An Unenviable Job

You all know about the exploits of an engineer working in the Sakhalin oil and gas industry through my witterings on here.  But probably few will have read about a day in the life of a camp administration girl on one of the construction sites in the north of the island.  My friend Natasha, a Korean Sakhaliner, gives us a glimpse:

Another guy, or actually two guys. Someone took someones bed and they couldn’t decide who will sleep on the top bed and who on the bottom(a bunk bed? not sure about correct name for the bed). So they decide to come around to a Reception office and let me decide who should sleep where and who s wrong etc.  I never knew I could shout at the 40 ish y.o. man that loud and scary. Of course at first i was calm and tried to keep the situation under control, after about 20 minutes of listening two babies cry I when the phrase “I want justice” I lost it.

Around 10 “I want to change my room, the guys are snoring and there is a wind coming in from the power socket”
me- “So they do snore in my room and the wind blows from the sockets, and they will snore in another room and the wind will blow too, if not from the socket, then from the night light that was screwed into the wall all the way through out. Furthermore i don’t have a spare bed just to put you in”

Poor girl.  Read the whole thing.


Putin: Protector of Russian Women

I’ve read some pretty whacky justifications for the state of affairs in Russia in blog comments before, but this one is new to me:

Putin regime’s re-nationalization of Russian mineral resources was key to restoring political sovereignty of Russian state.

Politically and fiscally, the only option at the time was re-nationalization. Otherwise, Russia would have turned into something like Iraq: American colony in which citizens are tortured and murdered, and women raped at will of occupiers.

Yes, Rosneft and Gazprom had to be granted monopoly rights to develop Russia’s offshore fields in order to prevent Russian women being raped at will by Americans.


Doing Business in Russia – Part 5

If you want to set yourself up as a company in Russia providing, amongst other things, scaffolding services (for construction, not public executions) then you need a license.  This seems reasonable enough, as badly assembled scaffolding can be pretty dangerous.  The problem is, the Russian regulations don’t recognise scaffolding as an activity in its own right, it comes under the umbrella of “Construction”.  So in order to provide scaffolding services, you must have a construction license.

A construction license in Russia allows the holder to engage in pretty much any kind of civil construction he chooses.  In other words, to get permission to throw up scaffolding you need to demonstrate you can build a tower block or motorway bridge.  Which goes a long way to explaining why there are very few scaffolding companies in Russia and generally people prefer to work off sticks leaned up against a wall with the occasional piece of string holding it all together.

But what if you are only want do scaffolding and not build tower blocks?  How do you go about getting a license?  Actually, I don’t know.  Very few people do.  But those very few people can be hired for the specific purpose of getting you a construction license (it is not just scaffolders that have this problem).  I don’t know who the lady was who got us ours, but I did know she came into our office and spent a good month on the phone and running around the town with piles of paper.  One of her roles was to identify licensed architects, civil engineers, and other building specialists which appear on a list of people you must have in your employ if you want a construction license.  Once identified, these people would, for a fee, sign a contract with your company.  Who they actually were is anyone’s guess, we never saw them, but we did have contracts of employment for enough people to design and build a hideous, square, concrete skyscraper with rendering that would fall off within five years leaving the rebar exposed.  The lady ran about with papers, I signed them, she went and got them stamped, we handed over money, and sure enough eventually we had enough paper with enough stamps on them to enable us to do some serious civil construction.  But we only wanted to do some scaffolding, of course.

We submitted our application, and waited a month.  Then we received our construction license, having paid whatever fees were required both official and non.  The entire process took somewhere between 3 and 4 months.  In Russia, construction licenses must be renewed every year, and the renewal process is no different from the first application that I described above.  The lady who helped us with ours had a full time job getting people construction licenses, and she didn’t come cheap.  And there must be engineers scattered about Russia who are simultaneously employed by a dozen or so companies they don’t know exist.  Still, this is the price you pay for ensuring Russian scaffolding is of a high standard, right?  Surely such onerous regulatory requirements mean that all scaffolding is assembled correctly and poses no danger to anybody?


Russian scaffolding, Yuzhno-Sakhalinsk

Russian scaffolding, Yuzhno-Sakhalinsk

(Doing Business in Russia – Parts 1, 2, 3, & 4 are here , here, here and here respectively.)


Finally, some cool heads

From Upstream Online:

A gas leak on US supermajor Chevron’s Alba platform in the North Sea yesterday is under investigation.

