Aberdeen – Places of Oil and Granite

Between the Rivers Dee and Don, the golden strand of beach is an elegant curve that stretches for some two miles. Less than a mile behind those dimpled sands ground fine by the North Sea’s chill waves, lies the glittering Granite City of Aberdeen. But when the wind howls and storm clouds chase the sun from the skies, the Grey City emerges. Then the dramatic architecture may seem austere, but austerity is not a word that features in the lexicon of the place often called the Oil Capital of Europe.

PricewaterhouseCoopers’ (PwC) ‘Good Growth for Cities’ index, published in November 2013, rated Aberdeen second in its list of the UK’s top ten, just after Reading and Bracknell. Based on a raft of measures that included employment, income, health services and work-life balance, Aberdeen shows excellent economic growth and is clearly one of the best places to live in Britain. In 2012, PwC also awarded the city the accolade of being one of the UK’s three happiest and Aberdeen took the top spot for Scotland. And although one should not ignore its lauded parks and gardens, the grandeur of its buildings or the cosmopolitan bustle, much of Aberdeen’s attraction (and modern success) is anchored in the North Sea.

The long list of energy companies with offices in Aberdeen reads like a who’s who of oil and gas titans. Apache, BP, Cairn, Chevron, ConocoPhillips, Dana, EnQuest, ExxonMobil, Maersk, Shell, Total and Tullow are some of the key names, they are but the tip of a vast iceberg. For every licence holder and operator, there are barrels of drilling contractors, specialist service providers, maintenance and support companies, training organisations. And that list isn’t exhaustive.

Over the last few years, many commentators have observed that resources in the North Sea are diminishing and that investment is dwindling. Nevertheless, Britain’s Department of Energy issued a record number of exploration licences in last year’s round, many of which were given to independent companies. Hungary’s MoL bought 14 offshore North Sea exploration and production (E&P) licenses from BASF’s Wintershall in December. At the end of the month, Wintershall also signed an agreement to swap assets with Gazprom, giving the Russian company a 50% stake in Wintershall Nordzee’s E&P operations. None of which shows a lack of interest.

Statoil started the New Year in fine style by announcing the discovery of gas and oil in the North Sea at its Askja West and East prospects with anywhere from 19 to 44m of recoverable barrels of oil equivalent (boe). Abu Dhabi based TAQA have been approved to develop the Morrone oilfield 200 miles north of Aberdeen. Production is expected to start by the third quarter of 2013 at an anticipated rate of 3,000 boe/d.

However, the biggest and newest development in the North Sea is EnQuest’s Kraken project which received the green light from the Department of Energy in November. EnQuest is the UK’s largest independent oil producer in the North Sea, targeting maturing assets and undeveloped oilfields. Located in the East Shetland Basin, Kraken is thought to hold 137m bbl and first oil is expected in 2016/17. At its peak, Kraken should deliver over 50,000bbl/d and have a 25-year lifespan.

However, the biggest and newest development in the North Sea is EnQuest’s Kraken project which received the green light from the Department of Energy in November. EnQuest is the UK’s largest independent oil producer in the North Sea, targeting maturing assets and undeveloped oilfields. Located in the East Shetland Basin, Kraken is thought to hold 137m bbl and first oil is expected in 2016/17. At its peak, Kraken should deliver over 50,000bbl/d and have a 25-year lifespan.

“Companies like EnQuest are the future of the North Sea,” Abigail Kent told Nexus, speaking on behalf of the company. “It is only by combining the company’s skills and expertise with fiscal incentives, such as heavy oil allowances, that substantial projects like Kraken are possible. The Kraken development has secured a £4bn long-term investment in the UK oil and gas industry, with major contracts already granted to a number of UK companies, including subsea production systems to Aker Solutions and drilling rig construction to Stena Offshore. More than 60% of capex has already been defined by actual tenders/contracts awarded.

