Increased oil and gas activity creates more jobs

The regional energy sector with almost 50% of the world’s oil reserve and around $87 billion-worth of offshore projects has weathered the economic stagnation affecting many other industries throughout the world. The trends within the energy sector are being reflected in the workforce with hiring expected to remain strong throughout the fourth quarter.

“The GCC has seen a major increase in the levels of hires by as much as 25% as their overall outlook in the second half has been ‘optimistic’ as compared to ‘cautious’ in 2010 and 2011,” says Raj Sharma, regional director of the Oil & Gas sector for Hays Oil & Gas, an international recruitment company in the oil and gas industry.

Steady production growth of approximately 10-15% and stable prices have generated higher revenues leading to increased demand for GCC country nationals while the need for expat hires has also remained strong.

The Hays Oil & Gas Global Job Index which charts the number of jobs posted in nine oil and gas portals around the world showed that online job postings in the Middle East rose to an all-time-high in September with the index hitting 1.50, with global job postings standing at 1.60, (the index was set at 1.00 in October 2010 when it was first established).

This is “welcome news and a positive indication of recruitment activity for the remainder of the year” according Matt Underhill, managing director of Hays Oil & Gas.

Job postings are expected to continue increasing along with confidence as the Northern Hemisphere’s winter approaches leading to diminishing stocks and higher prices. The upcoming leadership change in China is also expected to see increased economic investment from the global growth engine which has seen a decline in the rate of economic growth over the last few months.

Another survey carried out by OilCareers.com and Air Energi found that, as with many regions there are the haves and the have-nots. “Those besieged by civil war or other economic repression first need to play catch-up in terms of infrastructure and education of their local workforce before becoming a larger presence on the global energy scene,” says Mark Guest, managing director of OilCareers.com, a specialised recruitment agency.

Iraq remains behind other Middle Eastern countries in terms of infrastructure and related development. While this may be preventing it from meeting its potential as an energy exporter it is creating many opportunities in the short term, such as the large-scale overhaul of its pipeline network in 2011. The country is aiming to produce 10 million bpd by 2017, which would rival Saudi Arabia, the leading OPEC oil producer.

Saudi Aramco on the other hand announced several new finds earlier this year and has boosted output to some of the highest levels in decades.

Iraq and Saudi Arabia will continue to be the driving forces in the region in terms of total investment and spending, particularly in drilling activities. “The region boasts some of the lowest start-up and operational costs, with large numbers of expats on contract who typically enjoy solid remuneration, longer contracts and a very pleasant standard of living,” says Guest.

Qatar has joined the fray in support of Shell’s Ras Laffan refinery which is likely to re-employ many of those laid off when its Pearl gas-to-liquids plant was brought online in the spring of 2011.

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The country’s focus on natural gas has also made it the largest exporter of LNG, although it now faces competition from the Asia pacific. The $6 billion Barazan onshore project has also created more demand in the energy construction and EPC industry.

The UAE is also anticipating growth over the next two years, particularly in the offshore fabrication sector, which will increase due to contracts with Nexen’s Golden Eagle project in the UK, approximately 110 km northeast of Aberdeen.

“UAE-based Lamprell, an engineering and contracting services company, has two contracts for fabrication work to be carried out at its Jebel Ali yard, with a wellhead deck scheduled for completion in the second quarter of 2013 and a three level Production, Utilities and Quarters deck expected to be completed by mid-2014,” says Guest.

Job opportunities in the UAE are being offered at all stages of the oil and gas processes, including FEED, project management, piping and processing. The country has also pledged an additional $40 billion towards energy projects until 2014, ranging from crude and gas to refinery and petrochemical developments. An increase in offshore activity is also expected to create more work as well.

The increase in job postings throughout the region has also led to more competitive offers between oil and gas companies. The survey conducted by OilCareers.com and Air Energi, found that “contract and permanent salary pay rates are projected to increase by 31% and 30% respectively,” says Guest.

“There are always candidates in the market but tempting the specialists away from their current company is difficult as their employer will fight to keep them, knowing how hard they are to replace,” says Nick Beaumont, Oil & Gas team leader of Randstad Middle East, a specialised recruitment agency based in Dubai.

“Your typical salaries are $5000 higher than the last couple of years” says Beaumont. Likewise, in-demand roles have seen increases from 10-20% as businesses pay to attract the talent to positions that are not always in the most desirable of places.

Retention policies have also changed in favor of employees in response to the competitive offers made from hirers. “For nationals there have been as much as 20-30% increases in base salaries,” says Sharma. “The increases were to counter losing staff to other non oil/gas sectors such as public and federal/governmental departments who were paying more.”

According to Sharma, expats have not seen an equitable base salary increase. Instead, they are being offered more material changes including education assistance for eligible dependants, annual leave and some have seen their end of service benefits paid annually and not at the end of service.

Although annual bonuses have previously been discretionary, Sharma forecasts that “candidates could factor in 1 to 3 months base salary as an added signing-on incentive when making their salary projections.”

The study found that higher revenue generated from strong prices and increased production has led to more hires across the board. According to Sharma; NOCs throughout the region have also been increasing their employment offers to include signing-on bonuses paid after 6 months of service, upgrades from economy to business class for family air tickets, interest free car loans and fixed term contracts of 3 and 4 years which allow greater flexibility to offer packages outside of standard pay policy.

Offers between different companies are relatively similar, the challenge is that visa application processes differ substantially from country to country. NOCs sometimes lose candidates because of delays.

“My personal experience over the last two years has been that finding the candidates is not the issue compared to the time taken to eventually get those selected on board,” says Sharma.

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For Beaumont, one of the largest challenges is finding engineering offshore specialists, “there are plenty of candidates that have an engineering skill set on their CV, but they haven’t been given exposure to the specialist area that clients require them to work in,” he says. Despite the challenge in finding the suitable candidates for the job, the Middle East is still one of the most attractive regions for hires in the sector.

Despite all the job opportunities coming out of the region, there is only so much movement around the market. “They will not be able to move as the other opportunities in the region are not massively better than their current packages,” says Sharma.

For many, it comes down to what’s on offer and the candidate’s in the hiring business’s ability deliver what is offered. “Hence some businesses prove much easier to recruit for than others,” says Beaumont.

“The major NOC’s and Operators have a bigger draw than the support companies and contractors.”

Although countries such as Brazil and Australia have been receiving a lot of attention, the Middle East is still a strong player offering some of the most competitive packages in the industry. “I would say that with the packages that are on offer this is one of the best regions to be seeking employment in at the moment,” says Beaumont.