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Oil and gas project boom promotes recruitment

23 November 2023

 

Click here for MEED's 2023 EPC contractor ranking

The oil and gas industry has been one of the biggest employment generators in the Middle East and North Africa (Mena) region for decades, and specifically in the Gulf states. The sector has attracted skilled, semi-skilled and unskilled workers from around the globe and is a prominent employer for the local labour force.

However, with the industry tethered to oil price cycles and its association with geopolitical stability, or lack thereof, it has gone through boom and bust periods throughout its existence. As a result, employment in the sector has been cyclical in nature.

Moreover, the Gulf hydrocarbons industry’s over-reliance on foreign workers – particularly those from the Indian sub-continent – makes most of the jobs temporary.

The regional industry is in the middle of a prolific period at present, as producers and operators invest in large-scale projects to maximise oil and gas output and expand petrochemicals capacities. This projects boom has created a pressing need for additional manpower, particularly among contractors.

“What we are witnessing today is a supercharged and extremely busy projects market. The clients [project operators] are spending billions on projects, and all contractors – big and small – are winning work,” says a regional industry analyst.

However, executing engineering, procurement and construction (EPC) work on these projects in line with the tight schedules laid out by the clients is “a big ask from contractors”, the analyst continues. 

“Hence, we are experiencing a sort of frenzy among contractors to urgently hire people to beef up their project execution capabilities.”

Project spending

There can be little doubt that this is the best year on record for contract awards in the Mena oil and gas industry. More than $82bn-worth of EPC contracts have been awarded in the region so far in 2023 for upstream, midstream and downstream oil and gas projects and in the petrochemicals and chemicals sector.

The level of projects spending this year easily surpasses that of 2021, despite that  year having seen the award of the largest-ever EPC contract in the Mena hydrocarbons sector: a $13bn deal for the main package of QatarEnergy’s North Field East liquefied natural gas (LNG) programme, which was won by a consortium of Japan’s Chiyoda Corporation and French contractor Technip Energies.

Abu Dhabi National Oil Company (Adnoc) leads capital expenditure (capex) on Mena oil and gas EPC projects this year, largely due to its $17bn spending on the Hail and Ghasha offshore sour gas development project.

Saudi Aramco is the second-largest spender in the region, on the back of the estimated $10bn-worth of EPC contracts it has awarded for the second expansion phase of its Jafurah unconventional gas development. This is in addition to its $11bn capex on the Amiral greenfield petrochemicals scheme in a joint venture with France’s TotalEnergies.

Aramco has also maintained a robust level of spending on offshore oil and gas field upgrade works this year, having awarded approximately $5.3bn-worth of engineering, procurement, construction and installation contracts to its Long-Term Agreement pool of contractors.

In its efforts to consolidate its position as the largest producer and supplier of LNG in the long term, QatarEnergy awarded a $10bn EPC contract in June for two further LNG trains that form the main package of the North Field South project. This has helped the Qatari state enterprise to become the third-largest regional spender in 2023.

Hiring across the board

While big-ticket projects in Saudi Arabia, the UAE and Qatar have created thousands of jobs in those markets, there is also steady manpower demand in other regional countries, according to executives at energy sector recruitment agencies.

“Saudi Arabia, Abu Dhabi, Dubai, Fujairah and Qatar are the hot hiring locations currently,” says one recruitment agency official. “It is also interesting to note that numerous job opportunities have opened up in markets like Kuwait, Iraq and Algeria.”

Another recruiter adds: “Contractors have come under considerable strain due to the large volume of contracts that have been awarded in the past 12-18 months.

“From news about rampant job cuts [by both operators and contractors] just about two years ago, we have now entered a period when companies have gone on a hiring spree,” the recruiter says.

While contractors are hiring for various project functions, there is an acute need for them to fill engineering positions, given the technical complexities of the projects on which they are deployed, industry players observe.

“You need engineers throughout the entire life cycle of an oil and gas project – from the concept study and the front-end engineering and design stage, to the bidding, proposal and estimation stage, on to the detailed engineering upon the award of the EPC contract, and even beyond,” says a business development manager working for a prominent contractor.

“Engineers are key to the success of any project. Hence, there is a rush on hirings for engineering functions,” the official says. 

“To meet short-term demand, contractors are engaging engineering centres outside the region, but they have to employ engineers on payroll to be able to effectively execute awarded projects, as well as to take on new work.”

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Indrajit Sen

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    > BANKING: Saudi lenders readjust to lower lending and deposit climate
    > UPSTREAM: Aramco upstream spending gathers pace
    > DOWNSTREAM: Sabic steps up Saudi petchems investment
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    > CONSTRUCTION: Saudi construction defies the headwinds
    > TRANSPORT: Saudi infrastructure pushes forward amid conflict
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    To see previous issues of MEED Business Review, please click here
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