“Using Oil and Gas UK’s reporting metrics, Kraken is set to support in excess of an estimated 20,000 jobs across the supply chain during the construction phase and 1,000 operational positions over the course of the 25 years, as well as generating £9bn in revenue over the period. These jobs will not just be filled at EnQuest but by the companies who supply technology, equipment and services for the project.”

EnQuest was launched as an independent company in 2010 with 37 people and now directly employs over 525 staff. The company’s operational headquarters are in Aberdeen which, according to Ms Kent, allows EnQuest to recruit its staff from a ‘local pool of talent’ in addition to its traditional method of recruitment through university engineering programmes. Given Kraken’s overall staffing requirements, it would seem that quite a few jobs will come online, adding to the recruitment demands from other companies.

A survey conducted by the Aberdeen and Grampian Chamber of Commerce revealed that 98% of oil and gas (O&G) service companies in the area anticipate recruiting staff over the next three years, increasing numbers and replacing people who leave. On the other hand, it reinforces the belief that the industry faces a massive shortage of skilled personnel. Another survey, conducted by internet jobs board oilandgaspeople.com, reported that 68% of companies have struggled to recruit skilled staff of quality.

“Recruitment is booming at the moment,” said CEO Kevin Forbes, “and everyone is looking for staff. With the increases in exploration and production, new fields being found and developed, and a lot of decommissioning coming up, companies need new recruits. But when it comes to assessing staff requirements and skills shortages, companies find it difficult to plan long term and they tend to be reactive. It’s dependent on so many things like oil prices, licences and taxes.

“In terms of [cross] training there’s little that’s specific to the oil and gas industry and it’s difficult to know how to incentivise companies. They don’t have the resources to train people and, since they value the work done by their personnel, they don’t want to lose them for periods of time on training programmes.

“It’s also difficult for people to transition into oil and gas, partially because there’s not enough understanding of transferrable skills. At the moment it’s up to the individual to fight his or her own corner and it’s dog eat dog. We get lots of calls from people saying – ‘how can I get into the industry?’ – because there’s just not enough information out there. There needs to be one central point and OPITO [Offshore Petroleum Industry Training Organisation] is probably the best body to lead with both information and training.”

Mark Zurowski is working for the Wood Group PSN on the Shell Integrated Service Contract in Tullos, Aberdeen. He’s currently engaged on a range of platform and FPSO (Floating Production, Storage and Offloading) installations with upgrades, modifications and general maintenance items to service Shell assets in the North Sea. Except before he started, he didn’t have any specific experience and was Australian to boot.

“I contacted a range of companies, posted my CV on oil careers sites and applied for around 50 positions. I was interviewed by BP and GL Noble Denton but was unsuccessful. However, I flew up to Aberdeen and met a non-HR person on the Wood Group stand at the Global Energy Expo in June 2013. It was from that meeting that the Head of Design saw past the fact that I didn’t have O&G experience but possessed the right qualities to be of benefit to the group. Shortly afterwards, I received a call from the Head of Engineering and we chatted about working in Aberdeen. The interview process was all very informal, over the phone, and the company wanted me to start right away.”

Mark has been a resident in the UK since 2002 so the visa issue didn’t arise. Skilled workers from outside the European Economic Area need sponsorship from a prospective employer and apply under the points-based Tier 2 system. However, since many oil and gas positions appear on the UK Shortage Occupation List, immigration is rarely a problem.

“I’m not sure that the country of origin matters,” said Mark. “It’s purely the level of demonstrated experience on your CV and that’s really all that does matter. I see Aberdeen as a very good place to learn the ropes and tackle brownfield modifications. I’m getting great exposure to a range of smaller scale projects that provide a well-rounded basis for future work in the O&G sector.”

Mark spends most of his time onshore and has only been offshore once to carry out a structural survey. At the other end of the spectrum, Morgan Healy’s position with Aker rarely takes her onto dry land and she’s currently working on a drilling and production platform in the Norwegian sector of the North Sea. When it comes to the rigours of life on the rigs, there’s a big mix of both skills and nationalities.

