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Providing coverage of Alaska and northern Canada's oil and gas industry
November 2008

Vol. 13, No. 45 Week of November 09, 2008

Rig crews want pay boost

Despite facing some of the gloomiest prospects in years, the Canadian Association of Oilwell Drilling Contractors is recommending average wage hikes of 7 percent to 24 percent for hourly driller and service crews.

CAODC President Don Herring said the increase is needed to retain skilled workers, arguing his association had “little choice but to respond to the needs of our people and adjust wages (entering the peak winter drilling season).”

He said there has been no indication from exploration and production companies that they are “failing to maintain cost of living increases for their own people and, frankly, if it’s fair for them it’s fair for our people.”

The 2008 proposed rates range from an increase of C$2.75 an hour for drillers to C$40 and a C$5 an hour rise for lease hands to C$26. For a five-member crew running a 12-hour shift, the pay scale represents an 11 percent across-the-board increase.

John Tasdemir, an analyst at Tristone Capital, said that what CAODC may have thought was realistic a month ago is now questionable.

He wondered whether energy markets in Canada would be able to support such an increase.

However, Galleon Energy drilling manager Ryan White said that although the timing was “not the best,” the service industry is faced with a challenge to attract skilled people back to rigs.

But he said that if rig utilization falls short of expectations this winter E&P companies will likely ask the contractors to renegotiate some rates.

—Gary Park






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