Personnel on board the platform, 130 miles north east of Aberdeen, were called to muster yesterday afternoon around 15.00 GMT, said Chevron in a

“The 135 personnel on board at the time went to muster and all are accounted for, with no injuries. The muster was stood down by 16.15 GMT,” said the company.

“Emergency shutdown systems were activated immediately, functioned correctly.”

The company said the Health and Safety Executive (HSE) had been informed, and the cause of the release would be fully investigated.

Okay, so why isn’t the British press full of rage about dumbass, redneck, cowboy Americans ruining the pristine environment of the North Sea; why isn’t John Watson being hauled in front of a Parliamentary committee made up of loudmouth, lefty politicians who ask stupid questions and ridicule any answers they don’t understand; why hasn’t David Cameron gone to Aberdeen to show sympathy for those locals whose livelihoods have been affected by “American Chevron”; why isn’t the Socialist Workers Party calling for the nationalisation of Chevron’s UK assets; and why isn’t Chevron required to hand over a few billion quid for the government to distribute as they see fit?

Because unlike in Obama’s America, in the UK we believe it is better to find out what has actually happened and respond accordingly instead of shrieking hysterically, whipping up the media into a frenzy, and ramming through knee-jerk legislation.  Because, y’know, you might actually find out stuff like this:

The White House oil spill commission said today it found no evidence to support accusations that the Macondo spill happened because BP and its partners cut corners to save money.

“To date we have not seen a single instance where a human being made a conscious decision to favour dollars over safety,” Reuters quoted the commission’s Chief Counsel Fred Bartlit saying at a meeting exploring the causes of the Gulf of Mexico spill.

Bartlit said the panel agreed with about 90% of the findings of BP’s internal investigation of the accident released this summer.

Oh.  So that’s about 98% of BP’s critics over the summer proven wrong, then.  The remaining 2% were those with the technical nouse to understand that it was possible for BP to cock something up without necessarily being an arrogant, imperialist charicature straight from a Mel Gibson film.

Bartlit said the commission’s preliminary investigation found no evidence of this, and that it instead found that a series of factors ultimately contributed to the explosion.

Oh.  So it’s a bit more complicated than was initially made out.  Some of us knew this back in May.

Still, Bartlit emphasised that not everything done on the rig was safe. The investigating team found that BP took unnecessary risks as it tried to temporarily abandon the Macondo well.

That I can well believe.  However, at the time these risks may not have looked to be unnecessary.  Hindsight is always useful, and as I explained in this post, many of the decisions made in oil and gas are judgement calls, and those who have to make them are expected to shoulder a degree of risk and responsibility.  Somebody may have decided to take an unncessary risk, but equally he may have made a judgement without being fully aware of the risks associated with it.  It’s a fine line.

As he presented the commission’s preliminary findings, Bartlit stressed that the probe was not focused on legal liability or assigning blame.

“We’re not looking for scapegoats,” commission co-chair Bob Graham, a former US Senator from Florida, said at the start of the meeting.

No, the blaming process has already come and gone.  We all remember it well.  Now you’re the one with the cool head who’s supposed to find out what’s happened.  Shame it had to be in that order though, eh?  Still, it made it easier to keep the American companies out of the spotlight for a while, something which is now proving harder to do:

Deputy chief counsel Sam Sankar repeated the findings by a Chevron laboratory that Halliburton’s recipe for the cement slurry used at Macondo was unstable and offered evidence that Halliburton’s own tests as far back as two months before the 20 April disaster suggested the same.

“It doesn’t appear anyone highlighted this information” or that it registered with BP, Sankar 

Halliburton are questioning the conclusions of the oil spill commission, and the reasons why the BOP failed to operate are still being investigated.  This one still has some way to go.


Doing Business in Russia – Part 4

I was first exposed to common business practices when I worked in Dubai.  How to generate a budget, business development, financial reporting, all the usual stuff.  Included in this was the contents of a contract, and I realised that this could be pretty much whatever you wanted it to be provided the two parties agreed on it.  In its simplest form, a contract can be:

1.  Request for quotation, including description of services required.

2.  Quotation in response, referencing 1.

3.  Letter of acceptance, referencing 1 & 2.

4.  Staple in top left corner keeping 1, 2, & 3 together.

It can be even simpler than that when you consider the purchase of a train ticket for example, but in engineering business the above is about as simple as I’ve seen it.

