OIL & GAS GLOBAL SALARY GUIDE 2013 Global salaries and recruiting trends.

SURVEY SUMMARY DISCIPLINE AREAS COVERED

COUNTRIES WORLDWIDE REPRESENTED

RESPONDENTS WORK WITH A GLOBAL SUPER MAJOR

RESPONDENTS ARE EMPLOYERS IN THE INDUSTRY

PEOPLE RESPONDED TO THE SURVEY

24 53 2,500+ 8,200+ 25,000+

THANK YOU We would like to express our gratitude to all those organisations and individuals who participated in the collection of data for this year’s survey. More than 25,000 responded, which is approximately 74 per cent up on last year and this has once again ensured that we can produce an informative document to help support your business and employment decisions.

Disclaimer: The Oil & Gas Global Salary Guide 2013 is representative of a value added service to our clients and candidates. Whilst every care is taken in the collection and compilation of data, the survey is interpretive and indicative, not conclusive. Therefore information should be used as a guideline only and should not be reproduced in total or by section without written permission from the producers of this guide.

It is with great delight that we introduce this year’s global oil and gas salary guide. This is the fourth year we have published the document and each year we have seen an increase in the number of respondents taking their time to give us such valuable information and insights into their world of work. This year’s survey saw more than 25,000 professionals and skilled employees in the oil and gas industry respond, giving us more than one million separate pieces of information to collate into findings. As with previous years, it is the trends and movements within the data that make for such interesting reading – indeed every figure tells its own tale!

CONTENTS 2 A global perspective

Section one - salary information

With so much data it can become a question of what to present and publish, however, we have tried to stay true to the goals that we set ourselves when first embarking on such a document. This was namely to produce some meaningful data on how salaries and remuneration change as we move around the world of work in the oil and gas industry. This is then complemented with some informed insights as to what industry events and activities are contributing to the outcomes. We hope you enjoy reading the document, and more importantly it is of assistance to you in your employment dealings.

6 Overview and salaries by country

2012 was a good year for many in the oil and gas world with an increase in salaries, benefits and conditions. The same cannot be said for too many other industries and it would not be stretching the truth to state that more wealth has been created in the oil and gas industry than any other over the last 12 months. With nearly every country around the world striving to secure its own energy future, either through exploration, increased production or developing infrastructure, demand for the oil and gas professional, in all its guises, was most definitely high.

Section two - industry benefits

Our headline figure for the average base salary has once again grown to now sit at $87,300*, showing an 8.5 per cent increase on the previous year. Such an increase now accounts for a 14 per cent rise in base salary in two years alone. That is significant for an industry employing some five million people worldwide.

7 Salaries by discipline area 8 Salaries by company type 9 Contractor day rates by region

12 Overview of benefits 13 Benefits by company type 14 Benefits by region

Section three - industry employment 17 Staffing levels

There were numerous developments contributing to this rise through 2012, not least of which was a proliferation of non-conventional field developments. This was seen by many nations as the route to energy independence and saw a wave of hiring. Indeed many countries eagerly embarked on this path only to discover that the skills didn’t exist, at least not in their own country. This was consequently, for some, their first steps onto the global recruitment market. The other change that this sector saw was an expansion into cities/regions previously untouched by the industry. The likes of Houston, Aberdeen and Perth are still important, just not as important as they were, it would seem.

18 Diversity and movement of workforce

There were some environmental challenges to overcome and for some countries or regions this was a bridge too far. (Development stalled and salaries with it, trends that are easily spotted within our data).

26 Industry outlook

20 Experience and tenure 22 Employment mix

Section four - economic outlook

27 Most significant issues

Despite the general upward trend there were headwinds to overcome. As the year came to a close the oil price edged slowly lower, reflecting continued negative sentiment around the general global economy, and the impact this may have. Most roads led back to Europe in this regard and their continuing debt issues weighed down consumer demand. This in turn impacted manufacturing output, most notably in China. The fragile nature of this scenario has dominated the economic backdrop, and appears likely to continue well into 2013. This said, confidence from those taking this survey has remained high and at least in the oil and gas world, forecasts are for continued optimism, albeit guarded. We would like to take this opportunity to thank all of those individuals that gave up their valuable time to respond to this survey, once again allowing us to produce such a valuable document. We would also like to thank those people in our marketing departments for helping collate and design the guide. Lastly, but by no means least, we would like to thank our consultants and staff for their valuable insights which undoubtedly bring the document to life. Matt Underhill, Managing Director, Hays Oil & Gas Duncan Freer, Managing Director, Oil and Gas Job Search

*Respondents were asked to provide their base salary only in US dollars equivalent, converting foreign currency into US dollars at the time of responding.

2013 Oil & Gas Salary Guide | 1

A GLOBAL PERSPECTIVE

UNITED STATES Energy self-sufficiency now in sight for the US with extensive shale gas developments

BRAZIL A long awaited round of field auctions announced, breathing life back into the market

2 | 2013 Oil & Gas Salary Guide

NORTH SEA The drain of talent to overseas markets intensifies skill shortages

IRAQ Flurry of hiring as a range of new mega-projects kick off

SOUTH KOREA Korean ship yards seek to monopolise vessel and rig fabrication work

AUSTRALIA Australia dominates the LNG market with a multitude of projects under construction

EAST AFRICA East Africa becomes the next big focus for oil and gas majors

2013 Oil & Gas Salary Guide | 3

SECTION ONE SALARY INFORMATION

SECTION ONE: SALARY INFORMATION

Permanent salaries rose 8.5% over the last 12 months.

