HAYS OIL & GAS GLOBAL JOB INDEX

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1 QUARTER 3 OCTOBER 2013 HAYS OIL & GAS GLOBAL JOB INDEX Pace of hiring and job creation over the past quarter has been highly variable dependent on the region and the skill area. hays-oilgas.com

2 HAYS OIL & GAS JOB INDEX GLOBAL INDEX Welcome to our 3rd Quarter Global Jobs Index. Worldwide economic uncertainty still continues but has lessened since last quarter as a more positive sentiment has taken hold in the UK and Europe, while the US has avoided a default on its debt, at least for the time being. Crude prices have dropped below $100/bbl, the lowest they ve been since June, as supplies have risen particularly due to unconventional production in the United States. In general, we expect a continued gradual improvement in the worldwide economy over the coming months, which should keep crude prices hovering near the $100/bbl mark. Consequently, we anticipate global industry activity to largely remain flat. As you will see in the coming pages, the pace of hiring and job creation over the past quarter has been highly variable dependent on the region and the skill area. While the Middle East has heated up, most other areas have largely been stable. In general, globally we have seen a slight cooling in industry hiring. In the coming months, we expect the labor market to continue to be relatively stable, with some geographic pockets strengthening and others weakening. Demand will increase for workers experienced in unconventional reserves, and shortages will continue for engineers with subsea expertise. As always, mid to senior level professionals are in the greatest demand. We have launched our 5th annual salary survey in partnership with Oil and Gas Job Search. Please take a few minutes to share your views of the industry and to help us understand the trends affecting the industry s labor markets. Click here or go to bit.ly/og-salaryguides

3 NORTH AMERICA HAYS OIL & GAS JOB INDEX A large percentage of US operators have experienced considerable change adjusting their asset portfolio towards domestic production, however the industry has now settled. The US Oil & Gas market has largely been unaffected by the US government shut-down and continued signs of investment are being seen throughout the industry. In Canada the recruitment market is continuing to be very stable even though there is an industry wide reduction in new projects as oil companies are tending to focus on development of existing properties rather than investing in new exploration. High drilling activity in the tight oil sector is also helping offset a previously anticipated decline in conventional production. Engineers in enhanced oil production & recovery Average Salary in North America $ 170,000 Development Geoscientists Average Salary in North America $150,000 With respect to midstream activity, cooperation between the Canadian provinces is evident with the recent announcement of the Energy East Pipeline Project being constructed by TransCanada Corporation. This project will further add to the demand for skilled project implementation teams throughout Canada. Strategies for coping with impending labour shortages include attracting workers from outside traditional North American Oil & Gas hubs and recruiting internationally for some skill sets. Highly qualified experienced professionals continue to be in demand throughout North America, with some areas now beginning to experience significant shortages. These include Engineers associated with enhanced oil production and recovery, development geoscientists and technical professionals working for all manufacturing and services companies. SOUTH AMERICA In Latin America, the salary behaviour during 2013 has been solid and sustainable over the first quarter. Oil & Gas companies were timid, making few changes in regards to searching for new employees or increasing salaries. In countries like Brazil, the lack of reserves allocation has injected a bit of uncertainty in the market, while Peru and Colombia are awaiting for licenses and permissions to begin operating in their allocated blocks. By the end of the third quarter of 2013, we observed salary rates reaching towards significant increases during June and September, with high levels of job availability compared to the same periods from 2011 and This increase can be explained by the new investments in Colombia and Peru associated with the arrival of international companies that are generating a volume of new employment opportunities with generally better conditions and benefits than their local counterparts. Such opportunities due to the injection of investment from foreign companies has increased the level of available jobs, as indicated by the job index. Such investments have also attracted expatriate professionals who bring a high level of managerial and technical profiles. Construction/Installation Professionals Average Salary in South America $119,300 Overall, the outlook in South America is very positive and there are hopes that salaries will remain steady in mature technical areas with a possible increase in new areas of foreign investment.