And when you’re doing something like say, buying a CD containing software for managing scaffolding inventory from a small company in Australia, one would have thought you’d only need to send an email asking for a price, get a quote, send an email of acceptance along with an invoice, pay by bank transfer, and wait for the CD and receipt to arrive in the post.

Not so in Russia.  For starters, you can’t pay anything by bank transfer unless you have what is called a Passport of the Deal, which is a piece of paper the bank produces which says it has reviewed everything to do with the transaction and it has approved it.  The idea that a bank works for the customer in Russia is an alien concept, and you cannot merely instruct the bank to pay 20,000 Roubles to Company X’s account because you feel like it, and tell them it is not their business to ask why.  No, the bank is bound by law not to pay anything until it has issued a Passport of the Deal, and to get that you must supply them with a contract and invoice related exactly to the sum you wish to pay.  They then review this stack of paper, ask some stupid questions, and then issue the Passport of the Deal and transfer the money.  Eventually.  All of this is to prevent money laundering, and given the absolute lack of money laundering or other financial corruption going on in Russia, one can only say it works brilliantly.

I kid.

My second New Year in Sakhalin was the first in which I was managing a budget, and I was not particularly surpised to find myself buying stacks of Cognac and other goodies for the various authorities which you need to keep sweet in order to keep operating.  But I was somewhat surprised to find the accountant saying we need to buy lavish gifts for the company bank.  In the normal world, where banks work for you, it is the banks which come around doling out presents at Christmas.  In Russia, such is the inverted relationship, companies are advised to bung their banks gifts to keep them paying your company bills.

However, most Russian account departments do not recognise a contract as being a contract unless it is laid out in a proper contract document, complete with original signatures at the end, initialled on every page, blessed with a company stamp, and at least ten pages of pointless terms and conditions, the scope of work repeated a few times, price breakdown, etc.  And it had to be in Russian, and the prices must be in Russian Roubles.  Three pages stapled together was not considered to be a contract, even though I patiently pointed out to my company accountant that all the constituent parts which he expected to see were there, with the exception of the stamps and signatures.  But a piece of paper in Russia is meaningless without stamps and signatures all over it, and if there are several pieces of paper then their importance can be made all the more so by tying them together with string.  If this gets added to a stack and filed forever and never used or seen again, it must have been really important.  Russia is famous for having vast forests, and it’s just as well.

Where was I?  Oh, that’s right.  Anyway, all of this caused me a lot of bother when I wanted to buy this CD.  The Australian company we were buying it from, having not learned their business skills in the Soviet Union, was probably not going to entertain signing a huge contract in Russian for a simple software purchase, they probably didn’t own a three-inch rubber stamp bearing their company seal anyway, and I wasn’t going to make a complete numpty of myself by asking them.  So I arranged for our Bahrain branch to make the payment instead and, the little Gulf kingdom welcoming money launderers instead of chasing them away, had no such rules preventing it and the payment was duly made.

Then another problem arose.  Fortunately, I was warned of it by our accountant before the CD was dispatched.  Sadly, we wouldn’t be able to clear the CD through customs because, you guessed it, we didn’t have a proper contract for the purchase.  Yes, Russian customs needed a copy of the contract as well, it is not enough to show an invoice displaying the value of the goods and pay the duty on that.  So what did we do?  The Australians posted it to the UK office and it was passed to the next employee who was coming out our way.

When you work in Russia, you’d be amazed at what you end up carting around in your hand luggage.

(Doing Business in Russia – Parts 1, 2 & 3 are here , here and here respectively.)


Doing Business in Russia – Part 3

Via Andy at Siberian Light I have come across the rather good blog of Mark Nesop, calling himself The Kremlin Stooge, which I have added to the blogroll.  In one of his recent posts he asks:

What is it about President Medvedev’s attempts to set up a “technology city” at Skolkovo that drives some western journalists over the edge? It seems to be more than just the typical desire – again, on the part of some sources – to see Russia fail at everything it tries; these sources seem to be trying for self-fulfilling prophesy.