4 | 2013 Oil & Gas Salary Guide

With almost 50 per cent of those responding experiencing an increase of 5 per cent or more to their salary, this was the second consecutive year of significant rises for the industry.

CHANGES TO SALARIES IN THE LAST 12 MONTHS Increase more than 5%

Increase up to 5%

Remain Static

Decrease 3.7%

2013

49.7%

16.3%

30.3% 4.2%

2012

49.5%

16.6%

29.7%

EXPECTED SALARY CHANGES IN THE NEXT 12 MONTHS Increase more than 10%

Increase between 5-10%

27.5%

29.8%

Increase up to 5%

Remain Decrease Static 1.1%

2013

24%

17.6% 1%

2012

32.4%

30%

20.9%

15.7%

2013 Oil & Gas Salary Guide | 5

SALARY INFORMATION Salaries

Once again we saw the average permanent salary for those in the oil and gas industry rise by a significant amount. On the back of last year’s 6 per cent rise, 2012 delivered another impressive increase in base pay of 8.5 per cent, rising to $87,300* as an average US dollar equivalent worldwide. There would be few industries with such a track record of growth over the last few years in what has been, in the most part, an uncertain economic environment.

ANNUAL SALARIES BY COUNTRY

Local average annual salary

Imported average annual salary

Algeria

45,200

92,400

Angola

53,700

108,700

Argentina

94,200

60,000

Australia

163,600

171,000

Azerbaijan

47,500

133,500

Bahrain

N/A

92,200

Brazil

111,000

131,400

Brunei

N/A

123,100

Canada

123,000

122,500

China

68,300

161,400

Colombia

81,700

106,900

In general the year saw increases for most countries as the global energy industry remained buoyant. It is therefore more interesting to look at some of those that fell and speculate why. There were a number of locations that suffered from issues stemming from political fallout, Iran and Venezuela being the obvious standouts. The delay in auctions in Brazil saw a drop in their previously spiralling salaries (to some this would be a welcome respite). Some parts of Europe continued to suffer from the debt crisis with relatively flat demand, i.e. Spain; and in Poland the environmental lobby combined with a number of disappointing drilling campaigns put the brakes on shale gas developments and in turn local salaries.

Denmark

109,700

148,500

Egypt

41,900

118,500

France

92,800

107,400

Ghana

40,500

121,600

India

38,900

111,800

Indonesia

45,200

146,000

Iran

46,900

68,100

At the top of this year’s table we once again see Australia and Norway. Both countries have limited skilled labour pools and significant workloads, the result is very high pay rates, although both would appear to have met some sort of ceiling. Completing the top five on local salaries, we also see New Zealand, Netherlands and Canada.

Iraq

47,200

124,500

Italy

69,000

84,600

Kazakhstan

41,900

117,200

Kuwait

114,400

79,700

Where imported salaries are concerned, it is once again the frontiers of the industry that are pushing the upper limits of pay. Representing a mix of danger money and hardship allowance in these base salaries, we find Russia’s arctic exploration driving imported skills, and China’s drive on nonconventional skills also pulling in experts on premium rates. Along with Australia, the Caribbean hub for oil and gas, Trinidad & Tobago, rounds off the top five importers by salary level.

Libya

42,200

82,800

Malaysia

47,200

130,200

Mexico

50,000

132,300

Netherlands

123,800

84,900

New Zealand

127,600

110,700

Nigeria

55,100

140,800

Norway

152,600

128,600

Oman

72,600

92,100

Pakistan

32,600

70,000

Papua New Guinea

N/A

145,600

Philippines

35,600

170,000

Poland

42,500

139,600

Portugal

51,000

125,800

Qatar

N/A

77,900

Romania

34,400

105,200

Russia

57,900

151,100

Saudi Arabia

86,500

81,000

As we forecast in 2011, Northern Europe also came through with increasing salaries reflecting a lack of skills to meet burgeoning demand. Demographic issues contributed to this shortage, as did a ‘brain drain’ of professionals overseas, which continues to take its toll on the UK talent pool in particular. The relative low salary levels in the UK clearly contribute to this effect, and it will take further significant rises domestically before we see the trend reversing.

Singapore

84,900

103,900

South Africa

75,300

93,100

South Korea

81,400

141,800

Spain

68,900

97,900

Sudan

31,100

59,800

At the time of writing the oil price remained above $80 bbl and at this level we should see salaries continue to rise as we progress into and through 2013. This rise however will be modest and we would expect the increase to be somewhere in the bracket of 4 to 6 per cert. We also expect to see more ‘flattening’ of the market as skills move around the world to alleviate pockets of acute demand, and employers move to those countries at the bottom of our tables to take advantage of lower cost levels.

Thailand

49,400

142,400

Trinidad and Tobago

66,200

168,800

Turkey

77,400

101,900

United Arab Emirates

N/A

79,400

United Kingdom

93,400

93,100

United States of America

121,400

123,800

Venezuela

62,200

113,000

Vietnam

53,300

132,700

Yemen

35,100

97,300

While the headline growth is impressive, the individual country figures once again portray the numerous forces shaping remuneration in the industry. Be they issues stemming from politics, the environment, the economy or in some cases armed conflict, each country’s salary tells a story. Overall, we have seen the recruitment industry working well to iron out the extreme variations in pay, with those at the top of the table seeing salaries plateau or in some cases ease slightly, and those at the bottom seeing higher demand for cheaper talent, which in turn raises salaries. As the markets continue to become more efficient, with national borders less restrictive to skilled migration, and the movement of people more prevalent, this is inevitably the outcome.

