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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+

It is with great delight that we introduce this years 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 years 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! 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. 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. 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. 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 didnt 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. 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). 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

CONTENTS
2 A global perspective

Section one - salary information 6 Overview and salaries by country 7 Salaries by discipline area 8 Salaries by company type 9 Contractor day rates by region

Section two - industry benefits 12 Overview of benefits 13 Benefits by company type 14 Benefits by region

Section three - industry employment 17 Staffing levels 18 Diversity and movement of workforce 20 Experience and tenure 22 Employment mix

Section four - economic outlook 26 Industry outlook 27 Most significant issues

THANK YOU
We would like to express our gratitude to all those organisations and individuals who participated in the collection of data for this years 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.

*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

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

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

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

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

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

2 | 2013 Oil & Gas Salary Guide

2013 Oil & Gas Salary Guide | 3

SECTION ONE SALARY INFORMATION


Permanent salaries rose 8.5% over the last 12 months.

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% 2013 49.7% Increase up to 5% 16.3% Remain Static 30.3% 4.2% Decrease 3.7%

SECTION ONE: SALARY INFORMATION

2012

49.5%

16.6%

29.7%

EXPECTED SALARY CHANGES IN THE NEXT 12 MONTHS Increase more than 10% 2013 27.5% Increase between 5-10% 29.8% Increase up to 5% 24% Remain Decrease Static 1.1% 17.6% 1% 2012 32.4% 30% 20.9% 15.7%

4 | 2013 Oil & Gas Salary Guide

2013 Oil & Gas Salary Guide | 5

Salaries

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 years 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. 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 countrys 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. 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. At the top of this years 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. 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 Russias arctic exploration driving imported skills, and Chinas 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. 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 years 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. 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. 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.

ANNUAL SALARIES BY COUNTRY


Algeria Angola Argentina Australia Azerbaijan Bahrain Brazil Brunei Canada China Colombia Denmark Egypt France Ghana India Indonesia Iran Iraq Italy Kazakhstan Kuwait Libya Malaysia Mexico Netherlands New Zealand Nigeria Norway Oman Pakistan Papua New Guinea Philippines Poland Portugal Qatar Romania Russia Saudi Arabia Singapore South Africa South Korea Spain Sudan Thailand Trinidad and Tobago Turkey United Arab Emirates United Kingdom United States of America Venezuela

Local average annual salary 45,200 53,700 94,200 163,600 47,500 N/A 111,000 N/A 123,000 68,300 81,700 109,700 41,900 92,800 40,500 38,900 45,200 46,900 47,200 69,000 41,900 114,400 42,200 47,200 50,000 123,800 127,600 55,100 152,600 72,600 32,600 N/A 35,600 42,500 51,000 N/A 34,400 57,900 86,500 84,900 75,300 81,400 68,900 31,100 49,400 66,200 77,400 N/A 93,400 121,400 62,200 53,300 35,100

Imported average annual salary 92,400 108,700 60,000 171,000 133,500 92,200 131,400 123,100 122,500 161,400 106,900 148,500 118,500 107,400 121,600 111,800 146,000 68,100 124,500 84,600 117,200 79,700 82,800 130,200 132,300 84,900 110,700 140,800 128,600 92,100 70,000 145,600 170,000 139,600 125,800 77,900 105,200 151,100 81,000 103,900 93,100 141,800 97,900 59,800 142,400 168,800 101,900 79,400 93,100 123,800 113,000 132,700 97,300

ANNUAL SALARIES BY DISCIPLINE AREA


Business Development/Commercial Construction/Installation Commissioning Downstream Operations Management Drilling Electrical Estimator/Cost Engineer Geoscience Health, Safety and Environment (HSE) Instrumentation, Controls & Automation Logistics Maintenance Marine/Naval Mechanical Piping Process (chemical) Production Management Project Controls Quality Assurance/Quality Control (QA/QC) Reservoir/Petroleum Engineering Structural Subsea/Pipelines Supply Chain/Procurement Technical Safety

Operator/ Technician 53,500 58,700 62,000 59,300 75,200 59,600 N/A 58,500 55,000 50,600 57,800 54,100 62,700 53,700 49,400 54,900 68,300 56,100 51,300 51,800 52,800 63,500 42,200 55,300