Journalists are generally idiots and masters at getting the simplest thing wrong; journalists writing about Russia are usually especially idiotic and ill-informed, although no more so in the west than anywhere else.  Still, a stopped clock can be right twice a day, and even if I wouldn’t agree with the western media’s reasons (whatever they are) for not rating Skolkovo’s chances of success too highly, I’d probably say they’re right if indeed they are predicting this project will go nowhere.  Skolkovo, from what I can make out, is an enterprise zone the Russians want to attract the IT giants of the world to set up shop in through use of various incentives such as low taxes, lifted visa restrictions, infrastructure, etc.   Dubai ran a similar programme called Internet City while I was there in 2003-2006 and it seemed to be fairly successful.  At least, all the right corporate signage was loftily displayed on the buildings.  The incentives Dubai offered were sponsor-free business and the ability to get a residency visa for staff based in the offices.  These were clear incentives, and they worked.

In theory, Russia could easily do the same.  But I am skeptical.  Why?  Because Russia could easily do the same across the entire country, yet hasn’t.  There are probably a lot of reasons for this, but one is that the stifling bureaucracy which puts the investors off in the first place and makes the building of an enterprise zone necessary is hugely profitable for many thousands of people: bureaucracy places the obstacles in your way, bribery gets you around them, making the paper-pushers rich.  Take away the bureaucracy and there’s no need for bribery, and people can’t supplement their income by virtue of their access to a certain stamp.  Yes, the Russian government could in theory do away with the bureaucracy in the enterprise zone, but in my experience pushing bureaucracy away in Russia is like moving water around in a bath.  Clear some away, and more rushes in to fill the void.  In my entire time in Russia – almost four years – I never saw any reduction in the level of bureaucracy I had to deal with in work or otherwise.  A lot of it changed, in fact most of it changed, almost every month.  And a lot of it increased.  But in no area, as far as I can remember, did it decrease.  I don’t think Russians could break the iron embrace of bureaucracy and corruption even if they wanted to, and I’m sure there were a few – let’s take Medvedev at his word, even – that do.  For a start, the edicts from Moscow get somewhat mangled, incorrectly interpretted, and sometimes completely ignored out in the provinces.  When I was in Sakhalin we suddenly found the immigration process had changed completely overnight due to a bollocking from Moscow being handed down to the local immigration department who had stuck with the old process for almost a year after the new one was issued.  Fortunately, Skolkovo is in Moscow so this effect should be diluted somewhat, but the temptation for some government department or office somewhere to stick its snout into a trough which nobody else has yet been able to eat from will be strong, and it would not surprise me if this happened and it was a year or more before the national government found out and did something about it.

Examples! Examples! I hear you cry!  Tell us about your experience with government departments in Sakhalin!  Okay, I will.

In one of the years I was in Sakhalin I was involved with the construction of an accommodation block, which could house about 100 people.  During the design stage, the Russian design institute drew up its plans and architectural drawings and submitted them to the local authorities for approval, which takes the form of a construction permit.  This process in itself is lengthy and painful, but that’s not the point of my post.  Naturally, the design institute had done everything it could to make head-or-tail of the Russian regulations regarding fire safety and put forward what it thought was a compliant design.  Unsurprisingly, this was deemed not to be so by the concerned fire safety authority and changes to the design were recommended and subsequently implemented.  The amended design was resubmitted, and the fire safety authority stamped its approval on the design and thus (from a fire safety point of view) was approved for construction.

Fast forward two years, and the building is almost complete.  People were getting ready to move in and the builders were only really waiting for the snow to melt to complete the rest of the works.  However, before people could move in the fire safety authority had to give its approval.  For this they charge a small fee.  Unfortunately, they will not consider any building that has not already been inspected and approved by a certain private company (almost certainly owned by a relative or friend of somebody in the fire safety authority), and the fee they charge is far from small.  I mentioned this “pre-approving” in a post last year about the costs of building a warehouse in Moscow, and it is a common occurrence in the process of getting approval for lots of things in Russia.  So we went ahead and arranged for this private company to come and inspect our new building’s fire safety systems.  And would you believe it?  Nope, all wrong.  Totally wrong.  That, that, this, that, and that: all wrong.  But it was built exactly as per the design approved by the fire department.  This didn’t matter one jot, apparently.  As far as the inspector was concerned, that we had an approved design meant nothing.  I believe the rough words were “I don’t know who signed that, but it wasn’t me and I say it’s wrong.” In normal countries these are grounds for a lawsuit.  In Russia, they are grounds for “negotiations”.  The fire safety authority itself was not in the least bit interested that they had approved a design which was now being rejected by their favoured company, and would probably have been mighty surprised if it hadn’t been.  Retrofitting fire safety systems into a completed building would cost about the same as pulling it down and starting again, so the process began of discussing “what could be done” in order to achieve the approval from the private company.  On this, they were most helpful.  You can do this, change that, pay us this, and the rest goes away.  And so we did.

