International strife, changing demand present energy staffing challenges
Tobias Read's recent trip to Russia was enlightening, but gloomy.
International sanctions against Russia and the Kremlin's payback, he says, are building a wall between Russia's engineers and Western oil companies, and causing big oil and gas projects to be delayed. And it could get worse.
As CEO of Swift Worldwide Resources, a Houston firm that uses a vast web of connections to pair seasoned energy pros with often temporary project positions at oil companies, Read says he saw firsthand that more Russian engineers don't want to work for international companies. They believe will be forced to stop their work or stop selling products and services as international tensions rise over Russia's actions in Ukraine.
"They don't want to leave their current employment and take a job with a Western company if that job is going to evaporate," Read said. And meanwhile, U.S. and European oil firms are getting reluctant to start up new projects or invest in Russia, largely because funding pools have dried up and because of sanctions and other policies that restrict the industry, he said.
From its perch in Houston and its offices across the globe, Read's staffing firm - through its network and contacts in the white-collar job market - can look deep into the contours of the global oil and gas industry
The firm, originally headquartered in London, started three decades ago working solely with major exploration and production firms. Now it tries to tap a global talent pool to send oil workers to Azerbaijan, Papua New Guinea, Nigeria and other places that may not have readily available engineers to staff companies' new projects.
In an interview with the Chronicle, Read discussed the results of one of Swift's global wage surveys, as well as the oil industry's ever-changing patterns of demand for experienced engineers and project managers with different skills across different regions.
Read said one of the most telling findings in Swift's 2014 wage survey, compared to its 2012 results, is that oil companies this year are paying higher wages to engineers who work on the post-drilling phases of oil and gas projects than they do to drilling engineers and project designers, a sharp reversal from 2012.
"That's reflective of quite a lot of projects globally," Read said. "They've gone through the design phase and they're going into the completion phase, and soon they'll be going into the live running phase."
That's not to say that drilling engineers aren't still highly compensated. They make $3,000 a day in some cases.
It's just that a wave of oil and gas projects that started in recent years are nearing the end of their initial stages. Also, Western oil companies have started to pull back or delay some overseas drilling projects as their investment returns have fallen in recent years.
The United States had 2012's second-highest wages for oil workers, but this year, it didn't make it into Swift's top 10. That's not because wages shrank - they actually grew, Read said - but it's because demand for engineers has skyrocketed in the Middle East and Africa, and wages have climbed in more dangerous regions including Iraq and in Nigeria.
In Iraq, sectarian violence is seen as less of a threat to the oil industry in the southern half of the country than it was three months ago, and many workers are going back to the refineries now. But wages still have risen dramatically in Iraq. And in Nigeria, where corruption, bribery and personal risks have been on the rise, oil companies are paying more to draw top-shelf engineers.
"There's quite a lot of demand in those markets they both have very buoyant petrochemical sectors, but fewer people want to work there," Read said.
Australia, the place where energy project managers earned the industry's highest pay in 2012, still ranks high, but it is recruiting more project commissioning engineers - who test and inspect projects - rather than early-phase managers.
"At the moment the biggest change we're seeing is a slight softening of demand in Australia because some of the coal and gas projects there are not getting the amount of investment they thought they would," as some big oil companies are trying to rein in their spending in Australia, Read said.
Growth in U.S.
Although the U.S. has fallen behind in the ranks of the highest-paying countries, there's still plenty of growth as petrochemical facilities and liquefied natural gas export projects start up along the Texas GulfCoast.
"The U.S. is a huge entrepreneurial environment, and it's going overseas to create an even bigger economic engine," Read said. "We're seeing a proliferation of demand even for the third and fourth tier that we've never seen before."