Graduate 35,600 46,400 47,400 42,800 39,400 37,100 38,100 43,400 39,900 N/A 34,300 41,100 41,100 38,900 34,100 38,600 36,200 42,700 40,000 37,500 34,500 37,000 37,000 31,900

Intermediate 48,900 57,200 53,300 53,600 75,100 50,800 51,700 58,800 58,100 47,700 40,200 47,400 55,300 54,100 43,100 52,200 52,100 54,200 52,400 66,300 51,100 65,900 54,600 50,400

Senior 65,500 80,600 96,700 74,900 102,400 73,100 68,500 101,800 76,900 68,700 70,200 87,700 87,900 75,600 68,900 81,200 77,600 85,300 76,300 96,800 68,400 102,400 72,700 75,600

Manager Lead/ Principal 100,900 124,000 139,600 103,900 151,700 98,000 103,800 144,500 107,500 104,000 85,200 108,600 112,800 108,300 104,800 117,300 117,600 118,100 102,400 124,100 101,200 149,500 97,700 110,500

VP/Director 184,300 191,400 N/A 174,600 181,300 N/A N/A 230,000 N/A 114,500 N/A 142,200 158,500 N/A 166,100 240,600 169,000 123,200 153,300 191,700 251,200 141,300 142,400

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

*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

Vietnam Yemen

2013 Oil & Gas Salary Guide | 7

SECTION FOUR: ECONOMIC OUTLOOK

SECTION THREE: INDUSTRY EMPLOYMENT

SECTION TWO: INDUSTRY BENEFITS

148,500

SECTION ONE: SALARY INFORMATION

SALARY INFORMATION

SALARY INFORMATION

Salaries

Salaries

ANNUAL SALARIES BY COMPANY TYPE


Consultancy Contractor EPCM Equipment Manufacture & Supply Global Super Major Oil Field Services Operator

Operator/ Technician 56,100 68,800 57,000 50,400 76,800 53,400 58,000

Graduate 36,100 40,800 48,400 30,700 55,200 37,900 48,800

Intermediate 50,600 53,100 54,800 50,600 71,900 49,300 75,000

Senior 82,600 72,000 82,000 61,700 103,900 70,700 105,900

Manager Lead/ Principal 119,300 107,300 126,300 85,500 131,700 98,300 153,800

VP/Director 162,500 181,700 172,000 166,200 252,100 166,500 244,000

CONTRACTOR DAY RATES BY REGION


Northern Europe Western Europe Eastern Europe CIS Middle East North Africa West Africa East/South Africa South East Asia North East Asia Australasia North America South America

Operator/ Technician 430 390 300 350 250 310 320 310 330 240 690 420 340

Intermediate 490 360 250 440 320 300 350 270 320 340 700 490 320

Senior 720 550 340 580 400 440 610 450 450 630 940 760 480

Manager Lead/ Principal 850 770 460 830 610 560 750 820 750 940 1,330 840 630

VP/Director 1,130 940 N/A 880 1,000 N/A N/A 790 1,060 1,260 1,590 1,110 N/A

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.

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.

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).

YEARLY SALARY CHANGES BY COMPANY TYPE 2013 $96,000 2012 $90,200 2013 $83,000 2012 $74,800 2013 $98,900 2012 $91,200 2013 $71,900 2012 $61,600 2013 $107,700 2012 $102,000 2013 $73,400 2012 $67,300 2013 $115,500 2012 $103,300 +11.8% +9.1% +5.6%
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.

Consultancy

+6.4%

Contractor

+11%

EPCM Equipment Manufacture & Supply Global Super Major

+8.4%

Oil Field Services

Operator

8 | 2013 Oil & Gas Salary Guide

2013 Oil & Gas Salary Guide | 9

SECTION FOUR: ECONOMIC OUTLOOK

+16.7%

SECTION THREE: INDUSTRY EMPLOYMENT

SECTION TWO: INDUSTRY BENEFITS

SECTION ONE: SALARY INFORMATION

SALARY INFORMATION

SALARY INFORMATION

SECTION TWO INDUSTRY BENEFITS


Bonuses account for rise in benefits.