I am sure the story above will be familiar to anyone who has tried to do business in Russia.  Unfortunately, very few people who have are writing blogs.  And even fewer people who write blogs about Russia have done business there.  The bloggers who write about Russia generally do a very good job (when they’re not writing about media coverage of Russia, which usually involves stating the obvious), far better on almost every issue than what I do on here.  But my experience of working firstly in running a business, and then involved in construction in Russia, is probably the reason why I don’t share a lot of bloggers’ optimism over Russia’s economic future or their specific development plans.  If they could have, they would have.

(Doing Business in Russia – Parts 1 & 2 are here and here respectively.)


The Best Hotel in Lagos

This evening there were men in the room opposite mine wearing gas masks and coveralls marked “Department of Public Health”.

Given what I’ve seen out on the streets which causes the local authorities, or anyone else, to bat not so much as an eyelid I can only imagine it is some freak strain of bubonic plague fused with the ebola virus being carried by a killer python.

Or somebody had reported the ham and cheese sandwiches.


A Month in Lagos, and a Look to the Future

Last Thursday marked my having been in Nigeria for a month.  The time has gone both quickly and slowly, which it usually does when you’re in a new place.  The weekdays whizz by, the weekends are over as soon as they begin, but you consider all the new stuff you’ve seen and done and can’t believe it has been only four weeks.

I’m finding it okay, but it is taking some effort to manage that.  Firstly, I should say, that so far the job I came here to do is shaping up nicely.  Extremely well, in fact.  I’ll not go into it, but that side of things is as good as I could have hoped for, and probably represents 90% of the battle.  Actually, torch that.  Being Nigeria, it’s about 50% of the battle.  Because being here is like being in a continuous fight just to stand still.

I will say now that I don’t like the place.  I’m sure if I said this to somebody here they’d patronise me by saying that I need to give it time, but Nigeria is the 36th country I’ve visited in my life, and the 6th I’ve lived full-time in.  If I cannot judge a country in a month, it is not through lack of experiences to use as a comparator.  I am still confined to the hotel, as there are no company apartments available and there is no news on when one will be.  Some people have ended up here for months waiting, and me being a bloke on single status, I am probably on the bottom of the list.  I don’t have much idea what sort of place I will end up in, but from what I hear the apartments are pretty nice and once I’m settled in one with all my stuff shipped over from Thailand I should be okay.  I’m also waiting for the next step in the process of buying my car, and then I have to find myself a driver, which everyone says is very difficult as there are not many good drivers around.  But everybody I speak to seems to have an excellent, honest, reliable driver who is apparently the best one in town and there are no others like him.  It’s a bit like everybody’s Russian girlfriend in Sakhalin spoke perfect English better than any other, and everybody’s Thai girlfriend in Phuket is the only one in town who was not a hooker when they met.  I’ve not yet met the bloke who gets taken to the bar which only locals go to and no other expat has been there, but I’m sure it won’t be long.  Or maybe it will.  I expect a bar in Lagos where no expat ever goes is a place where no expat ever comes out of.

I need a car, and I need my apartment.  Not that there is anywhere to go except the triangle between home, office, and the grocery store but I need to get into a comfortable routine, because it is that which makes the time go quickly.  At the moment I am in what I will call an uncomfortable routine.  I was somewhat startled to find a skinny, athletic looking chap standing in my room when I came out of the bathroom the other day.  He had shoulder muscles which I’d never had, a flat stomach the likes of which I’d not had since my first year of university, and looked to be capable of running further and faster than I’d managed since May 2003, the month before I emigrated.  This stanger turned out to be me, apparently what I look like after a month of spending an hour in the gym six days per week.  All of a sudden my trousers (bought before my Thailand loaf-athon) fit properly, the belt is once again on the last hole, and I feel an awful lot better.  And I have another 6 weeks of this to go before my wife next sees me.  Let’s hope she recognises me and doesn’t whack me over the head with a saucepan.  But it’s not vanity that’s driving this, and the real purpose is twofold.  Firstly, I am eating hotel food every night and I was not exactly in great shape when I arrived.  If I didn’t do any exercise, I’d probably be pretty unhealthy after three years and I took a conscious decision to go to the gym before I arrived.  But the second purpose is to stop myself slipping into a state of depression, which I can feel banging on the door every time I stop and think for a moment.  Three years is a long time, and when I leave I’ll be 36.  Still young, but not as young as the 33 that I am now.  I will have been apart from those I care about – and there are a lot of them, scattered all over the world, especially if you equate caring for somebody with helping them prop up a bar or just sitting about bullshitting – almost the whole time.  I’ve asked myself several times if there is a better option for me right now.  And fortunately, the answer is no, there isn’t.  Had I kept my mouth shut in my last job, I would probably still be there, in a country I’d much rather be in with some friends around me .  But I’d be in a dead-end job with a third-rate company, and eventually that would have ended anyway and I’d be pretty much where I was 7 months ago but with no guarantee of landing on my feet like I managed to do this time.  And I’d have had to watch the last of my friends slowly demobilise, one by one, until I was pretty much the last one left.  I’d hate to do that.

