The regional oil and gas labour market is still holding steady even while hundreds of thousands of jobs have been lost globally, according to the latest industry survey by the recruitment consultant Hays.
“The oil and gas industry is not as bad here as it is in other parts of the world,” said Gary Ward, the Abu Dhabi-based regional head of Hays Oil and Gas.
“We’re not talking about the tens of thousands of hires that was happening five years ago around the GCC, but regionally there is still a lot going on,” Mr Ward said, pointing to examples such as the offshore islands projects by Abu Dhabi National Oil Company and the US$28 billion Al Zour refinery and petrochemical project that Kuwait has said will proceed as planned.
Hays publishes a survey of the industry quarterly, and its next one is due tomorrow. It will show that salaries for skilled oil and gas engineers in the region also are holding up, despite the gloom prevailing in the industry worldwide.
“We’re not looking at increases in regional salaries, but we’re not looking at decreases either,” says Mr Ward.
Hays, together with its local partner Al Nahiya Group, is opening a new Abu Dhabi Oil and Gas office even though national oil companies in the region, like their private sector counterparts, are cutting costs.
“Just because [NOCs] are saving money doesn’t mean they’re stopping hiring,” Mr Ward explains. “It is more that it is affecting the supply chain and they may be cutting the number of suppliers. That is putting pressure on margins, but those who are left getting more. It’s the same from a recruitment point of view – it is a matter of lower margins but increased volume.”
The rest of the world is seeing the effect of the oil price slump flow through to jobs.
In the United States, the latest employment data last week showed the oil and gas sector trimmed another 8,000 jobs in December, bringing the total for the year to 130,000, according to the government’s jobs report.
In the United Kingdom, the offshore sector lost 65,000 jobs last year, with direct and indirect employment falling from 440,000 to 375,000, according to the industry body Oil and Gas UK.
Other high-cost production areas have been vulnerable too – for example the tar sands patch in Canada’s Alberta province. The Canadian Association of Petroleum Producers has estimated there have been more than 35,000 layoffs in the oil and gas sector directly, with perhaps 100,000 jobs lost in total.
“The rest of world is in pain as far as oil and gas industry is concerned. It’s really hurting,” said Mr Ward. “Exploration has been hit particularly hard.”
About $200bn of projects have been cancelled in the past year, and many more billions of dollars worth of projects are no longer being assessed because of the expectation that oil prices will rise only slowly from current levels in the low $30s per barrel.
The long-term calculation by regional oil producers, however, is that their low-cost projects will be best-placed to take advantage of an oil price rebound.
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