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By Sarah Young and Stephen Eisenhammer
ABERDEEN, Scotland, Sept 6 (Reuters) - At one of the largestoil shows in the world in Scotland's oil town of Aberdeen,hundreds of companies vie for new recruits, flaunting shinydrill bits and simulators amid free beers and women in tightwork overalls.
The global battle for talent in the oil industry is clear atthe SPE Offshore Europe conference set on a site bigger thanfour football pitches.
At a time when oil and gas firms are cutting costs to try toimprove profits and save cash for dividends, they face a skillsshortage that is leading to runaway wage increases.
A recent survey by Oilcareers.com estimated the UK alonewould need to attract 120,000 personnel over the next decade tocarry on production in the North Sea and replace a retiringworkforce.
Exhibiting at the show, which feels like a giant freshers'fair, was one way for the companies to attract young people intotheir ranks.
"Having a stand here is good for raising awareness of thecompany, particularly among students who might be looking forjobs," Bruce Ferguson, managing director at equipment makerHunting, told Reuters.
A group of six students from Perth High School in Scotland, weighed down with branded bags stuffed with brochures, sweetsand stress balls, told Reuters they were on the hunt forscholarships to pay their way through university.
Starting salaries, which in oil and gas rank third behindinvestment banking and law according to Graduates.co.uk, aregetting in the way of efforts to lower costs.
The problem is a global phenomenon with hourly earnings inthe oil and gas sector in the United States having risen 62percent over the past decade, according to that country's Bureauof Labor Statistics. Job site Rigzone puts the global averagesalary in the sector at $98,000 per year.
Despite graduates struggling to get jobs in most sectors inrecent years, oil and gas has bucked the trend with engineersand geologists in hot demand.
WAGES MUST FALL
Bob Keiller, chief executive of oil services firm Wood Group, told the conference in Aberdeen that pay needed to comedown to accommodate the now-declining nature of the North Sea,where output has fallen by two-thirds since 2000.
"If we're going to be truly successful in the second half ofthe North Sea industry, we really need to re-baseline our costbase, and quite frankly we need to do our business using fewerpeople and paying them less," he said during a talk.
But with oil and gas employers telling an industry surveyearlier this year that their major concern in the currentemployment market was a skills shortage, it doesn't look likethere will be room for manoeuvre.
"The money, that's always got to be a consideration, it'svery good," Nicholas Dubourg, 23 and studying engineering atAberdeen University, said as he walked around an exhibitionhall, chatting to potential employers.
He said he expected a starting salary of between 25,000 and30,000 pounds ($39,000 to $46,800).
Lynsey Angus, about to start studying geology at EdinburghUniversity and at the show to secure summer placements, agreed.
"I'm told everyone wants petroleum geologists right now, sothat makes my degree feel useful. Some people study somethingand then just end up working in a supermarket."
One longer-term solution to the skills shortage is moreautomated and remote-controlled equipment, enabling unmannedplatforms and cutting significantly the number of workers neededper barrel.
Andrew Gould, chairman of BG Group, said atechnological jump was needed to keep North Sea production aviable business option.
"The solution to many of today's problems with logistics isto use technology to reduce the number of people offshore."
