SECTION ONE SALARY OVERVIEW - Hays

SECTION ONE
SALARY OVERVIEW
Confidence is returning to the market -
two thirds of employers surveyed intend to
award salary increases in the next 12 months.
Oil & Gas Salary Guide 2010 | 06

Salary overview
Average annual salary for permanent staff by country
Results from our survey indicate those working in oil and gas are well
paid. With an average permanent staff salary of more than $75,000
globally (based on the combined total of local and imported labour)
those in this industry are earning a premium compared to most other
industries. There is however still a vast divide between those countries at
the top of the table and those at the bottom and for this reason it’s not
hard to understand why easily transferrable skills continue to migrate
around the world in search of higher returns.
Of all the countries on the list only three pay less for skills they import
compared with what they pay their local resident employees - Norway,
Canada and Australia. All other countries import skills from overseas at a
premium, and in some cases at a significant premium. There does not
however appear to be any correlation between home salaries and those
imported, with Indonesia being at the bottom of the scale in terms of the
average salary for local workforce, however it is the second highest payer
for those it imports. The same can be found in Azerbaijan.
At the other end of the spectrum, Oman pays its local workforce an
average ‘mid table’ rate of just over $58,000. However it is the lowest
payer of imported labour on the list. (With a highly concentrated
number of employers there is some evidence that this is a reflection of
an efficient overseas recruitment policy).
If we combine both figures for each country - the five highest paying
countries are Australia, USA, Azerbaijan, Canada and Netherlands. Those
paying the least are Kuwait, Oman, Libya, India and Kazakhstan.
Background
Only where the sample size is large enough have we listed countries in
this table.
Permanent staff salaries are the figures returned by respondents as their
package in US dollar equivalent figures excluding one-off bonuses,
pension, share options and other non-cash benefits, and for those
working on a monthly or yearly payroll. Those on a weekly or daily
payroll are extracted and included in the figures for contracting overleaf.
The first column represents the average salary for respondents based in
their country of origin, the second column for those who are working in
that country although originate from another. Where not enough
responses were received, entries are returned as N/A.
Salaries
Country
Local Labour
Imported Labour
Average annual salary
Average annual salary
Europe
UK
Norway
Netherlands
92,200 94,200
114,700 101,000
104,200 112,000
Russia & CIS
Russia
Kazakhstan
Azerbaijan
65,600 105,700
30,700 88,100
53,300 144,500
Middle East
UAE
Saudi Arabia
Qatar
Oman
Kuwait
Iraq
Iran
50,200 88,500
67,600 86,400
35,900 91,400
58,400 67,800
N/A 83,500
32,600 N/A
37,300 89,300
Africa
Libya
Angola
Algeria
46,000 78,700
53,600 118,900
33,800 107,800
North America
USA
Canada
117,900 128,100
112,800 112,500
South America
Venezuela
Brazil
Argentina
72,300 113,700
72,500 125,200
65,000 N/A
Asia
Vietnam
Singapore
Malaysia
Korea
Japan
Indonesia
India
China
N/A
N/A
56,700 102,900
43,100 131,000
N/A 144,100
N/A
N/A
32,000 136,300
50,000 77,800
51,600 102,900
Australasia
Australia
New Zealand
Notes: All figures are base salaries, quoted in US dollars.
138,100 133,700
99,700 112,700
Oil & Gas Salary Guide 2010 | 07

Salary overview
Average annual salary for contract staff by country
With an average annual contractor salary of more than $95,000 for
those working locally and more than $168,000 for imported labour, there
is a considerable premium placed by employers on this method of
working. However it should be noted that this figure and all other
salaries listed assume that the individual works a full 240 days a year (or
48 weeks) which is clearly not always possible, or in many cases desired.
Clearly the trade off between security and guarantee of work versus an
increase in rate for contracting is very much at work in the oil and gas
industry. This is further accentuated where candidates work overseas on
contract with the average return increasing to an impressive $168,500
per annum. In all but two cases, countries are employing contractors
from overseas at a premium (it can be assumed the skills required do
not exist or are not available in the local workforce).
The other observation from the figures shows that the discrepancy
between contracting rates and equivalent permanent salaries is most
pronounced in those countries with extensive permanent employment
legislation i.e. The Netherlands. Here we can assume that this valuation
of contractors is driven by employers avoiding expensive permanent
employment costs.
Background
Contractor salaries are those working on daily or weekly payroll. The
annual salary equivalent assumes they work for 240 days a year, or 48
weeks respectively. Where not enough responses were received, entries
are returned as N/A.
Whilst Australia’s imported rate for labour is marginally below that for
local staff, the UK shows a clear differentiation between the two. This
may reflect a trend in the UK to import cheaper labour to combat
margin decline in a difficult market. As the market improves however, it
will be interesting to see whether the UK remains in a group of its own,
or if they are joined by other nations seeking similar savings.
Salaries
Country
Local Labour
Imported Labour
Average
annual salary
Average
daily rate
Average
annual salary
Average
daily rate
Europe
UK
Norway
Netherlands
163,800 630 134,900 520
222,300 850 226,900 870
186,500 720 210,300 810
Russia & CIS
Russia
Kazakhstan
Azerbaijan
146,000 560 203,600 780
76,300 290 191,500 740
129,200 500 202,500 780
Middle East
UAE
Saudi Arabia
Qatar
Oman
Kuwait
Iraq
Iran
78,600 300 123,900 480
55,100 210 103,700 400
N/A N/A 166,300 640
60,500 230 183,200 700
N/A N/A 125,700 480
53,000 200 178,500 690
60,800 230 159,000 610
Africa
Libya
Angola
Algeria
83,800 320 188,000 720
73,200 280 169,100 650
84,000 320 166,300 640
North America
USA
Canada
214,300 820 220,800 850
205,400 790 206,700 790
South America
Venezuela
Brazil
Argentina
106,300 410 154,000 590
159,000 610 176,000 680
N/A N/A N/A N/A
Asia
Vietnam
Singapore
Malaysia
Korea
Japan
Indonesia
India
China
82,800 320 163,500 630
71,700 280 175,800 680
134,500 520 160,200 620
N/A N/A 201,500 770
N/A N/A 84,400 320
51,900 200 203,200 780
58,400 220 166,200 640
78,600 300 189,800 730
Australasia
Australia
New Zealand
Notes: All figures are base salaries, quoted in US dollars.
207,400 800 204,000 780
155,300 600 182,700 700
Oil & Gas Salary Guide 2010 | 08

