Worldwide capital spending for oil and gas development, transportation, refining, and marketing is strong and should remain robust for some time. OGJ's annual capital spending survey, starting on p. 28, outlines many major projects in North America and beyond.
In North America, OGJ expects growth in upstream spending in 2012 of about 4% from last year's outlays.
Meanwhile, the annual survey of international exploration and production expenditures by Dahlman Rose & Co. (DRC) expects upstream spending growth elsewhere to grow by 9% this year. This compares with the analysts' estimate that such spending climbed by 6% during 2011.
DRC said this year's largest gains in spending would be by companies in Africa, the Asia-Pacific region, and large international oil companies. The areas of slowest spending growth were reported to be Russia, Latin America, and Europe.
A moderate recovery in E&P spending is expected in the Middle East this year, led by Kuwait Oil Co. The resumption of drilling in Egypt and Libya following last year's disruptions, a recovery in Algeria, and moderate increases by the national oil companies of Nigeria and Angola will provide a boost to spending in Africa this year, DRC said.
One of the strongest areas for upstream spending this year, DRC reported, is the Asia-Pacific and Australia, where spending will increase by 15% from 2011. Sinopec, Inpex, BHP Billiton, and Santos are poised to post strong year-on-year spending growth.
US investments, employment
Shale plays, including the Bakken, Marcellus, Eagle Ford, and others, are the targets of large chunks of this year's capital budgets.
Although the growth rate for spending is down from a year ago in the US and Canada in part due to persistently low natural gas prices, hiring qualified people with the right skills and in the states where the need is greatest is driving salaries higher.
With the US unemployment rate above 8%, these jobs with healthy compensation are certainly welcome. In the Bakken's home state of North Dakota, the unemployment rate was 3.2% in December 2011.
In its State of American Energy 2012 report, the American Petroleum Institute cited reports claiming that with open access, Marcellus shale development could create 76,000 jobs in Pennsylvania, 20,000 jobs in New York, and 17,000 jobs in West Virginia by 2015, and development of Ohio's Utica shale could support more than 204,000 jobs in just 4 years.
Hiring surge in Asia
Results of the Global Oil & Gas Workforce Survey for the first half of 2012 released in February by oil and gas recruiters Air Energi and OilCareers Ltd. found that refinery, chemical, and power generation projects in Asia are growing at unprecedented rates such that of all regions, the Asia-Pacific region experienced the biggest jump in salaries into 2011. And across the entire Asia-Pacific region, naval architects, subsea engineers, construction advisors, project controls specialists, safety engineers, and process engineers are in increasing demand.
In Malaysia, the survey found, given the breadth and scale of projects under way, there is virtually no discipline not in demand in upstream and in downstream developments, but with several projects expected to move to construction from the design phase in 2012, construction project managers and quality and safety personnel will be needed acutely. Offshore developments will boost demand for drilling exploration expertise. Fixed platform and LNG engineering and construction personnel are also highly sought after, the survey found.
In Australia, the labor crunch tightened further with the go-ahead of the Ichthys LNG project in January. The report said this development, once in full swing, will require an estimated 4,000 construction workers.
Additional LNG projects in Australia include Gorgon, Wheatstone, and Gladstone. The volume and scale of current projects in Australia should place an extraordinary premium on engineering personnel as well as construction, quality, project management, and safety disciplines, the report said.
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