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Thursday, November 12 - 2009

Oil costs escalate as engineers disappear

  • Kuwait: Monday, February 04 - 2008 at 20:01

Project construction costs escalated dramatically in the petrochemical sector over the past few years, causing delays and forcing some to be cancelled. Since 2005 costs are up 53 per cent, mainly through equipment and personnel. Upstream investment has increased 45 per cent to $400bn since 2006. Add to that a marked attrition in skilled engineers and the sector has some long term issues that must be resolved, said Hashim El-Rifaai, Chairman and Managing Director at Oil Development Company at the MEED Kuwait conference today.

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By 2017 48 per cent of the workforce will have retired, an attrition rate of six per cent.

But that number is not being replaced through new graduates. El-Rifaai pointed to a statistic from US universities, which stated that 300 petrochemical engineering students had graduated compared to 42,000 lawyers.

'The shortage of skilled labour and project managers translates into pay rises,' he said. In some cases, rises have hit 250 per cent over the past two years.

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