The rise in bonuses continues and now represents the dominant mechanism by which companies attract and retain their talent.
SECTION TWO: INDUSTRY BENEFITS
5 LARGEST INCREASES IN BENEFITS Value of the benefit as a percentage of the overall package

2013 Bonuses Health Plan Home leave allowance/flights Hardship Housing 5.80% 2.90% 2.30% 1.50% 3.40%

2012 4.78% 2.59% 2.00% 1.26% 3.13%

Increase 21% 12% 15% 19% 9%

10 | 2013 Oil & Gas Salary Guide

2013 Oil & Gas Salary Guide | 11

Overview of industry benefits

Company 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. 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. 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. 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.

OVERVIEW OF INDUSTRY BENEFITS Percentage that receive the benefit Bonuses 42.8% 13.8% 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% 12.9% 10.4% 16.5% 6.7% 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

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.

Commission

Tax Assistance

Pension

Health Plan Car/Transport/ Petrol Housing Home leave allowance/ flights Hardship allowance Hazardous danger pay Meal allowance

TOP BENEFITS BY COMPANY TYPE EPCM/CONTRACTOR 35% 23% 19% 18% 18% 17%
Health Plan Bonuses

GLOBAL SUPER MAJOR/OPERATOR 43% 29% 24% 20% 19% 18% 39%
No Benefits Health Plan Bonuses

Housing Car/Transport/Petrol Home leave allowance/flights

Pension

Housing Home leave allowance/flights

Overtime

Car/Transport/Petrol

30%

No Benefits

Share scheme

EQUIPMENT MANUFACTURER & SUPPLY 42% 28% 23% 22% 16% 13%
Health Plan Bonuses

OILFIELD SERVICES/CONSULTANCY 33% 22% 16% 16% 15% 15%


Bonuses

Schooling

Health Plan

Car/Transport/Petrol Pension

Car/Transport/Petrol Housing Pension Home leave allowance/flights

Training

Housing

Overtime
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%. 12 | 2013 Oil & Gas Salary Guide

Meal allowance

30%

No Benefits

38%

No Benefits

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

SECTION THREE: INDUSTRY EMPLOYMENT

SECTION TWO: INDUSTRY BENEFITS

SECTION ONE: SALARY INFORMATION

INDUSTRY BENEFITS

INDUSTRY BENEFITS

Regional 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 37% 25% 21% 20% 20% 19%
Health Plan Bonuses

TOP BENEFITS BY REGION ASIA 43% 29% 24% 24% 22% 19%
Health Plan Bonuses

EUROPE 30% 22% 19% 12% 9% 7%


Pension Bonuses

MIDDLE EAST 40% 29% 26% 24% 22% 18% 49%


No Benefits Housing Bonuses

Housing Home leave allowance/flights Car/Transport/Petrol

Car/Transport/Petrol Housing

Health Plan

Home leave allowance/flights

Car/Transport/Petrol

Health Plan

Home leave allowance/flights

Overtime

Car/Transport/Petrol

Pension

Meal allowance

Meal allowance

Overtime

36%

No Benefits

26%

No Benefits

27%

No Benefits

AUSTRALASIA 33% 27% 12% 11% 10% 9%


Health Plan Car/Transport/Petrol Home leave allowance/flights Overtime Bonuses

COMMONWEALTH OF INDEPENDENT STATES 30% 20% 19% 17% 14% 12% 43%
No Benefits Bonuses

NORTH AMERICA 37% 35% 22% 13% 11% 10%


Pension Bonuses

SOUTH AMERICA 39% 39% 24% 21% 17% 13% 34%


No Benefits Bonuses Health Plan

Pension

Health Plan Home leave allowance/flights

Health Plan

Meal allowance

Housing

Car/Transport/Petrol

Pension

Meal allowance

Overtime Training

Car/Transport/Petrol

Pension

Housing

40%

No Benefits

25%

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 2013 Oil & Gas Salary Guide | 15

SECTION FOUR: ECONOMIC OUTLOOK

SECTION THREE: INDUSTRY EMPLOYMENT

SECTION TWO: INDUSTRY BENEFITS

SECTION ONE: SALARY INFORMATION

INDUSTRY BENEFITS

INDUSTRY BENEFITS

Staffing levels

24.8% 23.9% 23.2% 22.9% 5.2%

Increase more than 10% Increase between 5-10% Increase up to 5% Remain static

38.9% 29.7% 18.9% 12.5%


None Up to 5%

More than 20%

Between 5-20%

Decrease

DISCIPLINE AREAS IN WHICH CONTRACTORS ARE EMPLOYED IN OIL AND GAS Always
Subsea/Pipelines

