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Oil and gas contractor rates to rise by 15% during 2013 driven by skills shortages

Oil and gas contractors working in the UK and offshore in the North Sea look set to benefit from rate rises as high as 15% during the course of 2013. This is according to a survey of 2,200 energy majors, service companies and supply chain firms by recruitment website

The survey shows that 70% of companies are concerned that rates are rising too fast. The increases are the result of a deepening skills crisis in the UK’s oil and gas sector, which is suffering from decades of underinvestment in skills and the lure of high pay in other oil and gas provinces around the world.

“Our survey shows that with increased investment in North Sea Oil, demand for qualified staff is set to reach an all-time high, which will exacerbate an already serious skills shortage,” warns CEO Kevin Forbes.

“[It’s] a problem that is being further exacerbated as UK candidates head abroad to earn even higher wages with a huge demand for qualified expats globally,” he adds.

The survey found that oil and gas firms identified three key reasons underpinning the skills shortages:

  • 35% blamed long-term underinvestment into skills development within the industry, based on an assumption that the province was in decline. This has led to a shortage of professionals and skilled tradespeople within every occupation class in the sector
  • 37% suggested that many North Sea operators and supply chain companies underestimated the success that new technologies would have on extracting difficult to access and low grade oils, making them economically viable
  • 46% believe that highly skilled UK workers are being lured by high pay and generous packages to contract or relocate abroad, particularly to regions such as Australia and South East Asia.

Pay and conditions are improving and “increasing at the same time as UK oil and gas companies try to compete for a dwindling number of skilled staff,” says Forbes. “The companies are right to pinpoint the dual impact of historic lack of training and pressure from well-paid jobs abroad.

“There is a lot of press around North Sea Oil being in decline,” he continues, “but the truth is there are still 30 to 40 years left in the North Sea and that estimate increases all the time as new fields are discovered and come online.”

Forbes concludes: “With the record investment in North Sea Oil in the last few months, this pressure on wages and skilled staff does not look likely to end any time soon.”

Published: 19 September 2013

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