Analysis: Romania oil and gas recruitment takes a hit | What are the market trends

Newsroom 11/07/2016 | 15:21

The 60 percent reduction in oil prices since mid-2014 has seen demand for industry specialists fall, as companies in Romania and abroad have started to halt riskier, capital-intensive projects. Recruiters say the market for executives in the oil and gas sector has remained depressed as firms are currently looking only for managers with good restructuring skills.

 Ovidiu Posirca

According to the latest data provided by the National Statistics Institute, the number of people working in the extraction of oil and gas fell by 17.4 percent between 2011 and 2014. Close to 20,000 people were working in this field. However, wages have gone up by 14.7 percent in the past four years to over RON 5,000 in April 2016.

Elena Popa, professional & executive search senior consultant at recruitment consultancy Adecco Romania, says that companies have reduced their recruitment activity by around 30 percent compared to the 2013-2014 period and some employees have been let go.

“Wages haven’t been cut but bonuses were reduced or scrapped,” Popa told BR.

She explained that companies are now looking for specialized engineers in various areas such as drilling and welding, but they need at least five years’ experience, which means mid-weight positions.

The price of oil has more than halved from a peak of USD 114 per barrel in June 2014, eroding demand for fresh employees in the exploitation sector as well as at firms providing services for large petroleum players.

“There are cases in which companies have fully withdrawn from Romania, such as Petrofac, precisely due to the lack of profitability in continuing their operations. In practice, in this field we are currently talking more about restructuring than employment,” Alexandru Talazman, managing partner at executive search firm Wrightson Romania, told BR.

The number of job openings advertised by companies on the online recruitment platform eJobs has remained stable over the past two years, according to Stefania Grajdeanu, the firm’s PR manager. She said that around 500 announcements in the oil and gas sector are posted each year on eJobs. More than half of the openings are for laborers and technicians, while 11 percent of the vacancies were for engineers.

Grajdeanu said that oil and gas employees receive some of the highest wages in the workforce, alongside those in the IT and tobacco sectors.

 Local specialists might venture into more dangerous areas

As the demand for specialists in Romania remains subdued, more workers might look for jobs in more dangerous parts of the world, where the industry hasn’t been hit by cost-cutting measures.

Talmazan of Wrightson Romania said that the demand for specialists has remained pretty much unchanged in regions that are riskier from a political and social perspective. He cited Libya, Egypt, Iraq and Iran as some of the markets looking for specialists.

“Recruitment in this segment will remain in waiting mode. On the global market the prices of oil and gas are still volatile and while consumption is not forecast to increase, the new developments are not justified. This is why I am expecting recruitment in this segment to consist of only natural replacements to teams and not to increase significantly in the next year. Romanian specialists will look for relocations to areas with higher risk, if there are no major alternatives in Europe,” said Talmazan.

Executive search consultant George Butunoiu adds that recruitment activity in the oil and gas sector remains low in Romania and will continue in this vein this year as there are few new businesses.

“There is a pool of specialists in this field, from all around the world, moving from one project to another in various countries. Once you get on this list, you are very likely to stay there for years, until you get tired or want to do something else. From the input I’ve had from foreign managers, Romanians don’t have a special status on this list; I don’t think there are a lot [of companies] looking especially for Romanians when they want to hire people,” Butunoiu told BR.

He added that there is a limited number of Romanians working in areas with greater risks, where the pay is higher. Butunoiu said that most local specialists abroad are involved in administration operations.

 Companies looking more for executives who can cut costs

The fact that companies have been cutting costs ever since the price of oil collapsed has also translated into the recruitment patterns of executives.

“At present, there is a pressing need for another kind of manager, who does restructuring and consolidation, and in contrast to the manager from the growth period has to focus on analyzing costs and also on organizational re-engineering projects. But he or she also needs to find new niches that generate revenue, which haven’t traditionally been explored,” said Talmazan of Wrightson Romania. He added that from his firm’s perspective, the demand for such services has remained flat.

According to Popa of Adecco Romania, the recruitment of specialists outstrips that of executives by a long margin.

 Trying your luck in a new industry

BR asked the recruitment experts for some alternative job prospects for a specialist who might have lost his or her position in the oil and gas sector, or for one trying to do something else until demand in the market picks up again.

Raluca Penes, HR coordinator at recruitment consultancy Smartreee, says that specialists in the oil and gas industry have limited options to work in other fields, because the industry is much too niche and has very specific requirements regarding skills and training.

However, Popa of Adecco Romania says that such specialists could look for new jobs in production, the naval sector, the chemical industry or could work in consultancy.

 Companies shed jobs in 2014-2015

Taking a look at the biggest employers in the energy sector, which are primarily the oil majors, a large share of them have reduced their headcount in the face of shrinking business. This is also the case in the refining segment, but even the distribution arms of utilities have taken some cost-cutting measures, albeit to a lesser extent.

For instance, Austrian oil major OMV Petrom fired 12.7 percent of its workforce last year, while state-owned gas producer Romgaz trimmed its headcount by close to 1 percent, as its turnover fell by 11 percent to RON 4 billion, according to the National Trade Registry Office (ONRC).

Companies working with oil majors and which provide a wide array of services such as drilling and exploration of fields seem to have been worst hit.

This was for instance the case with Prospectiuni, the Romanian firm providing exploration services for the oil and gas sector, which filed for insolvency in April.

The company had been struggling with falling oil prices, posting losses in the past two years.

Founded in 1950, it has carried out 2D and 3D acquisition surveys on close to half a million square meters. Since 1970, Prospectiuni had worked on projects in the Middle East and Africa.

Another company in the energy sector struggling to exit insolvency is Vulcan SA. The firm was founded in 1904 and manufactures industrial equipment. Recently, Vulcan started providing pumping units for a project in Kuwait and is looking for new contracts in the Middle East.

According to experts, oil-producing companies in Romania are struggling to find resources in fields that are both mature and fragmented. Based on the current known deposits and consumption rates, the country might run out of oil and gas in little over a decade. Companies are pinning their hopes on massive gas deposits in the Black Sea, but development in this area is still in the early stages.

Several oil majors, including US-based ExxonMobil, Austrian OMV Petrom and Russian Lukoil, are seeking deposits that could prove to be profitable.

 

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