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Cyprus Oil & Gas: 7,500 jobs by 2016

27 June, 2013

 * Gov’t task force needed now to create jobs; Vasiliko LNG plant to keep hiring until 2027 *

With the appraisal well underway in Block 12 to confirm natural gas deposits and the exploration partners keen to develop a land-based liquefaction plant for exports, the Cyprus labour market will be gradually shifting to more construction and engineering based jobs, helping to diversify from tourism and financial services.
Already, Noble Energy, operator of Block 12 in the Cyprus Exclusive Economic Zone, has rented office space at the Consulco building in Nicosia to house its 30 local staff, while France’s Total, with an exploration license for southwestern blocks 10 and 11, has rented offices in the K. Athienitis building on Them. Dervis street, initially fro its core office personnel supervising seismic test results.
Other companies, too, will be looking to hire their own staff and space, while providers of support services and logistics will set up shop, looking to serve their clients in the wider eastern Mediterranean region.
But with work expected to begin on building a liquefaction plant near Vasiliko some time in 2016, recruitment is expected to rise from “tens to hundreds” and eventually to as many as 7,500 for that project alone.
Oil companies are hiring at a very slow pace right now, Charles Ellinas, executive chairman of the Cyprus National Hydrocarbons Co. (KRETYK) told the Financial Mirror, “perhaps tens of people and rising further by 2014. We will see a visible increase by 2015”.
“But in the next phase of work as construction for the LNG plant at Vasilikos gets underway by 2016, the project will start hiring more people, maybe even 7,500 people, nearly 30% of whom may be from Cyprus. However, of all those only 400 will be white collar university graduates with the rest being low-skilled blue collar workers.
Furthermore, as soon as Vasiliko starts, there will be a need for many more jobs, as by 2017 the plant will have to start work to add more trains which will involve construction work for ten years beyond that, thus lasting until 2027, Ellinas said.
A recent workshop hosted by the University of Cyprus and the British High Commission identified what is needed.

TASK FORCE… NOW
“They recommended the government should set up a task force involving the relevant ministries, the universities, the community and all stake holders. There is a lot of experience to be earned from other countries in a similar position to where we are today.
“I urge the government to proceed with such a task force immediately that will look at the long-term education and training, creating jobs at all skill levels.
“For every Cypriot job in the construction sector, there are 4-5 other jobs in parallel and support services,” Ellinas said, bringing the example of Noble when it first set up in Israel to develop the Tamar field. Initially, they hired 20-25 people. Now, the company has 300 employees.
“By 2019-2020, once the LNG plant comes on stream, there will be a need to hire management and administrative staff as well.”
To begin with, the state needs to make up its mind on what to do with KRETYK and the gas distributor DEFA, possibly merging the two. Until then, all hirings at the two companies have been frozen.
Ellinas added that DEFA needs 500 mln euros to build an islandwide natural gas network to reach all households and that this venture alone will create “hundreds of jobs” for skilled and semi-skilled workers who “will have enough work over the next decade”. He added that this calls for the introduction of more vocational courses for mechanical engineers in local colleges to satisfy the drastic need that will follow.
“Finally, when work gets underway at the Vasiliko plant, both onshore and offshore, all the support companies will need to set up base in Cyprus. These companies will take up vast areas for logistics and supply services, and actually much more and bigger facilities than what Weatherford is already using.”
Weatherford International Ltd., one of the largest oilfield services companies in the world, has long had a presence in Cyprus with a logistics and storage facility in Larnaca.
The Cyprus office is both an active operational base with a primary focus on equipment repair and maintenance, as well as project management team that operates around the globe. Weatherford currently employs 15 full time personnel with varied levels of expertise. This includes six local Cypriot based personnel and nine rotational personnel, from all over the world. They are planning to hire additional people in the next several years with a target of 20-30 full time staff.
Vitol-subsidiary VTT Vasiliko is spending 300 mln euros to build 12 tanks at its oil storage facilities, also located at Vasiliko.

VTTV HIRING FOR 2014
VTTV’s Managing Director, George Papanastasiou, wrote in the company newsletter that the company is already recruiting personnel that will operate the storage facility from 2014 with no less than 1,000 applying.
Steve Slocombe, Director of GRS Oil & Gas, a specialist division of recruitment experts Global Recruitment Solutions with offices in Cyprus and Malta, said that it is too early, but the potential is big.
“We have received some recruitment mandates from oil and gas companies that have recently set up operations in Cyprus. At this time it is a very small percentage of vacancies. Key positions are being recruited by the headquarters of these companies in their country of origin,” he told the Financial Mirror.
“However, once the three main players Noble, Total and ENI/Kogas confirm their finds we will then see an increase in the recruitment activities. We also anticipate higher volumes of recruitment from the sector to be outsourced to GRS once the LNG plant is confirmed and construction commences in 2016,” Slocombe concluded.
Another expert in the jobs industry said that apart from the forex trading companies, which are the main driving force of new hirings nowadays, the oil and gas industry seems to have the potential to have a positive impact on the economy as well.
“We are already working with a number of companies within the oil and gas industry who have or who are in the process of setting up offices here, which are very positive signs of things to come,” said Tony Papadopoulos of Limassol-based StaffMatters Recruitment Specialists.
“Although we are aware of the difficulties that we are facing within the job market at the moment, the positive signs we can see on a daily basis coming from industries such as the oil and gas and Forex industries, we are optimistic about the future.”
Meanwhile, the University of Nicosia is seeking applications for faculty positions to teach in the Bachelor and Master degrees in Oil and Gas Engineering. These are new programmes and the persons selected are expected to play an instrumental role in the design of the programmes.