Incentives beyond salaries coming into play

Geologists’ Pay Continues Upward Trend

With a 15 percent run-up in the salaries for petroleum geologists over the past three years, the AAPG Annual Salary Survey showed the upward trend continuing – with a few interesting caveats.

The weighted overall average salary for petroleum geologists was up 2.3 percent in 2011-12. However, take a look at who’s getting what – and how.

Mike Ayling
Mike Ayling

Mike Ayling, of MLA Resources in Tulsa, who has conducted the annual salary survey for AAPG since 1981, said the largest increases came in the high-demand 10-14 year experience group, with 10.3 percent hike in pay, and the15-19 year experience group showing a whopping 28.1 percent gain.

Interestingly, the 25-plus year group showed a 3.3 percent decline. However, Ayling noted that the negative salary number is a bit misleading.

“This may be partly explained by a much lower maximum salary for the group,” Ayling said, “but is also reflective of a change toward incentive compensation for highly paid individuals. Bonuses and participations can often exceed base salaries for this group.”

Anecdotal information gathered by the EXPLORER backed up that view, with confirmed reports of advertised positions offering sometimes double the annual salary in bonuses or stock options.

The annual salary survey is based on employed, salaried geoscientists and is based on salaries alone. It does not include bonuses, overrides, employee benefits, autos or other perquisites.

It does not attempt to include anyone whose compensation is in the form of consulting fees, retainers or overrides.

Digging Deeper

The 0-2 year experience levels showed a small increase – average salaries for that category were up 6.2 percent.

“Recently graduated bachelor level geologists had a difficult time finding work,” Ayling said, “and the few that did worked for lower salaries, depressing the overall average.”

He pointed out that a master’s degree is the “working degree” for petroleum geologists, and also noted that in the average salary by degree for the 15-19 year experience group was nil this year “because there weren’t any bachelor’s geologists in that grouping to chart.”

Otherwise on the hiring scene, Ayling said the activity was somewhat dampened due to regulatory uncertainties and the ambiguities of an ultra-high oil price and the bargain-basement gas prices.

The market dynamics of companies shifting focus from gas to oil and the resulting debt from buying expensive product have created somewhat of a manpower muddle as the companies geologists’ skill sets to redefine a focus and the need for shift.

Meanwhile, as the AAPG salary survey indicates, the demand for petroleum geologists continues.

The survey is based on U.S. salaries only, considered the “gold standard” for the industry. The measurement for international salaries for explorationists is virtually on a country-by-country, case-by-case basis, Ayling said, which makes statistical averaging non-productive beyond the boundaries of any specific country.

Also, many ex-pats are paid U.S.-based salaries, while the national oil companies opt to pay compatriots on a different, lower scale.

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