EXPECTATION THAT CONTRACTOR LEVELS WILL CHANGE IN THE NEXT 12 MONTHS Never 12.9%

48.3%
Drilling & Well Delivery

38.8%

Increase

Remain the same

39.5%
Engineering & Design

35.7%

24.8%

Decrease

43.7%
Equipment & Supply

45.5%

10.8%

PERCENTAGE OF WORKFORCE EMPLOYED AS AN EXPAT 36% 22.8% 20.1% 21.1%


More than 10%

SECTION THREE: INDUSTRY EMPLOYMENT

46.5%

38.3%

15.2%

Geoscience & Petroleum Engineering

Between 5-10%

30.5%
HSE & QAQC

44%

25.5%

Up to 5% None

37.6%

42.7%

19.7%

Ops, Maintenance & Production

EXPECTATION THAT EXPAT LEVELS WILL CHANGE IN THE NEXT 12 MONTHS

40%
Petrochemicals

43.7%

16.3%

32.8%
Project Controls

41.7%

25.5%

36.1%
16 | 2013 Oil & Gas Salary Guide

45.3%

18.6%

43.4% 48.5% 8.1%


Increase Remain the same Decrease
2013 Oil & Gas Salary Guide | 17

SECTION FOUR: ECONOMIC OUTLOOK

SECTION THREE: INDUSTRY EMPLOYMENT

Sometimes

39.6% 44.3% 16.1%

SECTION TWO: INDUSTRY BENEFITS

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

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

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

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 years data showing a contraction in expat use contradicting that forecast.

CONFIDENCE THAT STAFFING LEVELS WILL CHANGE IN THE NEXT 12 MONTHS

PERCENTAGE OF STAFF EMPLOYED ON A TEMPORARY OR CONTRACT ASSIGNMENT

SECTION ONE: SALARY INFORMATION

SECTION THREE INDUSTRY EMPLOYMENT

INDUSTRY EMPLOYMENT

Diversity & movement of workforce

Diversity & movement of workforce

Disappointingly we didnt 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 years figure of 42.6 per cent. This trend is due to a number of factors, primarily the promotion of inward skilled migration by nations 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.

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. 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

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. 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.

DIVERSITY OF STAFF REGIONAL GENDER DIFFERENCES Male Australasia 90.9% 9.1% 93.5% 6.5% 94.4% 5.6% 91.7% 8.3% 91.7% 8.3% 96.9% 3.1% 89.8% 10.2% 89.7% 10.3% Female

AGE DEMOGRAPHICS Male 24 and under Female

IMPORTED WORKFORCE VERSUS LOCAL WORKFORCE Imported labour Australasia Asia Africa Europe CIS Middle East North America South America 49.4% 18.2% 35.6% 14.2% 58.9% 86.4% 27.8% 33.0% 72.2% 67.0% 85.8% 41.1% 13.6% 81.8% 64.4% 50.6% Local labour

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%

25-29

Asia

30-34

35-39

Europe

40-44

CIS

45-49

Middle East

50-54

WORKING OVERSEAS VERSUS WORKING IN HOME COUNTRY Working overseas Australasia Asia Africa Europe CIS Middle East North America 28.8% 48.1% 23.8% 43.2% 34.7% 23.5% 31.5% 42.5% 76.5% 68.5% 57.5%
2013 Oil & Gas Salary Guide | 19

North America

Working in home country 71.2% 51.9%

55-59

South America

60-64

76.2% 56.8% 65.3%

65 and over WORKING AT HOME OR ABROAD

52.6%
Home 18 | 2013 Oil & Gas Salary Guide

47.4%
Abroad

South America

SECTION FOUR: ECONOMIC OUTLOOK

SECTION THREE: INDUSTRY EMPLOYMENT

Africa

SECTION TWO: INDUSTRY BENEFITS

MOVEMENT OF THE WORKFORCE

SECTION ONE: SALARY INFORMATION

INDUSTRY EMPLOYMENT

INDUSTRY EMPLOYMENT

Experience and tenure

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.