The major headwind in the world economy in late 2012 was the slowdown in growth within the Chinese manufacturing sector. It is therefore somewhat surprising that their local and imported salary figures exhibit such growth. However, taking a closer look at the market this is clearly a reflection of their quest to become self reliant on energy in the future driving exploration and infrastructure development, than any immediate increase in domestic energy demand. Other countries showing big increases include Iraq, Nigeria, Thailand and Argentina. The first two reflect significant project demand; Argentina is playing catch up on the previous year’s sluggish growth; and Thailand is increasingly home to many oil and gas professionals on rotation on offshore facilities in South East Asia or North Western Australia. In general the Asia Pacific countries have fared well in the year with Singapore, South Korea and Malaysia joining China in those with positive increases. Aside from the USA which saw a relatively flat year for remuneration (all be it at a high level) we did see increasing rates in Mexico and Colombia, two hot spots for the region.

*Respondents were asked to provide their base salary only in US dollars equivalent, converting foreign currency into US dollars at the time of responding. 6 | 2013 Oil & Gas Salary Guide

VP/Director

65,500

100,900

184,300

57,200

80,600

124,000

191,400

47,400

53,300

96,700

139,600

N/A

42,800

53,600

74,900

103,900

174,600

75,200

39,400

75,100

102,400

151,700

181,300

Electrical

59,600

37,100

50,800

73,100

98,000

N/A

Estimator/Cost Engineer

N/A

38,100

51,700

68,500

103,800

N/A

Geoscience

58,500

43,400

58,800

101,800

144,500

230,000

Health, Safety and Environment (HSE)

55,000

39,900

58,100

76,900

107,500

148,500

Instrumentation, Controls & Automation

50,600

N/A

47,700

68,700

104,000

N/A

Logistics

57,800

34,300

40,200

70,200

85,200

114,500

Maintenance

54,100

41,100

47,400

87,700

108,600

N/A

Marine/Naval

62,700

41,100

55,300

87,900

112,800

142,200

Mechanical

53,700

38,900

54,100

75,600

108,300

158,500

Piping

49,400

34,100

43,100

68,900

104,800

N/A

Process (chemical)

54,900

38,600

52,200

81,200

117,300

166,100

Production Management

68,300

36,200

52,100

77,600

117,600

240,600

Project Controls

56,100

42,700

54,200

85,300

118,100

169,000

Quality Assurance/Quality Control (QA/QC)

51,300

40,000

52,400

76,300

102,400

123,200

Reservoir/Petroleum Engineering

51,800

37,500

66,300

96,800

124,100

153,300

Structural

52,800

34,500

51,100

68,400

101,200

191,700

Subsea/Pipelines

63,500

37,000

65,900

102,400

149,500

251,200

Supply Chain/Procurement

42,200

37,000

54,600

72,700

97,700

141,300

Technical Safety

55,300

31,900

50,400

75,600

110,500

142,400

Operator/ Technician

Graduate

Intermediate

Business Development/Commercial

53,500

35,600

48,900

Construction/Installation

58,700

46,400

Commissioning

62,000

Downstream Operations Management

59,300

Drilling

Following the downturn of 2008, those projects put into development the following year were starting to make their way through to operational phases, and it is in both the downstream operations and upstream production management figures that we saw this effect – both sets of figures climb, particularly in the more junior ranks, implying volume recruitment. Conversely, the disciplines associated with exploration were somewhat flat after sizeable rises in 2012, although high levels of production ensured it was a busy year in drilling.

In line with more project work coming through Final Investment Decision (FID), the core disciplines of electrical, mechanical, piping and process engineering all had a good year, making up for some lost ground in 2012. This was also mirrored in HSE and commissioning specifically in the more senior roles, where experienced managers of projects in these disciplines were hard to find. When considering the various levels of seniority in employment, and in line with the previous section, salaries were up. However we saw the biggest increase in graduate salaries rising by more than 12 per cent to just under US$40,000 equivalent. For an industry that has historically under-invested in entrylevel skills this is welcome news. At other levels, salaries for operators/technicians also saw rises of 9 per cent, as did the top end of the scale with base salaries in VP/Directors rising by the same amount.

SECTION FOUR: ECONOMIC OUTLOOK

Breaking the data down into discipline areas and comparing against the previous year’s figures provides us an interesting insight into what has been driving the market.

SECTION ONE: SALARY INFORMATION

Senior

Manager Lead/ Principal

ANNUAL SALARIES BY DISCIPLINE AREA

SECTION TWO: INDUSTRY BENEFITS

Salaries

SECTION THREE: INDUSTRY EMPLOYMENT

SALARY INFORMATION

2013 Oil & Gas Salary Guide | 7

SALARY INFORMATION Salaries

Senior

Manager Lead/ Principal

VP/Director

82,600

119,300

162,500

53,100

72,000

107,300

181,700

48,400

54,800

82,000

126,300

172,000

30,700

50,600

61,700

85,500

166,200

76,800

55,200

71,900

103,900

131,700

252,100

Oil Field Services

53,400

37,900

49,300

70,700

98,300

166,500

Operator

58,000

48,800

75,000

105,900

153,800

244,000

ANNUAL SALARIES BY COMPANY TYPE

Operator/ Technician

Graduate

Intermediate

Consultancy

56,100

36,100

50,600

Contractor

68,800

40,800

EPCM

57,000

Equipment Manufacture & Supply

50,400

Global Super Major

This data is fascinating. With such a healthy oil price, it is no surprise that the operators are increasing salaries by about 12 per cent, however, it was a surprise to see the global super majors lagging their competition with only a 6 per cent rise. This aside, we saw the largest rise at more than 16.7 per cent within the equipment manufacturers. There is some conjecture as to why this is happening, however, it is probably no coincidence that this industry was the ‘least well paid’ of the company types surveyed in 2011. It is only now after a couple of years of positive revenue that they are starting to claw back some of the lost ground in what they can afford to pay their workforce. We have also seen technological demands in the industry

accelerating at a faster rate than at any point in history. Much of the onus for meeting these demands rests with those in this sector and this in turn is driving talent needs and the salaries needed to recruit effectively. The other ‘under achievers’ historically in terms of salaries are the service contractors, and these companies also saw a good return in 2012 with an increase of 11 per cent. In terms of the magnitude of the base salaries by company type, global super majors and other operators continue to lead the market as we would expect, however the relative levels between these two groups makes for some interesting reading in itself. As is evident ‘big is not always best‘.