“There are personnel employed by the oil company such as production and control room staff, well engineers, well supervisors, company representatives etc,” said Morgan. “Then there are the drilling people like roughnecks, derrickmen, drillers and toolpushers, who work for drilling companies such as Ensco, KCA Deutag and Archer Drilling which are contracted by the rig operator. And then there are hundreds of service companies including Schlumberger, Halliburton, Aker, Archer, SPEX, GE and Expro. They’re retained offshore for a very wide range of reasons – too many to list. But here are a few.

“If well intervention work is necessary, a company will be called in to supply wireline, electric line or coiled tubing services. Once the well intervention is set up, there are a number of other operations required such as setting or pulling completion items, fishing operations for items stuck in the hole and the clean-up of the well using fluids. Logging engineers like me are required to provide information about the condition of the well. If production levels have dropped, perforation may be necessary in an attempt to increase that and a service company will supply the engineer to carry out the operation.

“Service engineers are also needed for operations on rigs during the completion/drilling phase. At that stage, the service companies supply personnel to include drilling fluids specialists, mud engineers, mud loggers, logging while drilling engineers, cementers, directional drillers and many more.”

And while Morgan comes from relatively local stock, being a Glaswegian, the North Sea rigs are truly cosmopolitan.

“So far, in the week that I’ve been here [on this particular rig], I’ve met people from Norway, Sweden, Scotland, England, Wales, Denmark, Columbia, Germany and Canada. Any offshore environment is generally very multinational. One Canadian gent told me that he’s been offshore in Norway for several years and on this rig for seven of them. He works for Halliburton, ending up working in Norway when the opportunity arose with the company and has never looked back. Even though he works in the North Sea, Halliburton pay him for his travel and because he’s on a fixed rotation, he’s still able to live at home in Canada.

“I have no set rotation and work on what is known as an ad-hoc basis. In other words, I get sent out at any time that I’m required by a client which can be for up to three weeks. When I get back onshore I do get time off but it’s never a set amount. Sometimes I can be at home for six weeks between jobs but at other times, it might only be a matter of days. It depends on how busy we are at Aker. It’s very common that service personnel in the UK North Sea are not on any set working rotation while the more core rig crew have fixed rotations as their roles are always required on an installation. Typically they will include maintenance personnel, production operators, medics, radio ops and, generally, anyone employed by the oil company or rig operator.”

Being an Italian, Giuseppe Carbone fits neatly in between Australian Mark and Scottish Morgan. And, rather than working in Aberdeen or above the watery depths of the North Sea, he works at one of Europe’s largest oil and gas terminals on Mainland, in the Shetland Isles.

“I work with Jacobs Engineering as the E&IC (Electrical, Instrumentation and Control) Technical Authority within BP’s Sullom Voe Intervention project. Currently, I’m reviewing the whole E&IC Engineering project to ensure compliance with standards and regulations, improving the quality of deliverables and verifying adherence to the process requirements. The project is expected to last four or five years, assuming that I can resist the harsh environmental conditions!”

The question is, what makes an Italian, used to more clement climes, move to a place where it rains for 68% of the year, is cloudy and cold for the remainder?

“I have extensive experience in E&IC works for the O&G industry and the UK is one of the best places to be if you want to make your name. Or, in my case, earn a decent and honest wage. I don’t regret moving to the UK [back in 1993, when he arrived in Croydon! Ed, please note] and am extremely grateful for what this country has done for me. I have a roof over my head and an ambitious profession in which I can climb. I’ve also got a lot of qualifications that otherwise would have been out of reach and I’ve made many friends.

“There are lots of Englishmen here, some Welsh, Scots (of course!), Irish, Eire-ish, a few Nigerians, Romanians, Bulgarians, Russians and one Italian – and that’s me. I’m a rare example of a Roman that veni, vidi and … stayed. Of course, there are a few local Vikings but, incredibly there are very few locals working in the O&G industry; it seems the Shetlanders have no desire to develop the skills needed to run the terminal. So the majority of skilled workers are from ‘abroad’, all living together very well.”

