to lament the seemingly punitive tax regulation changes recently implemented aimed at its operators in the North Sea, Norway is benefitting from an influx of investment in support of maximising the further exploration of its offshore assets through a combination of new licenses and tax incentives. Lingering concerns over the Eurozone debt crisis are a backdrop to some degree, but given the international nature and focus of work done here it is unlikely to have any direct effect over inbound design activity in London, Aberdeen, or mainland Europe. Overall it has been a positive first half for the region. As elsewhere, corporations are bracing themselves for potential rate increases, particularly for the shortage of qualified personnel in specific disciplines.

ScandinaviaRapid project expansion continues in what may be termed a North Sea renaissance, driving demand for project personnel across many disciplines locally, though North Sea fabrication activity is largely supported by yards out of Asia Pacific. The Norwegian government is crafting recommendations and policy to ensure operators are given the incentives to maximise every field, with Norway’s oil and energy minister citing that increasing recovery 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 of which will require new technology able to withstand harsh climactic conditions (and meet Norway’s strict environmental regulations) and the development of new shipping routes.

UKThe 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 required. Rates, which were on the decline into the beginning of 2011, have begun to increase thanks to longer contract terms. With the pickup in activity worldwide many contractors who couldn’t previously enjoy the luxury of being choosy have since returned to their favourite locations, projects or employers.

Some put the blame on decreasing new activity on recent UK tax structures, which have changed the book value of North Sea

assets, as potentially diverting investment funds elsewhere. Yet given the higher cost of labour and operation and mature fields, the so-called ‘tax-grab’ seems an easy scapegoat against the more likely driver of new major global prospects and strong oil prices. In spite of this, the UK continental shelf remains competitive overall.

Whereas new E&P activity offshore UK has been on the decline into 2011, decommissioning remains a heavy focus in the UK, presenting an increased demand for related Project Management, Engineering, Planning and site personnel. Disciplines such as Structural and Process Engineers are also in short supply.

Mainland EuropeDensely populated, environmentally aware, highly urbanised, Europe consumes vast amounts of energy yet is dependent on foreign supplies to a larger degree than many other regions. All this leaves Europe tied rather vulnerably to the price of a barrel of oil with all its knock-on effects rippling through many aspects of the economy, most notably the value of the Euro, and vice-versa. Compounding this will be uncertainty surrounding the debt crisis out of Greece. Cost of living is high, as are taxation rates. Yet in spite of doing some of the most technologically-advanced design work in the world, Europe’s engineering staff and contractors are relatively underpaid. Late 2011 and 2010 may hold promise for higher rates thanks to increasing design activity. Safety, Process, and Planners remain the most sought-after disciplines.


Europe

Europe Salaries

Decrease No Change

40%

2%

58%

Increase

Europe Hires

Decrease No Change

29%

3%

68%

Increase





“Most contractors 55+ would rather retire than work for a substantial pay decrease, leaving a gap, which will in turn push rates up.”

Regional OverviewThe political instability felt across much of the Middle East has fortunately not affected all producing countries. What is noticeable is an increasing number of candidates coming from Libya and Bahrain into safer zones in Qatar and the UAE. With oil prices on average higher than in 2010, the region is as attractive as ever given it’s relatively low cost of development and operation and massive supply, ample supply routes and supporting infrastructure.

IraqIraq has started a multi-billion dollar upgrading of its oil export pipelines, a vital element in its plans to boost production. The modernisation of Iraq’s dilapidated energy infrastructure destroyed or rendered useless by years of conflict, sanctions and neglect, is essential to boosting production and exports. Safety and security remain the biggest problem in Iraq and further measures need addressing by the coalition government. The recent surges of bloodshed cast doubts on their ability to control this. Despite the problems Iraq is moving ahead with plans that include a new network of pipelines through neighboring countries. In 2010, Iraq 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 Kirkuk oilfields in northern Iraq to Turkey.

QatarThe completion of megaprojects like Shell’s Pearl Gas-To-Liquids plant has resulted in the demobilisation of tens of thousands of workers recently, mainly construction personnel, though some must remain on-hand for maintenance related work.