YEARLY SALARY CHANGES BY COMPANY TYPE

Consultancy

Contractor

EPCM Equipment Manufacture & Supply Global Super Major

Oil Field Services

Operator

+6.4%

2013 $96,000 2012 $90,200 +11%

2013 $83,000 2012 $74,800

+8.4%

2013 $98,900 2012 $91,200 2013 $71,900

+16.7%

2012 $61,600 +5.6%

2013 $107,700 2012 $102,000 2013 $73,400

+9.1%

2012 $67,300 2013 $115,500 2012 $103,300

8 | 2013 Oil & Gas Salary Guide

+11.8%

CONTRACTOR DAY RATES BY REGION

Operator/ Technician

Intermediate

Senior

Manager Lead/ Principal

VP/Director

Northern Europe

430

490

720

850

1,130

Western Europe

390

360

550

770

940

Eastern Europe

300

250

340

460

N/A

CIS

350

440

580

830

880

Middle East

250

320

400

610

1,000

North Africa

310

300

440

560

N/A

West Africa

320

350

610

750

N/A

East/South Africa

310

270

450

820

790

South East Asia

330

320

450

750

1,060

North East Asia

240

340

630

940

1,260

Australasia

690

700

940

1,330

1,590

North America

420

490

760

840

1,110

South America

340

320

480

630

N/A

The other significant rise was in the manager/ lead/principal level, particularly in East/South Africa and North Asia. The latter region saw good rises across all levels for contractor rates being led in the most part by large engineering firms out of South Korea (with China not far behind). Constructing and fabricating FPSOs, vessels, and large scale subsea infrastructure, the need for senior engineering talent is driving up rates, and also saw them elevated to the top of the table for importing talent (see table on page 6).

Background for this section Only where the sample size is large enough have we listed figures in these tables. Where not enough responses were received, entries are returned as N/A. Permanent staff salaries are the figures returned by respondents as their base salary in US dollar equivalent figures (respondents were asked to convert their salary into US dollars using xe.com at the time of responding) excluding one-off bonuses, pension, share options and other non-cash benefits, for those working on a yearly payroll. Those on a daily payroll are extracted and listed separately. The average salaries listed under local labour are representative of respondents based in their country of origin. Salaries listed under imported labour are representative of those who are working in that country but originate from another. Contractor rates are listed as US dollar equivalent day rates as listed by respondents. Notes: EPCM - Engineering, procurement and construction management; HSE - Health, safety and environment; QA/QC - Quality assurance/quality control.

2013 Oil & Gas Salary Guide | 9

SECTION FOUR: ECONOMIC OUTLOOK

SECTION THREE: INDUSTRY EMPLOYMENT

Our data shows healthy rises in day rates for most disciplines across all levels. The operator/technician level saw some of the largest rises and at these lower levels this implies volume hiring with plenty of project work available. As highlighted in this report it is the construction/installation companies along with the large EPCMs that have most need for contractors, and with a wave of new facilities now being built and coming through design we would expect the operator/ technician rates to continue rising.

SECTION ONE: SALARY INFORMATION

Salaries

SECTION TWO: INDUSTRY BENEFITS

SALARY INFORMATION

SECTION TWO INDUSTRY BENEFITS

SECTION TWO: INDUSTRY BENEFITS

Bonuses account for rise in benefits.

10 | 2013 Oil & Gas Salary Guide

The rise in bonuses continues and now represents the dominant mechanism by which companies attract and retain their talent. 5 LARGEST INCREASES IN BENEFITS

Value of the benefit as a percentage of the overall package

2013

2012

Increase

Bonuses

5.80%

4.78%

21%

Health Plan

2.90%

2.59%

12%

Home leave allowance/flights

2.30%

2.00%

15%

Hardship

1.50%

1.26%

19%

Housing

3.40%

3.13%

9%

2013 Oil & Gas Salary Guide | 11

INDUSTRY BENEFITS

Overview of industry benefits

The significant figure in our data here is that the number of people not receiving benefits has once again dropped, this year to just under 35 per cent. We know from our own activities that benefits and allowances are a vital part of recruitment in the industry, where tailoring to the individual, the project and the business are increasingly commonplace. In this way companies are able to engage far more with the individual they are seeking to employ and retention rates are bolstered. To some, the fact that 35 per cent do not receive any benefits is still incredible.

OVERVIEW OF INDUSTRY BENEFITS

The main mechanism by which employers are engaging with candidates is through bonuses and this is where we have seen the largest growth, rising 7.8 per cent since 2011 to a total of 42.8 per cent of our respondents receiving some sort of bonus. Healthcare and home leave allowances were the two other movers in 2012 rising 3.16 per cent and 2.56 per cent respectively.

Bonuses

Percentage that receive the benefit

Commission

In terms of what these benefits were worth to individuals there was not a great deal of change from 2011. Tax assistance rose slightly as a percentage of what it is worth, however, slightly fewer were receiving it, so it has not made much of an impression on the overall remuneration pool.