So I’m here, and I don’t like it, but I know that this is where I need to be.  And I’ve found the way to stop endlessly asking myself the same question and to prevent a bout of depression barging in through the flimsy hotel door is to make myself so damned physically tired that I actually enjoy just lying on the bed watching stuff on my laptop and consider it a good use of my time.  That’s the real reason I’ve been in the gym almost every night, because I need to get into a state of mind whereby I am content with where I am and that is the only way I know how.  I’ve also laid off the drink almost completely, afraid of what it might do.  Golden rule: never drink alone, especially in a hotel room.  I’ve taken to drinking two pints of orange juice a day instead.  If I turn up somewhere looking like Bart Simpson, that’ll be why.  When faced with a period in a place where you don’t want to be, the best thing to do is to ensure you use the time productively.  To this end, I have set myself some goals.  I have to learn French, that is a must.  I expect my next assignment will be in Paris and living there is almost impossible without knowing basic French.  The French lessons I was promised have failed to materialise so, as with so much else in expatriate life, I have to sort it out myself.  I have ordered some textbooks, put the word out that I am looking for a private teacher, and as soon as I have either one of them I am going to be putting serious hours into it.  I’ll use the same techniques I used to learn Russian – old-fashioned textbook exercises, a teacher, and lots of practice – which I know work for me.  I’ll keep going to the gym, I’ll try to get better at the guitar and maybe have a crack at the banjo (that’ll please the neighbours), and do a lot of reading.  I left the year I spent in Kuwait knowing the basics of the guitar, having read War and Peace, and with an open water scuba diving certificate, and I need to do a similar thing here.

Self-disciplined lives tend to be pretty dull, which means there may not be so much to write about.  I reckon the descriptions of Lagos and Nigeria in general will hardly vary and I’m not going to spend three years writing about chaos.  The Russian chaos was humourous, in a dark sort of way.  Here it is anything but.  I’m lucky that so far the people seem to be all right, and hopefully my opinion will stay that way, but even if it doesn’t I’m not going to be writing negative stuff about Nigerians very often.  I don’t want this blog to turn into one big complaint, especially if it’s stuff which is obvious and merely repeated over and over.  So I don’t know how much writing I’ll do, although I intend to keep writing about the Russian oil and gas business and the idiocy which characterises much of oil and gas recruitment.  But if I find there is not much to write about I might start a few creative writing projects I’ve got in mind, and post the results on here from time to time.

And that’s the beauty of writing a blog, you can make it into whatever you like.  And, maybe, it might just keep me sane.  Do keep reading.


Australia Drags Its Feet

Back in May of this year I wrote a post about the shortage of manpower the Australian oil and gas projects are going to face in the near future, and predicted that:

[A]t some point the Australian government is going to have to relent and let the project operators sponsor foreign workers, and I’m sure that will happen in a year or so.  But the Australians are going to make the same mistake almost all the oil industry does with tedious, cyclical regularity: wait until the market is booming and the very last minute before launching and all-out, desperate, recruitment drive in order to get the project staffed properly.  The likely result?  Twice the price for the wrong people who stick around only half as long.

It seems that the Australian government has foolishly been too wrapped up in getting re-elected and forming coalitions to read my blog and heed the warnings, as this article in Upstream Online tells us:

In a recent report, advisory company KPMG said Australia was already facing a shortage of skilled labour due to its ageing population.

