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Employment trends in the oil and gas sector

26/09/13 Adam Walker Director

Successive surveys show that wages for North Sea oil and gas jobs are rising faster than the rest of the world due to a severe skills shortage. Just one survey of many, carried out by oil and gas news website Rigzone, shows the average wage for an energy professional in Europe has risen from £55,000 in 2010 to £71,000 this year – a rise of 29%.

Europe is only second behind the boom area of Australia in compensating its workers for work, with those working in drilling gaining nearly £80,000 per year. Government investment and tax breaks for producers has kick-started the oil and gas sector, which was thought to be in decline.

The lack of a clear path of progression from apprenticeships to fully-paid positions caused by the presumption of a managed decline of North Sea oil and gas assets, coupled with some of the UK’s highest-skilled staff being lured by bigger wages as expat contractors abroad, means that demand far outstrips supply in the sector.

The Government and large corporates such as ConocoPhilips, Shell Oil, BP etc are spending huge amounts of money to boost oil and gas production in the North Sea, with that money trickling down to workers. £13.5bn – a record investment in the North Sea region – will be spent this year on oil and gas installations. The industry appears to be in a second boom period due to the relatively high oil price and the development of technology which is improving extraction techniques.

Not a single respondent to a survey of North Sea employers conducted by the Aberdeen and Grampian Chamber of Commerce said their activity in the region would decrease; 60% planned to up production and exploration; 40% said it would stay the same.

“The sector is in good health with capacity being utilised, investment increasing and optimism about the future,” said Robert Collier, chief executive of Aberdeen and Grampian Chamber of Commerce.

Indeed, the working capacity is stretched to its limit, the survey shows: 66% of services contractors, and four in ten operators of oil and gas fields, said they were suffering from staff shortages. 450,000 workers are now employed in the UK energy industry, according to Oil and Gas UK, an industry body. The whole sector is worth £40bn a year to the UK economy. But plenty more are needed. Until enough skilled workers can be trained up to fill posts, those already trained in the sector will be able to command high salaries and competitive terms for the foreseeable future.