Sun, Oct 21, 2012 - Page 14 News List

Not so rough to be a roughneck on an oil rig

By Luke Pachymuthu and Manash Goswami  /  Reuters, SINGAPORE

Johnathan Roberts, operations manager of S.D. Standard Drilling PLC, poses at an oil drilling rig being built at the Keppel FELS shipyard in Singapore on Oct. 12.

Photo: Reuters

What jobs offer the highest pay? Investment banking is up there. So is specialist surgery.

Yet consider this: Slightly over 20 years ago, Johnathan Roberts started working on an oil rig at US$5 an hour. Today, the newly appointed operations manager of Norway’s S.D. Standard Drilling PLC makes about half a million US dollars a year.

Even accounting for inflation, it is a huge jump for the 45-year-old American. Salaries on oil rigs have soared because of a global boom in offshore drilling.

Managers and workers are scarce in this specialized industry, where the work is intense and the job involves living on a platform in remote seas for weeks. For new players in Asia, where the energy demands of booming economies are multiplying, the costs and availability of skilled workers will be a big restraining factor.

“The amount of money they are making an hour is just mind-boggling now, just five years ago they were making just half that,” said Roberts, who moved to Singapore this year from Texas.

He said his pay more than doubled in 1999 when the industry faced a labor shortage like the one that appears to be emerging.

The increasing demand for oil and gas is pushing energy companies to explore frontier areas like the Arctic and new offshore zones given that output from accessible fields is declining. Global oil demand has risen 14 percent in total to 88 million barrels per day (bpd) last year from 2001, according to the BP annual statistical review. Rapidly growing economies have accounted for much of the increase — consumption in China doubled in the same period.

“What we are seeing now is an acute shortage of people actually with applied skills, from engineering or chemical backgrounds,” said Wyn James, a Singapore-based Briton who left a career in banking this year to open a firm that recruits and places workers in mining and oil extraction.

Deepwater drilling, one of the most difficult, but most lucrative parts of the business, has been centered in the Gulf of Mexico. However, in the past decade, Brazil has become a key player, exploring untapped reserves in the Santos basin 300km southeast of Sao Paulo, at depths of over 1,500m.

On the other side of the world, CNOOC Ltd (中國海洋石油) aims to build capacity to produce 1 million barrels per day of oil equivalent in deep waters offshore China by 2020.

India, Asia’s third-biggest oil consumer, is also expanding into the deep waters of the Bay of Bengal. There were 540 offshore oil rigs in the world last year and, by the end of this year, the number should rise by 51 to 591, says Faststream Recruitment. It is the biggest jump for any year in the past decade, Faststream managing director Mark Robertshaw said.

The increase would mean more than 11,000 new jobs over the next 12 to 18 months from a total of 117,000, based on an average need of about 184 jobs per rig, he said.

The labor crunch has seen pay for a roustabout, the least skilled worker on a rig, nearly double in the past five years to between US$18 and US$20 an hour. A roughneck, a rank higher, earns between US$27 and US$28, Roberts said.

For rig men like Roberts, the money is not to be sneezed at.

“After clearing taxes, my first check after one week was US$167,” he said. “My first apartment was very small, it was a little bitty one bedroom studio.”

Today, he owns a home in Texas that has manicured lawns, landscaped gardens and four golf courses.

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