hays oil & gas global job index

HAYS OIL & GAS GLOBAL JOB INDEX

Quarter 1 | 2013

HAYS OIL & GASGLOBAL JOB INDEX

WORLDWIDE

Jobs numbers set to bounce back after slow start.


The Global Job Index has recovered well since the holiday period and the Index has now shown two straight years of considerable improvement. In addition, as we discuss in our annual Oil and Gas Salary Guide, the worldwide average salary in the industry increased significantly last year due to solid demand for workers and increasing skills shortages.However the general good news of our Job Index and Salary Guide is perhaps masking some underlying trends that, while not alarming, are a bit disconcerting. In general, there is an air of caution that has seeped into the industry that needs to be recognized and watched over the coming months.

We are all aware of the economic issues facing the EU. Arguably, several European countries have entered into recession and even the strongest economies are seeing tepid job creation. This ongoing economic and political uncertainty, as well as chronically high unemployment in this region, has contributed to a slowdown in China’s economic growth and a build-up of their raw materials inventory. Consequently, commodities prices, especially metals, have fallen steeply after over a decade of relatively steady, strong growth. We have seen significant declines in hiring activity in our mining and resources in most parts of the world as projects are being delayed or shuttered. The question therefore is whether energy prices follow metals downward.

In North America, the economy is growing at a reasonable pace and the overall attitude is cautiously optimistic. However, even here we are seeing some creeping signs of bumps in the road ahead. While unemployment is at a 4-year low at 7.5%, the impact of government spending cuts due to sequestration is unknown but will certainly have a dampening effect on economic growth and the jobs market. In addition, natural gas prices are still low, although they look like they’ve bounced off the bottom and are expected to continue to strengthen. Uncertainty regarding the Keystone pipeline, and increased US oil production has caused a significant drop in the price of Canadian crude. Consequently, the economic viability of some projects is now in question.

Finally, while considerable investment has been made in LNG facilities, with many projects in process and others in planning, it seems as though the industry is headed toward overcapacity. We’ve seen many cycles over the past 30 years and in that time when money has flooded into major capital projects, that’s usually the peak before the downward ride. (And, of course, vice versa.) So experience tells us that we need to be aware of the potential storm clouds on the horizon.

Having said that, we’re cautiously confident about the industry as a whole and believe that the next few years will continue to be strong ones for industry hiring. This will certainly be an interesting year!

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GLOBAL INDEX


NORTH AMERICA

SOUTH AMERICA

Oil operators in North America have rapidly diversified their focus to onshore unconventional resource plays. This change is impacting the amount of investment in riskier exploration activities, particularly in the Gulf of Mexico, where lease sale activity has been comparatively slow as companies are sitting on acreage rather than drilling.

The US market, while experiencing record highs in production in recent times, has also been affected by the delay in some major infrastructure developments including the Keystone project. The election has also played a factor in human capital investment, as companies waited out the election period to see if it would have any impact on the sector.

The Canadian market has softened over the last three to six months due to the lack of progress in the resolution of the transmission issue facing Canadian exporters of crude. With the Keystone and Northern Gateway pipelines continuing to see opposition and increased production levels in the US, Canadian producers are

battling reduced oil prices and degrees of uncertainty around the viability of future projects. This has resulted in a few development projects being suspended or shelved completely, such as Sun Corp’s Voyager project, which has impacted job levels and the urgency to hire. Candidates with strong onshore unconventional-related backgrounds are in high demand, ranging from E&P through to equipment manufacturers and service companies.

As ever, there is high demand for skilled professionals in most disciplines at the 10 to 20 year experience level. As the baby boomers retire, they will take a generation of knowledge with them and many companies are scrambling to fill the management and technical expertise holes being left behind. Thus, Hydrogeologists, Geologists, Petroleum Engineers, Drilling Engineers and Reservoir Engineers are all in high demand.

In Canada, virtually all professionals with SAGD experience are in short supply. This situation is not set to change, with vast numbers of SAGD projects set to come on stream or into development over the next 5 to 10 years.

South America, in particular Brazil, has seen yet another slowdown in market activity with both jobs and salaries cut due to a lack of biding rounds for projects in the region. Petrobras, Brazil’s national oil company, is also tightening its recruitment of staff, creating unease in the marketplace.

Expat salaries have risen, which is a reflection of the need for imported specialist experienced workers. Also, local workers are now expecting a similar package at home as they would receive overseas.

Job numbers may seem low, but this trend is also an indication of the way people are finding jobs mostly through word of mouth or referals.

This traditional style of recruitment will evolve in the region as changes to local content laws and upcoming bidding rounds will be seeing a large rise in jobs related to shipyards. With the lack of talent locally in the shipbuilding industry, the need for foreign talent will increase, forcing job postings online to increase.

