May 2014

Brazil becoming land of opportunity for skilled oil, gas workers

In Brazil, mind-boggling financial figures for oil and gas E&P, along with a severe shortage of skilled personnel, are opening up opportunities for expats.

Dayse Abrantes / Contributing Editor

In Brazil, mind-boggling financial figures for oil and gas E&P, along with a severe shortage of skilled personnel, are opening up opportunities for expats. Studies by Hays Consultancy indicates that from 5,000 to 10,000 skilled foreign workers arrive in Brazil each year to work in the oil and gas industry.

In addition to the $220.6 billion that will be invested by Petrobras in the 2014–2018 period, Petrobras partners should contribute an additional $63 billion. However, Brazil’s economy is hampered by lack of qualified labor, particularly engineers and drilling crew personnel. Brazilian President Dilma Rousseff, a former mines and energy minister and former head of the Petrobras board of directors, recently announced a program of massive state funding for a nationwide technical training scheme to produce 3.5 million new workers, at a cost of $500,000 just this year. Rousseff wants to fill the skills gap and keep pace with ambitious infrastructure programs mainly by focusing on training unskilled personnel to work in the oil and gas industry.

Currently, there are 77 oil and gas companies operating in Brazil, 38 of which are foreign companies from 19 different countries. The government is hoping that the new bidding rounds that took place in 2013 will attract more foreign investment. The next bidding round is planned for 2015.

The Brazilian government has recently begun a campaign to attract overseas oil companies to the region. There is a growing consensus that the vast majority of oil and gas resources within Brazil are yet to be uncovered.

With the lack of engineers, companies are searching abroad for offshore positions, such as operations superintendents, newly graduated engineers and other crew positions. There are 48 FPSOs planned for Brazil by 2020, plus another 300 vessels of different types. Professionals skilled in offshore operations will be at the center of everything.

The exploration of petroleum in the pre-salt should generate more than 2 million jobs, mainly in the oil industry, but also in various sectors of the economy, estimates Eloy Fernandez y Fernandez, general-director of Brazil’s National of Petroleum Industry (ONIP). The supply cannot keep up with demand fueled by economic growth. Two-thirds of Brazilian employers have difficulty recruiting suitable staff. The shortage is particularly acute in high-growth industries—energy, powered by deepwater, pre-salt exploration and driven by rising world crude prices; and also an ambitious program of social housing and infrastructure projects linked to the soccer World Cup in 2014.

According to the Education Ministry, Brazil trained fewer than 40,000 engineering graduates and architects per year, whereas industry and construction requires at least 60,000. To make up for the lack of graduates, Petrobras reputedly has six times more personnel than its overseas competitors. Yet, the company urgently needs Brazilians that are capable of helping to develop its reserves.

Many analysts see the lack of skilled manpower as the biggest obstacle to the development of these huge discoveries. It is well known that the lack of skilled personnel in the oil and gas industry is a worldwide problem. Workers from African oil-producing countries such as Namibia, Nigeria, Libya, Algeria, Egypt and Angola are also coming to Brazil, says the Labor Ministry, mainly due to the higher wages in Brazil.

According to the Fernand Braudel Institute of World Economics, based in Brazil, Petrobras University trains and retrains 70,000 employees yearly.

Petrobras’ Program for Mobilization of National Industry (PROMINP) trains workers for the company’s numerous  suppliers. There have been announcements of new emergency programs: The National Program for Access to Technical Education and Jobs (PRONATEC), aimed at offering 8 million places in 800 technical schools and federal institutes by 2014; Open Technical School (E-Tec) to provide long-distance instruction for 263,000 students by 2014; and the Foreign Study Program, offering 100,000 scholarships at universities abroad by 2014.

 “These announcements overlook the lack of qualified instructors for existing technical education programs, which has left 20,000 students without classes in federal institutes. There is also lack of a strategy and long-term effort to overcome, for future generations, the functional illiteracy. This includes large swaths of the working class, even among those who have completed an efficient secondary education,” points out  Norman Gall, executive director of the Fernand Braudel Institute.

Data suggest there has been a significant rise in the number of foreign immigrants coming into Brazil because of the sheer variety of opportunities, according to experts, with many newcomers arriving from the U.S. to work in the oil and gas industries.

In addition, foreign workers generally earn more than their Brazilian counterparts in oil and gas because they are more skilled, and the constant new discoveries in the pre-salt, especially for the ultra-deep waters, require more skilled workers. Research by the British Council shows that English speakers can expect to earn between 20% and 50% more. 

According to the Hays O&G salary guide, the average annual salary for foreign professionals increased by about 20% between 2012 and 2013, from $106,000 to $131,400. This represents a twofold increase compared to the world average of $87,300.

Analysts agree that one of the most challenging positions to fill is the contract manager, which requires a good amount of experience in dealing with Petrobras’ complex rules and regulations. 

British studies point out that, increasingly, UK workers are being attracted by highly paid jobs with benefits in a number of countries that are seeing heavy investment in their oil and gas industries, including Brazil. wo-box_blue.gif

About the Authors
Dayse Abrantes
Contributing Editor
Dayse Abrantes is a contributing editor of World Oil, based in Rio de Janeiro, Brazil. She can be reached at:
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