Tax Assistance

Breaking down the data into company types we see a similar pattern across all sectors. The exceptions included a jump in healthcare provision within equipment manufacturers and global super majors, along with home leave allowance showing a small increase across the board.

Pension

Health Plan Car/Transport/ Petrol Housing

7.5% 10.2% 9.5% 12.7% 18.9% 10.8% 26% 10.8% 19.1% 10.2% 19.2% 17.9% 18.2%

Hardship allowance

10.4%

Hazardous danger pay

6.7%

Share scheme

Schooling

Training

Overtime

12 | 2013 Oil & Gas Salary Guide

13.8%

Home leave allowance/ flights

Meal allowance

Background: The bar chart shows two figures related to benefits that employees in the oil and gas industry receive. The first figure represents the percentage of respondents that receive that particular benefit, i.e. 42.8% of respondents receive some sort of bonus. The second figure represents the value of that benefit stated as a percentage of their overall package for those that receive it, which in the case of bonuses is 13.8%.

42.8%

No Benefits

12.9%

16.5%

16.1% 14.3% 12.1% 6.7% 12.0% 7.8% 14.4% 10.8% 12.6% 15.1% 17.5% 34.6%

Average percentage of their total package

Company benefits

TOP BENEFITS BY COMPANY TYPE GLOBAL SUPER MAJOR/OPERATOR 35% 23% 19%

43%

Bonuses

29%

Health Plan

24%

Housing

18%

Car/Transport/Petrol

20%

18%

Home leave allowance/flights

19%

17%

18%

Overtime

39%

42% 28% 23% 22% 16% 13%

Home leave allowance/flights Car/Transport/Petrol

30%

No Benefits

OILFIELD SERVICES/CONSULTANCY 33% 22%

Health Plan

Pension

Pension

Bonuses

Car/Transport/Petrol

Health Plan

Housing

No Benefits

EQUIPMENT MANUFACTURER & SUPPLY

Bonuses

Bonuses

Health Plan

16%

Car/Transport/Petrol

16%

Housing

Housing

15%

Pension

Meal allowance

15%

Home leave allowance/flights

30%

No Benefits

38%

No Benefits

Background: Graphs here show the top benefits by company type and the percentage of people who receive them. 2013 Oil & Gas Salary Guide | 13

SECTION FOUR: ECONOMIC OUTLOOK

EPCM/CONTRACTOR

SECTION THREE: INDUSTRY EMPLOYMENT

SECTION TWO: INDUSTRY BENEFITS

Almost 65 per cent of the respondents receive some benefit or allowance above their base pay, the highest rate of participation since the survey was launched four years ago.

SECTION ONE: SALARY INFORMATION

INDUSTRY BENEFITS

INDUSTRY BENEFITS Regional benefits

As with previous years Asia remains the region in which more allowances and benefits are paid out as a percentage of the overall package than any other region. The Middle East is not far behind, with Africa and South America next. Europe and North America continue to weight their salaries towards basic salary and consequently benefits are relatively light in comparison. In terms of regional differences we identified a number of interesting patterns. In South America health plans are given to far more employees than any other region. They also pay out a high proportion of meal allowances, at a level not seen elsewhere.  In Asia there is a distinct absence of pension payments, as well as overtime. This was offset by having the highest payments of bonuses.

Whilst the Middle East and Asia continue to deliver higher levels of benefits across most categories, this is in the most part offset by lower basic salaries. Indeed the inter relationship between base salary and benefits should not be ignored when considering regional differences in overall remuneration. Perhaps even more of a factor for some regions is the level of tax on gross pay, and this is where the majority of the Middle East clearly plays its trump card, having a zero tax on earnings.

TOP BENEFITS BY REGION AFRICA

ASIA 37% 25% 21%

29%

Health Plan

Housing

20%

Home leave allowance/flights

20%

Car/Transport/Petrol

19%

27%

10% 9%

24%

Housing

Home leave allowance/flights

Meal allowance

26%

No Benefits

No Benefits

COMMONWEALTH OF INDEPENDENT STATES 33%

11%

Health Plan

Car/Transport/Petrol

19%

AUSTRALASIA

Bonuses

24% 22%

Pension

36%

12%

43%

Bonuses

30%

Bonuses

20%

Pension

19%

Health Plan

17%

Car/Transport/Petrol

14%

Home leave allowance/flights

12%

Overtime

43%

No Benefits

Bonuses

Health Plan Home leave allowance/flights

Housing

Meal allowance

Pension

40%

No Benefits

Background: Graphs here and overleaf show the top benefits by region and the percentage of people who receive them. CIS includes Russia and the former Soviet Republics. 14 | 2013 Oil & Gas Salary Guide

SECTION ONE: SALARY INFORMATION

INDUSTRY BENEFITS

TOP BENEFITS BY REGION EUROPE

MIDDLE EAST 30% 19%

12% 9% 7%

29%

Pension

26%

Health Plan

24%

Car/Transport/Petrol

22%

Overtime

18%

Meal allowance

49%

NORTH AMERICA

35% 13% 11% 10%

Housing

Home leave allowance/flights

Health Plan

Car/Transport/Petrol

Overtime

27%

No Benefits

No Benefits

SOUTH AMERICA 37%

22%

Bonuses

Bonuses

39%

Bonuses

Health Plan

39%

Health Plan

24%

Pension

21%

Car/Transport/Petrol

17%

Overtime

13%

Training

34%

No Benefits

Meal allowance

Pension

Car/Transport/Petrol

Housing

25%

No Benefits

2013 Oil & Gas Salary Guide | 15

SECTION FOUR: ECONOMIC OUTLOOK

22%

40%

Bonuses

SECTION THREE: INDUSTRY EMPLOYMENT

SECTION TWO: INDUSTRY BENEFITS

Regional benefits

SECTION THREE INDUSTRY EMPLOYMENT

SECTION THREE: INDUSTRY EMPLOYMENT

Confidence remains high with almost a quarter of employers expecting salaries to rise by 10 per cent or more in the next year.