Senior LNG expertise without contracts are being snapped up by 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 announced by Shell is expected to revitalise employment statistics in Qatar, though for the moment much of the design work is being handled elsewhere and major staff increases are not expected until eight to twelve months from now. The demobilisation of significant numbers of expats in LNG and construction is welcome news for expertise hungry areas like

Australia and Asia Pacific. Of the demographic outbound from Qatar, a good number are native Australians returning home where similar major project work has opened up during their time away. In spite of a universal Qatarisation program for major employers, the quotas are impossible to fill, so almost all the work is being done by expats.

UAEInterest in reinvesting in Dubai has increased in light of political unrest elsewhere in the region, in spite of a debt load in excess of some 140% of GDP, Dubai is by contrast a relatively safe haven for international investment. It has also remained well insulated against violence and unrest felt across much of the Middle East and North Africa. An influx of candidates released from recently completed projects in Qatar (as well as a small number seeking safer contracts outside of Saudi Arabia or Bahrain) has been noticed, however key talent is being placed almost immediately into other roles elsewhere without ever coming to market.

Even in a nation as wealthy as this, social spending and an acute sensitivity to the general happiness of its population has spurned a commitment of nearly $2 billion for housing loans to shore up shortages felt by Emeratis. Pledges for increased infrastructure spending have also been made recently. These domestic projects will certainly increase demand for construction and project management personnel, though likely not to the detriment of the energy sector. FEED, Project Management, and a significant rise in Piping, Pipeline and Process Engineers are currently most required.


Middle East

Middle East Salaries

Decrease No Change

56%

5%

39%

Increase

Middle East Hires

Decrease No Change

27%

19%

54%

Increase


Regional Comparisons

Key Decrease No Change Increase

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 - Hires

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

Caspian - Salaries and Pay Rates Caspian - Hires

Europe - Salaries and Pay Rates Europe - Hires

Middle East - Salaries and Pay Rates Middle East - Hires

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


Air Energi is a truly global workforce services company operating exclusively in the oil and gas sector.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 30 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

• 1500 consultants currently assigned to major projects

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

• Present in 30 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


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 within the Oil & Gas industry, and areas of Alternative Energy.

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

to match job seekers 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 Oil & Gas candidates.

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

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 industry

hubs of the North Sea, US, Middle East and Asia, 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 850,000 registered users

• Over 11,500 new candidates registering each month

• Industry leading CV database, over 510,000 searchable CVs

• Over 11,000 new vacancies posted each month


Contacts

AmericasAir Resources Americas LLC

6002 RogerdaleSuite 340, Houston Texas, 77072, USA

Tel: +1 281 983 3464 Fax: +1 281 983 3468

[email protected]

Asia PacificAir Energi Group Singapore Pte Ltd

1 North Bridge Road#06-03/04 High Street Centre

Singapore, 179094 Tel: +65 6511 1060Fax: +65 6511 1050

[email protected]

AustralasiaAir Consulting Australia Pty Ltd

Level 4, 46 Edward Street Brisbane, QLD, 4000

Australia Tel: +61 (0)7 3056 0900 Fax: +61 (0)7 3112 2601 [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 and Distribution: Chris Grundy Artwork & Design: Ben Quinton

CaspianAir Energi Caspian LLP

Floor 7, 23 Kulmanov Street060011, Atyrau

Kazakhstan Tel: +7 7122 270 126 Fax: +7 7122 270 128

[email protected]

UK, Europe & AfricaAir Resources Ltd

The Exchange, 3 New York StManchester, M1 4HN

United KingdomTel: +44 (0)870 112 9444Fax: +44 (0)870 112 9445

[email protected]

Middle EastAir Resources Qatar

PO BOX 2953, Darwish Building 87604Area 48, Doha Airport West

Doha, QatarTel: +974 4462 0886Fax: +974 4462 6675

[email protected]

Westhill Business Centre,Arnhall Business Park,

Westhill,Aberdeenshire

AB32 6UFUnited Kingdom

Tel: +44 0870 870 4564 Fax: +44 0870 870 4563

[email protected]

OilCareers Inc,11490 Westheimer Road,

Suite 850Houston,TX 77077

USATel: +1 713 425 6316 Fax: +1 713 783 0067 [email protected]

OilCareer.comDubai Media City

Building 9, Office 23PO Box 500643,

Dubai,UAE

Tel: +9 714 299 3678 Fax: +9 714 299 3946 [email protected]

North AmericaUnited Kingdom Middle East


Workforce Survey H2

Documents

Transcript of Workforce Survey H2