IN DEMAND:• GEOLOGISTS

Average salary in North America: US$127,000

• PETROLEUM ENGINEERS Average salary in North America: US$123,200

IN DEMAND:• CONSTRUCTION/INSTALLATION

PROFESSIONALS Average salary in South America: US$119,300

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EUROPE

AFRICA

Despite the decrease in the number of positions during this year’s first quarter, the total number of jobs advertised is on average the same as this time last year. There are many factors at play within the UK market that may cloud the actual number of vacancies including a shift from employers who prefer referrals rather than applications.

Nordic businesses have been affected by the financial crises, causing numerous cuts to job numbers. Businesses in Denmark have also begun laying off employees, making local demand for employment rise.

The UK remains buoyant particularly within E&P businesses along with the EPC/EPCM and engineering consultancy markets. We are starting to see some activity related to the 27th licensing round completed late last year and London remains the place to be for investment in exploration and appraisal.

There is a strong demand for G&P professionals in the Nordics as the Danish Underground Consortium (Maersk Oil, Shell, Chevron and

Nordsofonden) have invested 4.5 billion DKK to expand the Tyra Field in the North Sea.

The demand for talent over the last quarter has been very similar to the run up to Christmas. Skills shortages for geoscience disciplines along with petroleum engineering are likely to continue. The UK market, in particular, is struggling to find candidates with experience in mature field development, near-field exploration and farm-ins. That said, there is strong demand across various engineering disciplines including marine, structural and naval.

Mechanical design and project engineers across subsea, topsides and new build projects are in strong demand in Scotland. Workload for manufactured products both for North Sea and West of Africa has increased hugely this year putting pressure on these skills in particular. Companies in Scotland are expanding at such a pace that they need to increase their QHSE presence to remain compliant with local legislation.

The African market has seen a turbulent start to the year with several high profile political and in-country incidents widely reported in the global media. The down-turn in the general commodities sector appears to have had a knock on effect with confidence in stability/return on investment, and has pushed the index lower than previous months.

That said, the future is very bright for the African market with industrial powerhouses such as China are looking at Africa to secure their future energy consumption demands. In particular, East and

Central Africa remains the place for foriegn investment due to its lower costs and large amount of natural resources.

At present, there is a strong demand for experienced, often expat, professionals who are needed to give guidance on local markets. Many small national or privately-owned operators are relying on importing expertise to help deliver on projects, especially country managers and asset managers.

IN DEMAND:• SUBSEA ENGINEERS

Average salary in Europe: US$107,100

• MARINE/NAVAL ENGINEERS Average salary in Europe: US$81,700

IN DEMAND:• HEALTH SAFETY & ENVIRONMENT

PROFESSIONALS Average salary in Africa: US$69,300

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The recent decline of job numbers in January and February can be attributed to the Chinese New Year holidays. The first quarter is also time when companies pay out bonuses to their employees throughout Asia and take holiday leave which in turn slows the market.

In saying this, the industry is far from stagnant, with the economic state of Europe continuing to affect APAC, global MNCs achieve growth by focusing on the Asian region which results in a steady flow of employment.

Resource-rich Asian has seen continued exploration interest in shale gas/oil deposits. There are environmental concerns relating to the extraction processes of shale gas and this is hampering commercial development in Western Europe leading Asian hydrocarbons to become a high growth area over the coming years. Countries such as China are also keen to reduce their dependence on gas imports.

Offshore construction continues to be an expanding market creating a shortage of Senior Project Managers with mega project experience.

The demand is driven by Singapore’s status as a regional and global hub for design and construction of offshore rigs, FPSO, FSO and topside structures.

Companies are keen to secure a slice of the busy offshore business throughout Asia fuelling high demand for estimators and proposals engineers with strong backgrounds in FPSO or topside projects.

Regional Sales Managers and Business Development Managers are also in demand as global OEM (Original Equipment Manufacturers) are actively increasing their sales teams.

The Middle East is going through a number of challenges thanks to new political movements throughout the region.

The Gulf Cooperation Council (GCC) is undertaking numerous major projects and has become the centre of attraction for many employees who are expecting opportunities to be available in the near future.

There has been a significant shift towards local candidates now preferring to join multinational companies. Joining such businesses

gives them the chance to work in different countries which they believe will provide greater career opportunities.

Many opportunities have emerged in the downstream sector as various projects have now been initiated. This in turn has forced local service companies to increase recruitment of foreign staff, as the Middle Eastern talent pool is drained. The impact of these recruitment drives will be apparent in the coming months.

ASIA

MIDDLE EAST

IN DEMAND:• PROJECT CONTROLS WORKERS

Average salary in Asia: US$73,800

• BUSINESS DEVELOPMENT Average salary in Asia: US$82,200

IN DEMAND:• BUSINESS DEVELOPMENT

PROFESSIONALS Average salary in the Middle East: US$88,600

• PROJECT CONTROLS EXPERTS Average salary in the Middle East: US$89,300

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The first quarter of 2013 was marked by the decrease of the new positions in the oil and gas sector which can be attributed to the global acquisition of the local major TNK-BP by Rosneft.