16 | 2013 Oil & Gas Salary Guide

The contractor base in the industry has remained relatively static since 2011. We also see the use of contractors has continued to predominate in the construction and installation disciplines. However, looking ahead the market does not have the same confidence as last year that this contract base will increase. While it is still high, more of our sample believes contractor numbers will remain static.

CONFIDENCE THAT STAFFING LEVELS WILL CHANGE IN THE NEXT 12 MONTHS 24.8%

Increase more than 10%

23.9%

Increase between 5-10%

23.2%

Increase up to 5%

22.9%

Remain static

5.2%

Interestingly, the use of expats appears to be falling, with more than 20 per cent of those responding stating that their company did not employ people on an expat basis. This is very much in line with the increasing trend to localise the workforce. The level of those expecting the number of expatriates to increase remains stubbornly high however. This was the same in 2011, despite this year’s data showing a contraction in expat use contradicting that forecast.

PERCENTAGE OF STAFF EMPLOYED ON A TEMPORARY OR CONTRACT ASSIGNMENT 38.9% 29.7% 18.9% 12.5%

More than 20%

Between 5-20%

Up to 5%

None

Decrease

EXPECTATION THAT CONTRACTOR LEVELS WILL CHANGE IN THE NEXT 12 MONTHS

DISCIPLINE AREAS IN WHICH CONTRACTORS ARE EMPLOYED IN OIL AND GAS Always

Sometimes

Never

Subsea/Pipelines

48.3%

38.8%

12.9%

Drilling & Well Delivery

39.5%

35.7%

24.8%

Increase

Remain the same

Decrease

Engineering & Design

43.7%

45.5%

10.8%

Equipment & Supply

46.5%

38.3%

44%

PERCENTAGE OF WORKFORCE EMPLOYED AS AN EXPAT 36%

15.2% 22.8%

Geoscience & Petroleum Engineering

30.5%

39.6% 44.3% 16.1%

25.5%

20.1% 21.1%

More than 10%

Between 5-10%

Up to 5% None

HSE & QAQC

37.6%

42.7%

19.7%

Ops, Maintenance & Production

40%

43.7%

16.3%

Petrochemicals

32.8%

41.7%

25.5%

Project Controls

36.1%

45.3%

18.6%

EXPECTATION THAT EXPAT LEVELS WILL CHANGE IN THE NEXT 12 MONTHS

43.4% 48.5% 8.1% Increase

SECTION ONE: SALARY INFORMATION

world. Energy demand continues to edge up and demand for skills continue to outstrip supply in many regions.

Remain the same

Decrease

2013 Oil & Gas Salary Guide | 17

SECTION FOUR: ECONOMIC OUTLOOK

Confidence levels in the industry on staffing demand remains high, in line with rising salary costs. However, the level has come off from 2012 albeit only slightly. Through the latter part of 2011 and early 2012 European debt worries dominated business confidence. As the year progressed the possibility of serious financial melt-down in Europe receded and the markets became similarly afflicted with concern for the downturn in growth within China, an economy that has helped to prop up global activity for the last few years. This concern is having an impact on the wider economy, however, less so in the oil and gas

SECTION TWO: INDUSTRY BENEFITS

Staffing levels

SECTION THREE: INDUSTRY EMPLOYMENT

INDUSTRY EMPLOYMENT

INDUSTRY EMPLOYMENT

Diversity & movement of workforce

Disappointingly we didn’t find an increase in the number of women working in the industry. With skill shortages as they are this appears to be the ideal time to take advantage of what should be a sizeable proportion of the workforce, unfortunately it appears an opportunity missed. Regionally the Americas are faring better than other regions, as the only two continents with more than 10 per cent of female workers. The Middle East, Africa and Asia are once again at the lower end of the scale. The spread of discipline splits amongst women in the industry remains the same as last year, with Business Development, Project

Controls and HSE as the largest sectors of employment for females. There has been a small aging of the working population within our sample and this is in line with the years of experience as documented in the figure below. While overall the global data does not show any significant issues with demographics, the same cannot be said of specific markets. The market with the most acute issue is the US with more than 55 per cent of respondents over 50 years of age. We believe that this is already driving the high demand for talent in the US and Canada, that would appear to exceed current project and production needs.

In line with our own experience, the number of oil and gas professionals working overseas continues to increase. In 2012 this percentage has risen to 47.4 per cent, up from the previous year’s figure of 42.6 per cent. This trend is due to a number of factors, primarily the promotion of inward skilled migration by nation’s governments that facilitates the growth. With skill shortages as they are, we do not expect it will be long before there are more oil and gas professionals overseas than there are in their own home countries.