Salary overview
Average annual salary by experience
By discipline area
Those working within subsea/pipelines, production management and
geoscience came out on top in this survey, with subsea leading the way
on an average of $109,000 per annum. Downstream operations
management, reservoir/petroleum engineering, piping, mechanical and
technical safety were the lowest paid, with an average annual salary for
downstream operations management of $65,800 per annum.
Apart from the abovementioned, all other discipline areas came in with
an average salary between $70,000 and $90,000.
These figures also allowed us to track how experience is valued, and in
some disciplines it is greatly; notably, subsea, production management,
marine/naval, estimating/cost engineering and logistics. These areas all
showed accelerated salaries as the experience grew.
Project controls, reservoir engineering and HSE showed less than
average growth in salaries as experience levels increased.
By company type
When comparing by company type, figures were consistently between
an average salary ranging from $78,000 to $87,000. Equipment
manufacturers and suppliers fell below this level, with an average annual
salary of $63,700.
Those working with a contractor were rewarded most for their increasing
experience while those in their first four years with an operator were
remunerated above their peers in other company types when first
embarking on their career.
Background
These figures are based on permanent staff salaries returned by
respondents as their package in US dollar equivalent figures excluding
one-off bonuses, pension, share options and other non-cash benefits,
and for those working on a monthly or yearly payroll. Those on a weekly
or daily payroll have been extracted from this comparison.
Salaries
Years of experience
0 to 4 5 to 9
10 to 19 20 +
Discipline area
Business development
Construction/installation
Downstream operations management
Drilling
Electrical
Estimating/cost engineering
Geoscience
HSE
Logistics
Marine/Naval
Mechanical
Piping
Process
Production management
Project controls
QA/QC
Reservoir/petroleum engineering
Structural
Subsea/pipelines
Supply chain/procurement
Technical safety
47,800 61,900 98,500 126,600
47,200 76,900 100,500 119,900
40,000 53,600 79,100 90,500
43,500 55,100 91,500 135,500
46,800 58,800 85,800 122,900
37,500 53,700 110,600 140,400
52,300 73,700 110,700 138,900
49,400 62,300 91,900 121,500
45,000 59,500 85,700 133,700
54,100 68,600 99,900 140,400
42,700 60,600 94,400 107,700
48,900 56,500 80,200 111,900
43,900 60,000 93,200 122,600
50,500 77,600 133,800 154,200
45,000 58,000 99,300 120,100
41,700 60,600 90,600 127,200
39,700 59,200 79,700 109,000
39,900 53,700 94,200 136,200
57,300 75,800 141,300 162,700
43,500 56,800 90,900 121,800
46,800 66,800 83,800 113,600
Company type
Consultancy
Contractor
EPCM
Equipment manufacturer/supplier
Global Super Major
Oil Field Services
Operator
47,000 73,300 96,400 114,200
39,600 53,100 100,600 145,800
37,100 64,900 83,300 131,400
34,300 48,300 75,600 96,800
51,800 65,900 102,500 119,000
50,500 66,400 82,300 115,500
60,700 78,400 88,100 121,600
Notes: All figures are base salaries, quoted in US dollars. EPCM - Engineering, procurement and construction management;
HSE - Health, safety and environment; QA/QC - Quality assurance/quality control.
Oil & Gas Salary Guide 2010 | 09

Salary overview
Salary trends
The last 12 months
The recession of 2009 was clearly reflected in the fact that 12 per cent
of respondents indicated their salaries were reduced over the last 12
months. Those most affected worked with consultancies and contractors,
were in the 0 to 4 years experience bracket and had been in their
current role for less than one year.
Whilst the majority of employers preferred to keep salaries static (44%),
there were some signs of market improvement with an equal number of
employees receiving an increase (16% + 28%).
Of those that received an increase of more than 5 per cent over half were
permanently employed and have been in their current role for 3 to 5 years.
The next 12 months
A more positive trend is appearing in the forecasted salaries returned by
employers for 2010 with two thirds expecting to increase salaries, and
very few expecting any decrease. Those working within oil field services
could be the big winners with many employers in this area indicating
they expect salaries to increase by more than 10 per cent.
Retention of key staff through careful salary management is likely to
become a prominent issue for employers this year.
Background
Only employers were asked to provide their intentions with regard to
salaries in the next 12 months, whereas the figures for the previous 12
months were taken from the employees experience.
Salary trends
In the last 12 months has
your salary:
12%
28%
16%
44%
Reduced
Remained static
Risen less than 5%
Risen more than 5%
In the next 12 months, do you
expect salaries to:
19%
4%
28%
23%
26%
Decrease
Remain static
Increase up to 5%
Increase more than
5% but less than 10%
Increase more
than 10%
Oil & Gas Salary Guide 2010 | 10