Salaries and Day Rates in the Oil & Gas Industries

When it comes to the exprat life, there is only one question: how many beer tokens does it pay, as an ex-colleague used to characterise it? Okay, there are other considerations: accommodation, flights, per diem, married/single/residential status, etc. But numero uno is: exactly what am I worth? In this blog I am only covering engineering in the oil and gas industries because this is the only industries I have known for the past 30 years!

Salaries in the oil and gas industries are usually very high - well that comes as no surprise. Other related positions in the industry too, are compensated well, but there's still a yawning gap between corporate salaries and those of engineering personnel.

Take that of a Chemical Engineer, one of the highest professions in oil and gas. Of course, a chemical engineer's salary would go up more than double in a time period of a decade or so of having started work. So he earns a very high salary by the time he is about 45-50 years old.

What is paradoxical here is that engineers with a bachelor's degree are given the highest salaries, then come those that hold doctorate degrees and only then those who hold master's degrees in engineering. This trend may occur because a bachelor is younger when he first joins work. Also, the normal trend is that he will not be interested to go into academia, research and education, once he starts working. So he demands a much higher wage than employees in the other two categories. So, there is this discrepancy in salaries in the oil and gas industries. However, this trend does not hold water overseas. It has been my experience that, for instance, in the Middle East, the older you are the more your experience is regarded and, thus, the salary or day rate reflects this.

Now we come to the complex / thorny bit of the subject. The salaries and day rates that engineers in oil and gas enjoy also depends on which part of the world they come from. Salaries for engineers are very high in the UK, especially in London and Aberdeen, 'The Oil Capital of Europe.' Recently I came across an advert for a Process Engineer (refinery) requiring minimum 15 years' experience. Salary? £50,000 per annum, of which the location was Aberdeen. Sounds good? Well, deduct tax and NI and what are you left with? £30,000? So you're gonna have to get by on £2,500/month!!

But let me give you my own experience. Let us take Saudi Arabia. I worked in Aramco when I went there. I was only in Saudi a matter of weeks when it became obvious that there was a tier system when it came to management, employment grade and pay. Here is the tier system:

Top posts: Saudi nationals
Middle management: Saudis, US nationals
Superintendent: US nationals
Supervisory posts: US and UK nationals
Operations supervisors: UK nationals
Engineering technicians: Filipinos, Egyptians and Lebanese (in that order)
Trades: Indian nationals

The salaries reflected the posts, of course, and I would describe it in terms of percentages. The Saudis were paid about 20% above the Americans. The Americans were paid about 30% above the British, etc. The British were paid about 40% above the Filipinos, etc. I recently worked in Oman and nothing has changed to that of Saudi Arabia.

However, I will never forget when my American supervisor arrived on the scene. I had been in Saudi for about a year, an experienced Engineer with a training background. I had a mechanical engineering degree (HND). This guy turns up on the job. After about a month I got to know him better. He had never worked in the oil and gas industries; didn't know the difference between a 3-phase separator and a slug catcher! His degree was in geography, or something, and he had never worked abroad before! Yet he came on the job as my boss - can you believe that? Why? Because of his nationality. He was an American and he HAD to be put in the post as my supervisor. Nice chap, granted, but should never have been there in the first place.

What was hard to take was that he was earning perhaps $36,000 a year more than me. And you know something - this is January 2011 and nothing seems to have changed.