DIVERSITY OF STAFF

AGE DEMOGRAPHICS

REGIONAL GENDER DIFFERENCES Male Australasia

Asia

Africa

Europe

CIS

Middle East

North America

South America

Male

Female

24 and under

90.9% 9.1%

25-29

93.5% 6.5%

30-34

94.4% 5.6%

35-39

91.7% 8.3%

40-44

91.7% 8.3%

45-49

96.9% 3.1%

50-54

89.8% 10.2%

55-59

89.7% 10.3%

60-64

65 and over WORKING AT HOME OR ABROAD

52.6% Home

18 | 2013 Oil & Gas Salary Guide

47.4% Abroad

Female

2.6% 5.9% 12.4% 22.4% 16.2% 22.9% 14.0% 17.6% 13.6% 12.0% 12.0% 6.8% 11.3% 6.6% 9.3% 3.9% 6.1% 1.3% 2.5% 0.5%

Diversity & movement of workforce

Of all the sections in this report, this one gives us the most insight into the markets around the world and how they are faring. High levels of project work, lack of home grown talent and drives on localising the workforce can all be identified within these figures.

largest importer of skills, although localisation of staff levels did manage to make a small dent in the levels of those imported. In Asia there was a significant increase in local participation, again we believe due to those returning home to higher rates of pay.

In Australia, the overall percentage of imports dropped, however we also know that the workforce grew at a significant rate, and this demand was filled with Australian nationals. The proportion of Australian nationals working at home once again grew for the third year running. The Middle East continues to be the

Moving the other way we saw something of an exodus of foreign nationals from Europe, most of which were heading east to chase the dollars. Africa continued to increase its imports as did South America as wages increased.

In terms of nationals working overseas (see table below) the figures support three big movers in the export of staff. These include; Asian nationals, primarily from the sub-continent, but also the Philippines and China; Africa, with nationals mostly heading north to Europe; and more recently as the data shows South Americans heading to both Europe and North America.

SECTION TWO: INDUSTRY BENEFITS

MOVEMENT OF THE WORKFORCE IMPORTED WORKFORCE VERSUS LOCAL WORKFORCE Imported labour 49.4%

Asia

18.2%

Africa

35.6%

Europe

14.2%

CIS

58.9%

Middle East

86.4%

North America

27.8%

South America

33.0%

Local labour 50.6%

81.8% 64.4% 85.8% 41.1%

SECTION THREE: INDUSTRY EMPLOYMENT

Australasia

13.6% 72.2% 67.0%

WORKING OVERSEAS VERSUS WORKING IN HOME COUNTRY Working overseas 28.8%

Asia

48.1%

Africa

23.8%

Europe

43.2%

CIS

34.7%

Middle East

23.5%

North America

31.5%

South America

42.5%

Working in home country 71.2% 51.9%

SECTION FOUR: ECONOMIC OUTLOOK

Australasia

SECTION ONE: SALARY INFORMATION

INDUSTRY EMPLOYMENT

76.2% 56.8% 65.3% 76.5% 68.5% 57.5% 2013 Oil & Gas Salary Guide | 19

INDUSTRY EMPLOYMENT Experience and tenure

In 2012 we reported a large influx of new and experienced hires into the oil and gas industry. This saw record numbers of people in the zero to four years experience bracket. This year these numbers remain high, although some have moved through into the following band with the net effect of increasing the experience levels across the whole sample. The changes, however, are relatively small and indicate a more ‘steady state’ market than in previous years when the market was emerging from a downturn. In terms of disciplines, the construction and project controls figures have both increased their average experience level. This would

suggest that the wave of projects coming through the industry has gone through its peak and the big ‘flex’ in headcount (those with zero to four years experience) is behind us. There was little change in most of the other disciplines, including those in the sub-surface areas. Again we have seen only a small change in the tenure of respondents with a small increase. As the market settles into this particular cycle we would expect tenure to continue to increase, albeit gradually. Should the market turn down then this may well accelerate as ‘last in: first out’ principles start to take hold.

Last year we started to measure where oil and gas professionals sought their new roles. To recruiters there are a number of useful observations that we can see derive from numbers. Firstly that traditional newspaper advertising continues to disappear as a source of job hunting. We also saw a small decline in those seeking work through internal company websites, or internal moves. On the increase was head hunting and the use of agencies. Job board use remains level at just over 15 per cent.

YEARS OF EXPERIENCE OIL & GAS INDUSTRY

28.3% 23.4% 23.5% 24.8% 0-4 years

5-9 years

10-19 years

20+ years

FOR SPECIFIC DISCIPLINE AREAS 0-4 years

5-9 years

10-19 years

20 + years

Construction/ Installation

27.8%

19.6%

21.8%

30.8%

Project Controls

23.7%

25.1%

27.1%

24.1%

Geoscience

25.5%

24.5%

21.6%

28.4%

Subsea/ Pipelines

23.4%

25.1%

21.8%

29.7%

20 | 2013 Oil & Gas Salary Guide

TIME IN CURRENT ROLE 2013

24.6% 29.2% 24.7% 13.7% 7.8% Less than 1 year

1-2 years

3-5 years

6-10 years

10+ years

2012

26.0% 25.0% 28.7% 12.0% 8.3% Less than 1 year

1-2 years

3-5 years

6-10 years

10+ years

SOURCE OF NEW EMPLOYMENT

6.1% Newspaper

21.0%

12.4%

15.0%

Company website

Online job board

Word of mouth

7.9%

7.1%

Internal move

Other

16.0%

14.5%

Head hunted

Agency

2013 Oil & Gas Salary Guide | 21

SECTION ONE: SALARY INFORMATION SECTION TWO: INDUSTRY BENEFITS

Tenure edged up slightly from last year’s figures, reflecting a less volatile market but one which continued to drive hiring.

SECTION THREE: INDUSTRY EMPLOYMENT

Experience and tenure

SECTION FOUR: ECONOMIC OUTLOOK

INDUSTRY EMPLOYMENT

INDUSTRY EMPLOYMENT Employment mix

In last year’s data we saw most companies (outside of the constructors/installers) changing their mix of employment to include more permanent staff, at the expense of contractors (direct or through an agency). This was appropriate for a market where confidence was sky high.