“We’re actually going to see a natural decline in the Australian workforce in the next 30 years or so because of less people coming into the workforce,” said Jason Berry, a migration services partner with KPMG, which recommends that LNG developers recruit abroad and take extra measures to retain workers.

Unless large projects are staggered, labour costs could soar up to 40% as companies compete for labour, Berry told Reuters.

“If everyone wants to do the key part of the project at the same time, contractors will just pay what the market demands. It will become a merry-go-round of salary increases.”

A merry-go-round of salary increases.  Yes, that’s pretty much what I was on about.  But what are the government doing about it?

The growing demand for workers has led some analysts to believe Australia will have to consider easing migration laws and look overseas to fill the labour gap.

However, Australian Prime Minister Julia Gillard’s minority Labor party government has advocated a decrease in immigration, despite granting an exception for “enterprise migration agreements” that allow foreign workers to migrate for mega resource projects.

But Reuters quoted one analyst as saying the Labor government was unlikely to change migration policy dramatically and risk its relationship with Australian unions.

Ah.  So a merry-go-round of salary increases seems to be pretty much what the government, or at least their supporters, want.  And how’s that unionised industry working out so far?

Woodside Petroleum’s A$13 billion (US$13.2 billion) Pluto project has already been dogged by several strikes over demand for higher pay and improved working conditions.

In August Woodside delayed the expansion of the gas project saying it would give it extra time to develop its own exploration program.

Sounds great.  Looks as though the Australian government is all over this problem.

In entirely unrelated news:

Anglo-Dutch supermajor Shell announced that it had sold part of its stake in Australia’s Woodside Petroleum for A$3.3 billion (US$3.3 billion), representing 10% of the total issued shares in the Australian giant.

Shell said it had entered an underwriting agreement with financial services company UBS for the sale of 78.34 million shares, representing 29.18% of its interest in Woodside at a price of A$42.23 per share.

As part of the deal Shell has agreed to hold its remaining 24.27% stake in Woodside for a minimum of one year.

Shell chief executive Peter Voser said the sale was part of the company’s global strategy to improve its capital efficiency.

“We will increasingly focus our investment in Australia through direct interests in assets and joint ventures, rather than indirect stakes,” Voser said.

Which is an interesting development, because:

In 2001 Shell attempted to win control of Woodside but the move was blocked by the Australian government and in September the supermajor quashed rumours of a second takeover attempt.

Somebody told me that the reason Shell’s purchase of Woodside was blocked was because the government feared the Woodside projects would not be given enough prominence by a giant like Shell, and Australia might end up with its best oil and gas prospects undeveloped as Shell pursues grander projects elsewhere.  It is somewhat ironic that Shell is now seemingly pulling out of Woodside preferring to go alone at a time when the Australian government seems committed to ensuring its oil and gas projects are faced with delays, cost overruns, and labour shortages before they’ve even got off the ground.


Not Recommended for Honeymoons

Twenty ways to tell that your hotel is crap:

1.  Housekeeping leaves a dirty coffee cup on the table for two days.

2.  You can make a cold face-mask with a towel and still watch TV.

3.  Half the TV channels work half the time.

4.  The internet costs $1 for 5 minutes.

5.  They fumigate the rooom every month, causing dying cockroaches to drop from the ductwork that night.

6.  You have a shower and foot/ankle bath simultaneously.

7.  Laundry takes an hour to collect on a good day.

8.  Eight hours on a bad day.

9.  And it comes back sized for Action Man.

10.  Half the bulbs in the hotel sign have blown.

11.  You have to ask the waitresses to replenish bowls/milk/spoons/coffee cups at breakfast.  Every single morning.

12.  Prostitutes hiss at you from the bushes.

13.  The bottom of the bed and edges of the sofa are black with grime.

14.  The bathrobe is sized for a 12 year old girl.

15.  The minibar is empty.

16.  Walking from one part of the hotel to another involves similar levels of peril to crossing the M25.

17.  Getting a full set of towels is a bonus.

18.  Washing a pair of socks costs $1.60, a shirt  $5.60, and a pair of trousers $9.30.  Pressing is 50% extra.

19.  The air conditioner sounds like a diesel engine.

20.  The room rate per night is over $250.  Breakfast is an additional $28.  This is a basic room, prices for other rooms go beyond $1,700 per night.

Welcome to Nigeria, and the best hotel in Lagos.