MidEast oil and gas wages soar - study

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Salaries in the oil and gas sector soared across the Middle East last year, with Saudia Arabia, Bahrain, Oman and the United Arab Emirates recording some of the largest increases globally, according to an annual survey.

Kuwait topped the pay scale among Gulf Cooperation Countries, paying locally employed workers an average US$114,400 per year, although overseas workers received only US$79,700, the Oil and Gas Global Salary Guide 2013, published by UK-based Hays recruitment company, found.

Bahrain paid the most among overseas workers employed in the GCC, with an average US$92,200, up a whopping US$14,300, or 18.35 percent. No local salaries were recorded.

Saudi Arabia also saw overseas workers’ salaries significantly rise, reaching an average US$81,000, up from US$67,100. At the same time, locals’ salaries declined 15 percent to US$86,500.

Oman paid overseas workers about US$12,000 more per year, taking salaries to US$92,100, while locals were paid an average US$72,600, up US$4600.

UAE, which has only overseas workers in the sector, saw salaries rise US$10,000 to US$79,400.

Qatar, which also has no local workers in the sector, paid 13 percent more, at US$77,900.

Iraq pays the most among all Middle East and North African countries – US$124,500 per year for overseas workers. Locals receive only an average US$47,200 per year.

Political turmoil affected Iran and Egypt, where salaries for non-nationals plummeted US$25,000 and US$14,000, respectively.

Globally, salaries in the sector rose an average 8.5 percent to US$87,300, on the back of a 6 percent increase in 2011, according to more than 25,000 employees in 53 countries who responded to the survey.

“There would be few industries with such a track record of growth over the last few years in what has been, in the most part, an uncertain economic environment,” the report says.

“Overall, we have seen the recruitment industry working well to iron out the extreme variations in pay, with those at the top of the table seeing salaries plateau or in some cases ease slightly.

“As the markets continue to become more efficient, with national borders less restrictive to skilled migration, and the movement of people more prevalent, this is inevitably the outcome.”

About half of all employees in the sector received a salary increase of more than 5 percent, while another 16 percent saw their pay go up between 1-5 percent.

Four in five respondents expected their salary to increase this year, which is slightly less than last year. Of them, 27.5 percent expect a pay increase of at least 10 percent, while 29.8 percent expect 5-10 percent.

A quarter of employers also expected salaries to rise by more than 10 percent this year.

Hayes expects salaries to increase 4-6 percent this year.

“We also expect to see more ‘flattening’ of the market as skills move around the world to alleviate pockets of acute demand, and employers move to those countries at the bottom of our tables to take advantage of lower cost levels,” the report says.

Benefits on top of base salaries also are becoming more common, with 65 percent receiving some benefit or allowance last year, the highest rate since the survey started.

Bonuses were the most common form, with 42 percent of employees receiving a bonus, which on average contributed to 13 percent of their total package.

Lower base salaries in the Middle East were balanced by a higher level of benefits compared to other regions, as well as zero tax.

Forty percent of survey respondents in the Middle East received a bonus last year, while 29 percent received a housing allowance, 26 percent home leave, 24 percent a health plan, 22 percent car/transport/petrol, 18 percent overtime.

High salaries are a reflection of the continued skills shortage in the sector, with the issue by far the most concerning among employers (37.3 percent), the survey found.

A quarter of the 8300 employers surveyed also were concerned about economic instability.

Middle East employers faced the similar levels of concern about skills shortages and economic instability, followed by environmental and safety concerns.

The survey also found that the Middle East has the lowest rate of female participation in the oil and gas industry, with only 3 percent, compared to 9-10 percent in regions such as Australasia and North and South America.

The Middle East also has the lowest percentage of local workers, with 86.4 percent of employees in the sector coming from overseas.

However, majority (76.4 percent) of Middle Eastern citizens working in the oil and gas sector have jobs within the region – the highest level of any area.

Future confidence in the sector has remained relatively stable, with three-quarters of employers positive.

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