Hays Oil & Gas - January 2009

Hotspots

New projects are being pushed back due to the lower barrel price, and investment is now being driven towards production optimisation of existing assets. For this reason, senior level exploration and production facilities engineers, as well as subsurface and subsea candidates are in demand.

The coming quarter

The immediate impact of the oil price reduction is that feasibility studies have become low-priority while operating companies invest in producing assets.

The lower barrel price favours the larger oil companies that have the experience and infrastructure to beat the downturn. From an engineering perspective, this means more emphasis on projects that have already been committed to, for example projects that have passed the FID milestone. With this in mind, there is a likelihood of bias towards brownfields work, life extension projects and production enhancement.

Salaries

Salaries are expected to stabilise or even contract in some areas. Contract rates are also expected to fall in line with market conditions.

Candidate trends

From a candidate's perspective, it is a good time to be conservative with rate or salary expectations although (at the time of writing) there is no evidence to suggest that the downward pressure on the commodity price will necessarily be reflected in such dramatic proportions on rates. Many companies are still engaging equal proportions of staff and contractors to fulfil their project commitments both with operators and the EPCM contractors.

Engineering candidates are being retrenched from some larger consultancies where their work was driven by studies and new projects and now seeking opportunities in existing developments and brownfields sites. Holders of 457 visas are also being released in greater numbers.