How much am I worth? Global Head of Oil & Gas, Corporate Finance, UK Investment Bank
A panel of specialist headhunters give their assessment of typical pay packages. Global Head of Oil & Gas: salary 150,000-200,000, bonus, in a good year, 300-400%. Much less this year.
Trying to find a sector that has proven itself immune to the current downturn in confidence is no easy matter. Until the Enron and WorldCom scandals, who would have thought that auditors, who usually thrive when markets head south, would have found themselves such an unwelcome focus of attention?
Yet according to some observers, the oil and gas sector was, until recently, proving itself the exception to the rule, despite the unsettling presence of Enron and Halliburton, another troubled US energy services company.
"M&A activity in the oil and gas sector has remained buoyant over the past two years, as the implications of the new competitive landscape continue to unravel," says Chris Haynes of Alexander Mann Global Markets (AMGM). He, and others, point to a wave of merger activity in the first part of the year which, whilst hardly matching the heyday of BP and Burmah-Castrol, looks positively healthy compared to the generally moribund state of markets elsewhere.
Earlier this year, for example, deals between the National Grid and Lattice, Shell's acquisitions of Enterprise Oil and Pennzoil and BP's $18bn Sidanko deal all helped revitalise the market, as has the high oil price which has reminded people that energy is a sector which matters.
However, things have slowed down considerably in the second half of this year and the outlook is not good. Shaun Springer argues that except for the top 1% of this market, who can still command packages in excess of 1 million, the sector is dead. "The average can expect a basic of 120k with no bonus this year," he says. Indeed, he goes further, suggesting hopes of a recovery are misplaced.
"Prospects are very poor for 2003, with many predicting another 10 years to reach the corporate finance activities reached in 2000," he concludes.
Others disagree, pointing perhaps to the narrowness of the market. Many institutions either no longer have an oil and gas team or have merged them into a general energy or utilities team - reflecting the way traditional oil companies have themselves diversified - or even into a general corporate finance group, which means there are fewer real specialists out there.
"This is not a sector everyone covers," says Owen Beere of Citipeople, who says banks need a big balance sheet to deal with developments on the debt capital side.
AMGM's Haynes believes base salaries this year will be somewhere between 150,000- 200,000. He declines to hazard a guess on bonus levels this year, though they will be well below last year's range of 300 - 600%.
Although some global heads might have industry or technical expertise, most will have come through the ranks, will have solid investment banking expertise as well as a firm background in making and keeping relationships amongst the key players in the market. With a more consolidated market and greater awareness of the need to sustain Chinese walls, finding that key deal is that much harder, however.
Those with experience of emerging markets - specifically, Russia - as well as oil and gas expertise may find themselves most in demand. The emergence of Russia's commercial oil sector as the second largest in the world has not gone unnoticed; with companies such as Lukoil, Yukos, TNK and Surgut now starting to report according to International Accounting Standards (IAS) as well as Russian Accounting Standards (RAS), the sheer potential of the sector is just beginning to become clear.
All are investing heavily upstream and downstream, which means more potential business for oil and gas groups in the UK and in other western financial centres. With merger and acquisition activity predicted within the Russian oil sector, and many of the smaller regional players expected to be absorbed into the top five or six, the payoff for those who can add value could be considerable.