As the credit rates were approved in mid-February, and the TNK-BP deal was finalised in the beginning of March, causing a major shift in the market. Many workers left their current positions and began their search for more stable employment. This situation hit not only the ex-TNK or Rosneft employees, but also the other market players where major service companies did not have the capacity to offer new positions, as many of their field projects were

frozen. The other factor influencing the decreasing number of positions was the annual bonus payment which traditionally happens in March. Most employees are waiting for the payment before searching for their next job which will increase the number of vacancies in the market.

The majority of candidates in the region are eager to join western companies or Russian companies with expatriate management - i.e. ‘pro-western’ employers. This tendency is caused by international companies offering better compensation and social packages while trying to reduce risks connected with employee’s relocation. Job seekers are increasingly attracted to permanent employment as opposed to temporary assignments, as they are more concerned with stability of work.

With the exception of the December and Christmas slow down, the first quarter of 2013 saw the Australasian Job Index fall to its lowest level for over 15 months. Three factors contributed to keeping the Index in the doldrums.

Whilst most projects continue to progress, an air of financial caution has settled across Australasia, fuelled by continued European economic concerns and looming federal elections. On the other hand and of continuing benefit to stakeholders, the influx of labour from the slowing mining boom is adding to the oil and gas labour pool. Also, state legislatures, most recently in New South Wales, continues to place environmental hurdles in the way of emerging unconventional operators. Sentiment seems to indicate that the factors currently forcing down the Job Index may continue until the end of the calendar year.

As the mega-LNG projects move out of design and into construction phase, we are seeing an increased demand for candidates with new-build LNG experience at trades, engineering and management level. This change of project phase has also lead some of the operators to start hiring and training candidates to run and maintain these facilities,

so skilled technicians, engineers and operators are highly sought after. During this phase there is also a large volume of contracts being put out to tender, creating demand for Business Development Managers, Sales Engineers and Contracts Professionals. Drilling staff remain in high demand for the CSG projects in Queensland.

A recent increase in exploration budgets has seen an increase in jobs for Geoscientists, Geologists and Petroleum Engineers. The continued focus on safety and the environment keeps HSEQ professionals in demand across the country.

COMMONWEALTH OF INDEPENDENT STATES (CIS)

AUSTRALASIA

IN DEMAND:• CONSTRUCTION/INSTALLATION

PROFESSIONALS Average salary in CIS: US$98,500

IN DEMAND:• GEOSCIENCE PROFESSIONALS

Average salary in Australasia: US$170,300

• BUSINESS DEVELOPMENT MANAGERS Average salary in Australasia: US$149,900

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hays-oilgas.com

WHAT IS THE JOB INDEX? The Global Job Index is a quarterly publication featuring news and updates affecting the oil and gas employment market. It provides an insight into fluctuating job numbers, as well as local events which affect employment demand making it a unique and informative resource for the industry professionals.

BACKGROUNDFinding a new job via an online medium is now the norm for any job seeker looking for work. This trend has of course led employers to rely on their web presence, either direct or indirect, to source, attract and drive candidates to apply for their jobs.

The oil and gas industry is no stranger to the use of online media to attract candidates, with globalisation and remote work locations meaning the vast majority of roles in the industry are now resourced using online portals. These sites range from a company’s own online web pages to large recruitment groups, specialist job boards focused on specific geographies, and those dedicated to the oil and gas industry in all its guises across the world. These global boards have grown considerably in the last few years and now contain many thousands of jobs and resumes of users eager to access their next opportunity.

METHODOLOGYOur team of analysts and researchers measure the numbers of live jobs posted on all the major job boards that are specific to the oil and gas industry. These are collated into regional figures and compared against a datum of 1.00 taken from October 2010.

At this time the industry had largely recovered from the global recession, and the oil price reflecting this recovery slowly edging upwards over $80 bbl. Capital had flowed back into the industry boosting exploration, project starts and profits. Recruitment had recovered steadily since the start of 2010 in line with the increase in revenues although there were no significant skill shortages at that time. With expectations of a growing recruitment market through 2011, October 2010 appeared to be an ideal point from which to set our benchmark for the Global Job Index.

Each month since this date we have measured job posting activity on the same sites making sure we are consistent in how and what we measure. From time to time the sites themselves will change the way in which they post and maintain jobs, and this is closely monitored to ensure that this does not alter the results of our research over and above the specific measure of job posting activity we are seeking.

This data is broken down further to give a measure of regional activity and the trends within those regions. This further analysis is essential to oil and gas recruiters that scan the world for available talent.

THE RESULTSHays Oil & Gas publishes its results on a quarterly basis producing the Global Job Index along with dedicated figures for each region; Europe, Africa, Middle East, Russia and CIS, Asia, Australasia, North America and South America.

We serve over 50 countries through our 18 in-country teams.

• Australia

• Brazil

• Canada

• China

• Colombia

• Denmark

• France

• India

• Malaysia

• Mexico

• Netherlands

• New Zealand

• Poland

• Russia

• Singapore

• United Arab Emirates

• United Kingdom

• United States

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hays oil & gas global job index

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