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Oil, gas salaries move higher amid shortage of skilled labor – survey

03.11.2013  |  HP News

The continued shortage of skilled labor in the oil and gas industry coupled with expanding demand is presenting a significant challenge and jeopardizing safety standards.


The continuing shortage of skilled labor in the oil and gas industry coupled with expanding demand is presenting a significant workforce challenge and jeopardizing safety standards in the industry, according to a new report released Monday.

The report, published by international jobs board OilCareers.com and partner Air Energi, emphasizes that heightened safety concerns, economic instability and a strong oil prices, along with the ongoing skills shortage -- particularly in the LNG and subsea sectors -- will continue the trend for oil-related salaries to push higher.

While economic instability currently ranks as the highest concern for those surveyed, the shortage of skilled labor in the industry is a major consideration with far-reaching consequences for safety and security within the industry.

Nearly one third of survey participants identified the ongoing skills shortage as the biggest threat to the sector, while a lack of skilled trainers was identified as a major training issue by more than 20%.

While the news is troubling for the industry, employees in oil and gas benefit from higher wages in the face of labor force shortages and significant industry growth. In particular, employee packages are seeing a general upward trend, in particular for those positions considered to be high risk.

"The recent tragic events in Algeria have underscored existing safety concerns throughout the oil and gas industry," said Mark Guest, managing director of OilCareers.com.

"Positions in certain geographic areas have historically attracted higher compensation to reflect the safety issues tied to the work location. It is clear, though, that the industry must concentrate on developing the workforce in order to ensure knowledge is passed on and the required experience is in place to manage the world's oil and gas reserves."

Increasingly high levels of activity currently under way have contributed to a strong candidates' market, the authors said, though rates remain stable and the trend toward permanent hires versus contractors observed in 2012 continues. Fortunately, the US still holds a long-standing pool from which to recruit from.

Throughout the US, 2013 is expected to continue to be a big year for operators with the rapid development of shale gas and shale oil plays affecting the world energy spectrum, even over the past six months. Canada and Alaska are also ramping up significantly as the development of Arctic reserves becomes a reality.

"The skills shortage is a major challenge the industry must overcome to continue to thrive," said Ian Langley, group executive chairman of Air Energi. "The shortage of subsea and LNG personnel is being felt throughout the industry with significant effect in terms of project costs and delays. It's clear that without the right people on the ground we won't get the reserves out of the ground."

The authors said they surveyed more than 170,000 oil and gas professionals worldwide. The seven major oil and gas producing regions are represented with respondents drawn from over 50 countries. More than 15,500 were either direct recruiters or senior decision makers.

The full report, titled Global Oil & Gas Workforce Survey: Expectations for hires and pay rates in the oil and gas industry (H1) 2013, is available for review at the OilCareers website. The report includes specifics for each international region.

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Robert Kennedy

The Oil & gas industry is paying for its earlier mistakes to fast track individuals into higher management positions in an attempt to reduce manpower costs and spread management competencies due to a preceived notion that the job can be learned and mastered from a book. Now they face a shortage of competent and experienced manpower because new comers to the industry have been trying to make a name and a mark introducing cost saving initiatives. This will open up new opportunities for mentors like myself to bring the workers up to speed. I can assure you that the individual employees will not pay and it will be up to the industry as a whole to foot the bill.

Paul Hodder

I agree completely with the editorial. In my experience as a Contract Trainer for a variety of oil refining companies, recruits rarely come with the required education in math and sciences that will enable them to be easily trained. They seem to need basic subjects improved before they begin their technical training.

Gustavo Heins

In any case, first is the safety


Well Duuuuh!! (apologies for the sarcasm): What else could be expected from 20+ years of the MBA Mantra, "Do more with less"?! The incident at Chevron's RIchmond refinery is another marker: I fully expect to see more of these types of incidents because of the continual squeezing of staffing levels, no traiing budgets and no hiring. The inexorable outcome of the obsessive focus on short-term returns is catching up and the remedy will be quite painful to the corporate bottom line, but that's what it's going to take to dig out of the situtation.

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