This year, as confidence has come off its highs, we’ve seen the trend reverse with employers seeking more flexibility in their workforce. The most pronounced shift occurred within the super majors and operators, closely followed by the consultancies.

EMPLOYMENT MIX BY COMPANY TYPE Permanent

Global Super Major

52.6%

Operators

59.5%

EPCM

53.1%

Equipment Manufacturer & Supplier

80.7%

Oil Field Services

60.9%

Consultancy

42.9%

Contractors

47.1%

Permanent/ Part-Time

Contracted Direct

14.2%

1.5%

1.4%

Contracted through agency

31.7% 24.2%

14.9%

20.7%

24.6%

1.6%

2.0% 3.5% 3.3% 2.5%

10.3% 7.0% 15.4%

20.2% 26.4%

27.4%

24.0%

26.4%

PERCENTAGE CHANGE FROM 2012 to 2013 GLOBAL SUPER MAJOR

OPERATORS

-6.9%

-4.7% -0.6%

-1.3% 2.4%

0.1% 5.1%

22 | 2013 Oil & Gas Salary Guide

5.9%

Employment mix

EQUIPMENT MANUFACTURER & SUPPLIER

1.8% -1.6% -0.5%

1.4%

0.3%

1.6%

SECTION TWO: INDUSTRY BENEFITS

0.0%

CONSULTANCY

OIL FIELD SERVICES

0.5%

-5.3% -0.8%

-0.9% 0.4% 0.0%

CONTRACTORS

-1.5% -0.1% 1.2% 0.4%

1.3% 4.8%

 ost of last year’s gains M in permanent hires were reversed this year as economic concern saw a move towards more flexible employment solutions.

2013 Oil & Gas Salary Guide | 23

SECTION THREE: INDUSTRY EMPLOYMENT

-3.1%

SECTION FOUR: ECONOMIC OUTLOOK

EPCM

SECTION ONE: SALARY INFORMATION

INDUSTRY EMPLOYMENT

SECTION FOUR ECONOMIC OUTLOOK

SECTION FOUR: ECONOMIC OUTLOOK

Confidence was delicately balanced in the year with high profits from a buoyant oil price offset by concerns over European debt and a slowdown in China’s growth.

24 | 2013 Oil & Gas Salary Guide

Skill shortages are now by far the major concern for employers in the industry.

employer’s concerns in the current employment market

37.3% 25.3% 11.8% 8.7% Skills shortages

Economic instability

7.2% 8.1% Immigration/overseas visa program

Security/safety caused by social unrest

Environmental concerns

Safety regulations

1.6% Other

2013 Oil & Gas Salary Guide | 25

ECONOMIC OUTLOOK Industry outlook

These figures remain largely in line with 2011, which represents high levels of confidence in comparison to figures given in other years. This is a pleasing result for those involved in talent acquisition, showing that the market still has a great deal to offer both employers and job seekers alike. In 2008, before the economic downturn, the skill shortages were acute in a few select places. This caused salaries to spiral upwards, jeopardising many of the projects that caused the demand in the first place.

This cycle has seen widespread demand, but without the critical spikes. This said it is without doubt that investment ‘rates of return’ are being tested in such locations as Australia and Brazil, however, we are yet to see this stall project development. The key factors affecting the market in late 2012 included, on the positive side, a high oil price, driven by growing energy demand. This is giving operators plenty of revenue to drive

development. Balancing this positive sentiment is concern around China’s growth and whether Europe will re-emerge as the trigger to create a ‘meltdown’. For now both forces are balancing each other and producing a steady, buoyant market. It would, however, not take much to push the markets out of kilter either way, so it is with some interest that we enter 2013. Whether or not the current positive feeling turns to trepidation we will have to wait and see.

EMPLOYER’S CONFIDENCE IN THE CURRENT EMPLOYMENT MARKET 2013

26.0% 47.8% 20.7% 5.5% Extremely positive

Positive

Neutral

Negative

2012

26.7% 46.8% 20.8% 5.7% Extremely positive

Positive

Neutral

Negative

EMPLOYER’S GEOGRAPHICAL FOCUS OVER THE NEXT 12 MONTHS OUTSIDE THEIR OWN REGIONAL AREA

16.6%

16.3%

13.4%

13.3%

Middle East

Europe

CIS

Australasia

12.2%

10.4%

9.5%

8.3%

Asia

South America

North America

Africa

26 | 2013 Oil & Gas Salary Guide

SECTION ONE: SALARY INFORMATION

ECONOMIC OUTLOOK Most significant issues

Economic worries were conversely waning as were those concerns around environmental factors and safety. Social unrest and immigration issues remain steady and at relatively low levels.

EMPLOYER’S CONFIDENCE IN THE CURRENT EMPLOYMENT MARKET

Skills shortages

All

37.3%

Economic instability

Environmental Safety Concerns regulations

25.3%

Immigration/ overseas visa program 11.8%

Security/Safety Other caused by social unrest 8.7%

7.2%

8.1%

Africa Asia

SECTION THREE: INDUSTRY EMPLOYMENT

SECTION TWO: INDUSTRY BENEFITS

In terms of the worries for employers in the industry, it is clear that skill shortages are their number one concern. This is a change from last year when this issue was on a par with those around the economy, and would indicate that the pendulum continues to swing towards a candidate-led market.

SECTION FOUR: ECONOMIC OUTLOOK

Australasia CIS Europe Middle East North America South America

2013 Oil & Gas Salary Guide | 27

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