4 HAYS OIL & GAS JOB INDEX EUROPE There are obviously two factors to comment on when viewing the job index figures volume and trend. Within the European region the overall demand has remained strong when compared to the 2011 baseline but on average circa 10% down on this time last year. The summer quarter is rarely a period of growth within the sector with each of the last three years showing a flat or decreasing trend. To some extent this can be attributed to staff holidays, shutdowns, company closures, etc. but this year there has been a little more to it. The recently strong Gathering & Processing market appears to have tightened whereas mid and downstream demand seems strong, particularly within continental Europe. The UK demand is being led by Health and Safety requirements along with specialist engineering skills. Subsea experience continues to be an area with a significant shortage. While specialist disciplines such as geosciences often grab the headlines it is clearly the engineering and operational roles that make up the bulk of demand. Traditionally this has been quite stable but recently some of the larger players in this market have started to hire again. HSEQ/HSE Managers Average Salary in UK $99,818 Subsea Engineers Average Salary in UK $107,100 The feeling within the sector is one of stability with very few major news stories making the mainstream press. There has certainly been a lot less Mergers & Acquisitions activity in the market which last year resulted in a high number of movers and therefore vacancies being advertised. Oil and Energy prices have been getting little mention in the press and consequently not many connections are being drawn between energy prices and activity in the sector. With winter approaching this is likely to change as the cold bites and the general public become all the more aware of energy pricing. AFRICA Q3 of 2013 has turned out to be very similar to that of With demand having been substantially up earlier in the year this would logically equate to vacancies being filled or roles being reassessed. Similar to the European market some of the specialist skill-sets such as those in exploration have tailed off, however demand for skill-sets such as drilling has increased. This would be a logical progression from exploration and appraisal. There is also an increasing demand for in-country skills linked more closely to the operation and maintenance of assets. Senior Drilling Professionals Average Salary in Africa $114,888 Senior Project Managers Average Salary in Africa $124,833 Eyes are still firmly on Africa as an emerging geography and a significant potential resource. Despite some highly publicized domestic trouble at the start of the quarter, the region has actually remained very stable with considerable confidence among the major organisations in the region. There has been an increase in demand for people with pipeline experience and project management skills particularly within the North of the region. There is a definite trend to reduce the dependency on expatriats, but unfortunately, the local market still has some major catching up to do if it is going to bridge the skills gap with local people alone.

5 ASIA Rich in resources and targeted as a region for growth by most Multinational Corporations, the Asia Job Index has demonstrated a consistently high level of vacancies that continues to grow in comparison to global markets. Exploration activity in the region is likely to continue, with a particular interest in shale gas / shale oil deposits, mainly in China. HAYS OIL & GAS JOB INDEX With existing and new fields in Malaysia, Indonesia & Vietnam driving the Asian Oil & Gas market, Local Independent Operators & Majors are continually on the lookout for G&P candidates to support Offshore & Onshore operations. Drilling operations, in particular, are keen on candidates with non-conventional and deepwater experience. Additionally, Senior Drilling Engineers have proven to be in high demand. Supported by the Government, the Chinese Oil & Gas sector continues to grow in both Upstream & Downstream markets and China continues to be a key player in the region. Increasing capital investment in conventional reserves and non-conventional reserves such as shale gas, which is being supported supported by the Ministry of Land and Resources, would likely result in opening up more blocks for tender. This year has seen Singapore s first LNG terminal coming on-line and in targeting LNG Bunkering operations by 2014 we can expect an increase in demand for candidates with experience in transporting, storing & trading in the year ahead. Across the Region LNG looks set to be a growth market with a series of major ONG + LNG Refinery projects in Singapore Malaysia & Indonesia currently in FEED / Construction stage. Drilling Engineers Average Salary in Asia $76,384 Project Controls Workers Average Salary in Asia $73,800 COMMONWEALTH OF INDEPENDENT STATES (CIS) Russia is now reviewing its budget for which is traditionally based on Oil & Gas prices. In spite of the fact that prices are lower ($93-95 per barrel) than the Russian Ministry of Economic Development expects ($ per barrel) a limitation on expenditure in Oil & Gas is not clear, due to the industry s need of major investments for total upgrades of current equipment used. Most Russian companies continue to use equipment and instruments that are out-dated (especially as it concerns downstream operations), which will likely result in additional investments made for equipment upgrades. As such, we anticipate a strong requirement for qualified professionals with experience working with modern equipment. The last quarter reflects a traditionally low season in the Russian market; the main onshore oilfields are situated in remote locations and all the construction and commissioning work is usually planned during the autumn-winter season, when the ground is frozen, allowing for the delivery of heavy equipment to work sites. CONSTRUCTION/INSTALLATION PROFESSIONALS Average Salary in CIS $98, 500

