Posted by Hays UAE, April 2015
Each quarter we gather market information across the Oil & Gas world to create a comprehensive regional update.
The Hays Oil & Gas Global Job Index for the first quarter traditionally sees a bounce back as hiring restarts after the holiday season slowdown in the previous quarter. However, due to the downturn in the oil and gas market, Q1 2015 bucks the trend.
The Index, which charts the number of jobs posted on key oil and gas job portals across the world, dropped from 1.16 to 0.95 in Q1 2015, a fall of 28 per cent from December 2014 and a 42 per cent fall year-on-year.
The effect of the downturn is now being fully realised, as operating and service companies across all oil and gas regions implement strategies and cost measures to ensure they remain profitable.
“A return to higher oil prices has yet to transpire and the industry is starting to adjust to the new lower price regime. Cost saving measures will impact hiring plans, however, decisions made today will shape the future labour force so it is important for employers to hire strategically to avoid creating a future skills gap.” said John Faraguna, Managing Director of Hays Oil & Gas. “There are still pockets of reasonably strong activity: Asia and the Middle East both show an increase in hiring activity compared to the previous quarter, albeit below Q1 2014.”
The Index was established in 2010 when it was set at 1; all subsequent months have been compared to this benchmark.
Trends by region
As well as a global perspective, the Hays Oil & Gas Job Index also provides a measure of month-to-month jobs posted by region. The figures from January to March 2015 (Q1) inclusive reveal:
Businesses such as Saudi Aramco are hiring western expats with specific unconventional experience and for infrastructure projects, which has helped stabilise the Index. The job market is expected to remain relatively strong throughout Q2 and Q3, but it is still too early to tell if the Index will return to 2014 levels.
The full effect of the oil price decline is starting to take hold and projects with unfavourable economics are being cut or delayed. On the positive side, LNG projects on the Gulf Coast are still hiring the talent required to drive towards operational status.
OPEC’s decision not to cut production has hit parts of the region hard, especially Venezuela. This coupled with the continuing fall-out of investigations into Petrobras have hindered the region’s job market growth. The continuing energy reforms in Mexico and the announcement of Round One tendering scheduled later this year should have a positive effect on the Index in Q3.
The cost of producing North Sea oil and the slow up-take of fracking and shale exploration in the region take their toll on the job market. With the approaching UK general election in May 2015, the new government is expected to come under pressure to revise tax reforms in order to kick start UK oil production.
Western sanctions, coupled with the fall in oil prices have resulted in the CIS Job Index dropping to the lowest levels in six years. Russia has turned its attention to Asia, particularly China, both for financial investment and the talent needed to complete projects, in turn securing the revenue it so desperately relies on from oil and gas exports.
The rising cost of production on the one hand and the decline in oil prices on the other are causing employers to put a hold on hiring activity, causing the Index to drop below Q1 2011 levels. Africa is expected to represent 15 per cent of global offshore capital expenditure during 2015, up 10 per cent from 2014 levels. As health fears subside we would expect to see the Job Index bounce back throughout the year, although it’s unlikely to reach the peaks of previous years in 2015.
The first quarter has been stronger than other regions. The expertise and proven track record in the design and construction of offshore production facilities is potentially the reason the region has seen growth. Companies with projects in construction have already committed the finances required. Therefore, we expect there will be a time lag before any potential changes to hiring plans are realised.
LNG projects are moving out of design and construction phases and into operational status, resulting in reduction in demand for new talent and reflected in the Index, which has reported four consecutive quarters of decline since its slight recover in May 2014.
The Hays Oil & Gas Global Job Index provides a measure of month-to-month jobs posted on the principal online job portals within the global oil and gas industry. The data is compiled by a team of analysts and researchers, and is broken down to reflect regional differences in hiring activity. To view further detail on the index and the regional results please go to the Hays Oil & Gaswebsite