Oil and gas contractor rates set to rise by 15 per cent in 2013

Friday 20 September 2013

Oil and gas contractors are more in demand in 2013, with temporary worker hiring rates rising by 15 per cent over the year according to a survey conducted by recruitment website Oilandgaspeople.com.

It was found that 70 per cent of companies in the sector are worried that rates are rising too fast. It is thought this is the result of the UK’s skills crisis within the oil and gas sector. Critics say the industry is feeling the impact of a lack of investment in skills, as well as top talent leaving for higher paid jobs around the world. 

Oilandgaspeople.com chief executive Kevin Forbes commented: “Our survey shows that with increased investment in North Sea Oil, demand for qualified staff is set to reach an all-time high, which will exacerbate an already serious skills shortage.”

“[It’s] a problem that is being further exacerbated as UK candidates head abroad to earn even higher wages with a huge demand for qualified expats globally.”

According to the survey, oil and gas firms blame this skills shortage on three factors.

Thirty-five per cent blamed long-term underinvestment into skills development within the industry. The lack of investment was due to an assumption that the province was declining. 

It is believed that this had led to a shortage of skilled people within every type of job in the oil and gas sector. 

In addition, 37 per cent of those surveyed suggested that many North Sea operators and supply chain companies underestimated the impact new technologies would have on extracting oils that are difficult to access and low grade oils. The success of these tools meant that these types of oil became economically viable. 

Meanwhile, almost half of those surveyed said highly skilled UK workers are being attracted abroad thanks to higher pay and the generous packages that come with relocating abroad or contracting overseas. This is particularly occurring in Australia and South East Asia, it was noted. 

According to Mr Forbes, pay and conditions are on the up. Indeed, they are “increasing at the same time as UK oil and gas companies try to compete for a dwindling number of skilled staff.”

He continued: “The companies are right to pinpoint the dual impact of historic lack of training and pressure from well-paid jobs abroad.”

Mr Forbes added that while the media has given a lot of coverage to the supposed decline of North Sea Oil, in actual fact there are still between 30 and 40 years left in the region. What’s more, estimates are constantly increasing as new fields are uncovered. 

In conclusion, the expert noted: “With the record investment in North Sea Oil in the last few months, this pressure on wages and skilled staff does not look likely to end anytime soon.”

This follows news that investment in oil and gas is set to increase, with companies in the sector feeling confident about the future.

Research from Barclays latest Global E&P Spending Update found that spending on exploration and production would rise by ten per cent during 2013.

Furthermore, the level of demand for oil and gas is still far higher than supply, meaning that prices should be kept relatively high. 

By Victoria McDonnell

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