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

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

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 19.6% 21.8% 30.8%

Construction/ Installation

27.8%

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 21.0%

Project Controls

23.7%

25.1%

27.1%

24.1%

6.1% Geoscience 25.5% 24.5% 21.6% 28.4%


Newspaper

12.4%
Company website

15.0%
Online job board

Word of mouth

Subsea/ Pipelines

23.4%

25.1%

21.8%

29.7%

16.0%
Head hunted

14.5%
Agency

7.9%

7.1%

Internal move

Other

20 | 2013 Oil & Gas Salary Guide

2013 Oil & Gas Salary Guide | 21

SECTION FOUR: ECONOMIC OUTLOOK

SECTION THREE: INDUSTRY EMPLOYMENT

SECTION TWO: INDUSTRY BENEFITS

SECTION ONE: SALARY INFORMATION

INDUSTRY EMPLOYMENT

INDUSTRY EMPLOYMENT

Employment mix

Employment mix

In last years 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, weve 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.

EPCM

EQUIPMENT MANUFACTURER & SUPPLIER

-3.1% 0.0% 1.4% 1.6% -1.6% -0.5%

1.8%

0.3%

EMPLOYMENT MIX BY COMPANY TYPE Permanent Permanent/ Part-Time Contracted Direct Contracted through agency OIL FIELD SERVICES CONSULTANCY

Global Super Major Operators EPCM Equipment Manufacturer & Supplier Oil Field Services Consultancy Contractors

52.6% 59.5% 53.1% 80.7% 60.9% 42.9% 47.1% 3.3%

1.5%

14.2% 1.4%

31.7% 24.2% 20.7% 2.0% 10.3% 7.0% 15.4% 26.4% 24.0% CONTRACTORS -0.9%

0.5% 0.4% 0.0%

-5.3% -0.8% 1.3% 4.8%

14.9%

3.5% 27.4% 26.4%

20.2%

2.5%

PERCENTAGE CHANGE FROM 2012 to 2013 GLOBAL SUPER MAJOR OPERATORS

-1.5% -0.1% 1.2% 0.4%

-6.9% -0.6% 2.4% 5.1%

-4.7% -1.3% 0.1% 5.9%

22 | 2013 Oil & Gas Salary Guide

2013 Oil & Gas Salary Guide | 23

SECTION FOUR: ECONOMIC OUTLOOK

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

SECTION THREE: INDUSTRY EMPLOYMENT

1.6%

24.6%

SECTION TWO: INDUSTRY BENEFITS

SECTION ONE: SALARY INFORMATION

INDUSTRY EMPLOYMENT

INDUSTRY EMPLOYMENT

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 Chinas growth.

Skill shortages are now by far the major concern for employers in the industry.
SECTION FOUR: ECONOMIC OUTLOOK

employers 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
24 | 2013 Oil & Gas Salary Guide

Security/safety caused by social unrest

1.6%
Other
2013 Oil & Gas Salary Guide | 25

Environmental concerns

Safety regulations

Industry outlook

Most significant issues

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 Chinas 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.

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.

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.

2013

26.0% 47.8% 20.7% 5.5%


Extremely positive Positive Neutral Negative 2012 All Africa Asia Australasia EMPLOYERS GEOGRAPHICAL FOCUS OVER THE NEXT 12 MONTHS OUTSIDE THEIR OWN REGIONAL AREA CIS Europe Middle East North America South America
Asia South America North America

Skills shortages

Economic instability

Environmental Safety Concerns regulations

Immigration/ overseas visa program 11.8%

Security/Safety Other caused by social unrest 8.7% 7.2% 8.1%

37.3%

25.3%

26.7% 46.8% 20.8% 5.7%


Extremely positive Positive Neutral Negative 16.6%
Middle East

16.3%
Europe

13.4%
CIS

13.3%
Australasia

12.2%
Africa

10.4%

9.5%

8.3%

26 | 2013 Oil & Gas Salary Guide

2013 Oil & Gas Salary Guide | 27

SECTION FOUR: ECONOMIC OUTLOOK

SECTION THREE: INDUSTRY EMPLOYMENT

EMPLOYERS CONFIDENCE IN THE CURRENT EMPLOYMENT MARKET

EMPLOYERS CONFIDENCE IN THE CURRENT EMPLOYMENT MARKET

SECTION TWO: INDUSTRY BENEFITS

SECTION ONE: SALARY INFORMATION

ECONOMIC OUTLOOK

ECONOMIC OUTLOOK

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