6 HAYS OIL & GAS JOB INDEX AUSTRALASIA In Australia, the much anticipated change of government has now passed and with it the uncertainty that had been stifling business confidence has lifted. Declaring the country open for business, the new regime has begun to put steps in place to remove red tape and facilitate acreage releases and approvals for onshore exploration. In offshore projects, operators continue to focus their attention on cost effective FLNG technology with several projects emerging in the North West. All of this has resulted in a cautious but stable employment index this quarter as confidence begins to return and existing projects march on with one keen eye on maintaining maximum productivity. This quarter has seen the award of many large scale employment services contracts for big ticket LNG projects further moving into construction phases. Offshore trades and labour resources specifically focused on vessel crewing and logistics are beginning to see increased recruitment levels gearing up for new packages of work set to start early Australia has also seen increased demand for their specialist fabrication and QAQC candidates from overseas markets as work continues to build in major fabrication yards. As these large projects continue to run through their lifecycles further strain on resources in subsea and installation engineering disciplines exist. Operators, EPCM s and contractors continue to compete for the industry s top talent. MIDDLE EAST Drilling Engineers Average Salary in Middle East $95,000 Geoscientists Average Salary in Middle East $91,090 Senior Business Development Managers Average Salary in Australasia $159,000 Drilling Assistant Average Salary in Australasia $84,000 Interestingly, demand for savvy Technical Sales Engineers and well networked Business Development Managers remains high, showing promise in the economy as service providers gear up for a healthy Drillers and services around drill rig activities are still in demand with a major emphasis on operating and maintaining new technologies. The latest Jobs Index for the Middle East indicates overall rise higher than any other region over the last three months. This is exciting news for the area as it indicates the release of a number of projects, which had been postponed in Q1 & Q2, that are expected to being staffing soon. Companies realise that overall demand has increased, but employment processing times have not quickened and as a result have opened new positions for hiring now for commencement in early With the second holiday season being completed by mid- October, we see no reason that this trend will decline. We might see organisations becoming more flexible in hiring and remunerating outside of existing pay scales, extending contract signing bonuses, as well relaxing of age constraints for certain categories. We are already seeing this happening for roles related to Project Engineering, Maintenance, Reliability and Integrity. As always, experts in Geosciences particularly with IOC experience remain at a high level of demand and will continue for the remainder of this year. Drilling contractors and related well engineering services companies presently are competing to retain staff and find ways to attract new staff for upcoming projects. It will be interesting to see how this develops over the next six months.

7 What is the job index? The Global Job Index is a quarterly publication featuring news and updates affecting the oil and gas employment market. It provides an insight into fluctuating job numbers, as well as local events which affect employment demand making it a unique and informative resource for the industry professionals. Background Finding a new job via an online medium is now the norm for any job seeker looking for work. This trend has of course led employers to rely on their web presence, either direct or indirect, to source, attract and drive candidates to apply for their jobs. The oil and gas industry is no stranger to the use of online media to attract candidates, with globalisation and remote work locations meaning the vast majority of roles in the industry are now resourced using online portals. These sites range from a company s own online web pages to large recruitment groups, specialist job boards focused on specific geographies, and those dedicated to the oil and gas industry in all its guises across the world. These global boards have grown considerably in the last few years and now contain many thousands of jobs and resumes of users eager to access their next opportunity. Methodology Our team of analysts and researchers measure the numbers of live jobs posted on all the major job boards that are specific to the oil and gas industry. These are collated into regional figures and compared against a datum of 1.00 taken from October At this time the industry had largely recovered from the global recession, and the oil price reflecting this recovery slowly edging upwards over $80 bbl. Capital had flowed back into the industry boosting exploration, project starts and profits. Recruitment had recovered steadily since the start of 2010 in line with the increase in revenues although there were no significant skill shortages at that time. With expectations of a growing recruitment market through 2011, October 2010 appeared to be an ideal point from which to set our benchmark for the Global Job Index. We serve over 50 countries through our 18 in-country teams. Australia Brazil Canada China Colombia Denmark France India Malaysia Mexico Netherlands New Zealand Poland Russia Singapore United Arab Emirates United Kingdom United States Visit us at hays-oilgas for contact information, employer resources, news and listings of available jobs Each month since this date we have measured job posting activity on the same sites making sure we are consistent in how and what we measure. From time to time the sites themselves will change the way in which they post and maintain jobs, and this is closely monitored to ensure that this does not alter the results of our research over and above the specific measure of job posting activity we are seeking. This data is broken down further to give a measure of regional activity and the trends within those regions. This further analysis is essential to oil and gas recruiters that scan the world for available talent. The Results Hays Oil & Gas publishes its results on a quarterly basis producing the Global Job Index along with dedicated figures for each region; Europe, Africa, Middle East, Russia and CIS, Asia, Australasia, North America and South America. hays-oilgas.com