Commensurate with other areas in the industry, the workforce on the Shetlands is set to expand and has already increased dramatically over the last few months.

“Barges are moored at Lerwick and Scalloway to accommodate additional personnel and more temporary offices have been built to accommodate the required engineering and management teams,” Giuseppe reported. “The workforce is expected grow by some 600 people in addition to the 500 already employed at the terminal. Recruitment at Jacobs and Stork (the construction company managed by Jacobs) is running at full speed. So far Stork doesn’t have many personnel on site but they will be starting to build teams up very shortly. Around 300 more personnel will be required, from welders and electricians to general labour. Total’s Laggan-Tormore project is expected to bring in many more people and we’ll easily reach 1,000 units.”

Contracts and salaries are difficult to quantify given the range of skills and professions operating within the industry. Hays’ O&G Global Salary Guide 2013 shows an average of £56,939pa for oil-workers in the UK, with rises of between 6.4% and 16.7% for last year, depending on discipline and operational bias. And the details of contracts vary in the same way.

“It varies between companies,” said Morgan, “but for my role offshore, the basic salary can be between £25,000-45,000, dependent on one’s level of experience and knowledge. Day rates are normally between £100-250, again, depending on experience.”

The employer covers the cost of accommodation and other bills when an individual is on a rig or living on site but, naturally enough, it’s a different story onshore. Giuseppe works a 10/4 day rotation and when onshore, stays in a B&B or guesthouse before travelling back to his home in Farnborough. However, Mark and Morgan both rent places in Aberdeen. A B&B will cost upwards of £45 per night, so renting a flat is the preferred option.

“Initially when I moved to Aberdeen, the company funded accommodation for the first two months to give me a bit longer to find a place for myself,” said Morgan. “Now I live in a privately rented flat, not too far from the city centre. There’s not a lot of choice in the property market and accommodation is ridiculously overpriced for what’s on offer. It’s very common for people to rent as buying property is so expensive, and nothing stays on the letting market for long because there are so many people needing something decent and affordable. The rent for a one-bedroom apartment varies between £500-800pm before bills and council tax, while rent for a two bedroom runs between £750-1,000 and a three-bedroom, £1,200 plus.”

And the other highlights of Aberdeen?

“A night out is more expensive than Glasgow where I come from. It also has less entertainment than I would like, without the number of bars, clubs, restaurants, concert venues etc that are found in other cities like Glasgow, Edinburgh, Manchester or Liverpool. In my experience, once you’ve had a couple of weekends in Aberdeen, you run out of places to go and things to see. But I’d never want to speak badly of Aberdeen because without it, I wouldn’t have the career that I do now and I’m very grateful for that.”

Clearly there are many job opportunities in O&G in Aberdeen and the North Sea, and it is also clear that there is a shortage of skilled personnel. However, nobody is willing to expound on exactly what and where the gaps are. Now OPITO has launched the largest study ever to be undertaken to analyse the extent of the problem. Representatives from more than 1,000 operators, contractors and organisations throughout the oil and gas supply chain have been asked to contribute to the study. And the opportunity has been eagerly grasped.

Ian Couper, Chief Executive of Energy North said: “We need a definitive answer to the questions – what are the skills requirements of the future? Where are the gaps? What is the solution?”

Marketing and Communications Executive for OPITO, Stephanie Crawford, told Nexus that a ‘spoiler’ would be available within the next few weeks. While she was unable to provide any actual comment on the research at this stage, she promised to keep us in the loop.

In the meantime, if you’re attracted by the idea of a job in O&G, think transferrable skills, bare your canines and apply for that post in Aberdeen. And as for the results of the research – we’ll keep you posted.

 

Rob Flemming has been a regular writer and photographer for Expat Network since the turn of the millennium. He has reported from numerous countries, including Vietnam, Tajikistan, Malaysia and India, but he has particular knowledge of the Middle East. You can learn more about Rob at www.lensandpen.com