Jim Armitage: As far as oil and gas workers are concerned, money trumps risk - Business Comment - Business - The Independent

Jim Armitage: As far as oil and gas workers are concerned, money trumps risk

 

Global Outlook Engineers are a tough breed. Oil and gas engineers the toughest of the bunch. You have to be to work in the kinds of places with the most oil. Iraq, Saudi Arabia, Libya, Pakistan, Africa. Where there's oil, there's trouble.

So when you get a major incident like we've just seen in Algeria, while an eyebrow or two may be raised, don't expect engineers to sob into their hankies and call for their mums.

I spent today talking to several who'd worked around the world in areas of varying risk – Brits, Aussies and Americans mostly – and came across two recurring themes. First: where the hell were the security people? Second: I'd still work in Algeria if the money was good enough.

From what they said, the Algerian plant is typical of the kind of installation that peppers North Africa's desert and scrublands. Grim accommodation blocks under constant, heavy, armed guard. "Nothing to do but work your butt off seven days a week," says one.

Another tells of the Pakistani gas plant he'd worked in. Long periods – weeks at a time – stuck on an isolated base where there's nothing to do after your shift but gym, sleep, gym, sleep. "And just going to the gym was a nightmare as you'd need an armed guard to escort you there and back." Worst of all, it was dry, so they couldn't even spend their evenings getting plastered in a dingy, on-site bar.

But the money is good: five times more than they'd get paid in the UK, and often tax-free. And, of course, that's a big weight to balance against the risk of something going wrong. Especially when work is scarce here.

As one put it to me: "My job, like all engineers, is to assess risks.

"Deciding whether to take a job in a dodgy part of the world is just another risk decision.

"Algeria? You could argue that after this, it'll be one of the safest places to work in the world. Think what the security's going to be like there now."

Another, who's having some downtime in London in the middle of a "fly-fly roster" (fly in for six weeks, back for two, then fly back again for six), adds: "The trouble is when you get hooked on the money.

"I know roughnecks who keep taking all the riskiest jobs so they can afford to keep hitting the casinos, women and flash hotels in their downtime. You've got to make sure the money doesn't cloud your risk assessment. You might think 'it'll never happen to me' but the odds stack up against you."

So there's not a huge amount of sympathy around for the victims in Algeria.

Says one engineer: "Yes, you feel sorry for the guys out there, but you know they assessed the risk and were getting paid well. And if the money was right, I'd still go."

It's a similar story for Algeria as a whole. While it would be simple to say this week's tragedy will damage the economy and change it for the worse, it really won't.

Unlike, say, Egypt, or even Libya, Algeria has only one real industry: oil and gas. And the big multinational firms will continue to operate in the country while global prices remain high. Just like the engineers I spoke to: if the money's right, they'll keep going out there.

Attempts to boost other areas of the Algerian economy such as tourism have been tried – somewhat half-heartedly – over the decades, but been scuppered by violence. Attempts to encourage desert lovers to ride camels in the south were killed off by a mass kidnapping of Western tourists in 2003. Efforts to boost tourism on its beautiful Mediterranean coast were similarly been put off by unrest.

So, while it's a depressing event for Algerians, the country's economy will not suffer.

Dr Michael Willis of St Antony's College, Oxford, is an expert on the region. He says: "Over 95 per cent of Algeria's external earnings have come from oil and gas over the past 30 years and that's not going to change."

Algeria's main activity outside oil and gas is import businesses, he says: effectively recycling the huge foreign revenues which are sucked in by its energy exports.

The lack of other industry is fairly tragic in a country with spiralling youth unemployment. Despite its dominance of the economy, oil and gas isn't a big employer of this nation of 38 million. If you believe the official numbers, joblessness is currently running at 10 per cent, but most observers say it's higher, particularly among the youth.

The government has tried to bring in more overseas investment, it's true. But unlike, say, Morocco or Tunisia, the incentive isn't so great when you have such a wealth of oil and gas money coming in.

Dr Willis explains that's how Algeria now keeps a lid on civil unrest and has avoided an Arab Spring.

"If ever there's a grievance, it tends to get sorted out locally with a bit of extra funding from the oil revenues. The locals have a demonstration and the council will sprinkle some oil money around."

There's even a term for this kind of economic stewardship among some Algerians: "Local government by riot."

But without the oil and gas revenues, all that would rapidly unravel. The state knows this, and will redouble its security efforts around other installations in the country, as will the Western firms with staff employed there.

And the engineers will keep on coming.

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