Author Topic: After 350,000 Layoffs Oil Companies Now Face Worker Shortages  (Read 1241 times)

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Offline SirLinksALot

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SOURCE: OILPRICE.COM

URL: http://oilprice.com/Energy/Energy-General/After-350000-Layoffs-Oil-Companies-Now-Face-Worker-Shortages.html

by: Nick Cunningham

_______________________________________

There could be a growing shortage of skilled workers in the oil industry.

That may seem counterintuitive in an industry that has been rapidly shedding workers, with more than 350,000 people laid off in the oil and gas industry worldwide.

Texas is one place feeling the pain. Around 99,000 direct and indirect jobs in the Lone Star state have been eliminated since prices collapsed two years ago, or about one third of the entire industry. In April alone there were about 6,300 people in oil and gas and supporting services that were handed pink slips. Employment in Texas’ oil sector is close to levels not seen since the aftermath of the financial crisis in 2009. "We're still losing big chunks of jobs with each passing month," Karr Ingham, an Amarillo-based economist, told The Houston Chronicle.

But the damage to the oil industry’s workforce could be exactly why companies could face a skills shortage in the months and years ahead.

North Dakota had nearly 1,000 drilled but uncompleted wells as of March, and more companies are showing some signs that they might step up completions now that oil prices are above $50 per barrel. But they might find it difficult to ramp up the rate of completions if they cannot field enough workers. There are only about eight fracking crews left in the state, down from 45 two years ago, according to Reuters. Fracking crews are brought in to frack and complete wells for oil producers.

A recent survey of oil companies in the Bakken revealed concerns from the industry about the dismantling of fracking crews. “Even if prices went to $100 per barrel of oil, you don’t have any frack crews available to complete all the wells that need fracking,” one survey respondent told Hart Energy Market Intelligence.

One oil worker recently interviewed by Reuters illustrates the problem for places like the Bakken. John Ritchart, a worker that was responsible for heating water for a fracking crew, packed up and left North Dakota, moving back to Washington State after his pay was cut by 30 percent. “I can feed two people at home for a month for what it costs me to eat in Williston for a week,” Ritchart told Reuters. “I can’t afford to stay here.” The city of Williston, located in the heart of the Bakken, saw its population shrink by 16 percent since the summer of 2015.

At a recent industry conference in North Dakota, a top executive at Hess Corp. said that dismantling crews can be counterproductive. “If you just stop your entire operation, you send all your contractors home, you lose all your completion supervisors and you end up in a situation where you have to start all over again,” Gerbert Schoonman, Hess vice president in the Bakken, said at the Williston Basin Petroleum Conference in May.

But the thousands of laid off engineers, technicians, geologists, and rig workers won’t sit around waiting for oil prices to rebound. Many are moving on to find work in other states and in other industries. In Texas, some laid off oil workers are increasingly finding work in the solar industry, which may not pay as much as working in the oil fields, but does offer more stability. One solar company in San Antonio told Marketplace that about a quarter of the resumes they receive come from workers who lost jobs in the oil and gas industry. The problem for solar companies is finding workers that are truly leaving oil and gas and not just waiting for a rebound.

As thousands of out-of-work oil and gas veterans find other jobs, there could be a shortage of skilled workers if drilling picks back up.

“There is going to be within the next, I think, six months to a year a real competitive war for the best and the brightest in this industry,” Les Csorba, a partner at the Houston office of Heidrick & Struggles, said in an interview with Houston Public Media. “You are seeing the baby boomer generation retiring, so you have an aging population within the energy sector…you are seeing an increased demand for technical competence and expertise.”

But the damage from two years of low oil prices is also doing its part. “Obviously we are going to see a number of defections from the energy industry. Young people that came into the business are now leaving because they are afraid of the cyclical nature of the industry,” Csorba said.

Offline IsailedawayfromFR

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Re: After 350,000 Layoffs Oil Companies Now Face Worker Shortages
« Reply #1 on: June 09, 2016, 02:05:19 pm »
#energy

hashtag test
No punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin~  George Washington

Offline Smokin Joe

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Re: After 350,000 Layoffs Oil Companies Now Face Worker Shortages
« Reply #2 on: June 16, 2016, 06:50:52 am »
For those of us in the drilling end of things, the production end has always had an enviable stability about it. That said, even the production sector has its slumps around a boom.
I have done wellsite geology for decades (224 wells, counting multilateral wells from the same wellhead as one well, vertical, directional, and horizontal, in Carbonate, clastic, and fractured volcanic reservoirs), and the slow increase in activity for nearly a decade before this last boom was a welcome change to the normally more fitful changes in oil prices and activity.

When my last rig was laid down, I took some time off from a pace as hectic as (or far more so than) any in any industry with which I have become acquainted.

Now, I am going to see if I can get work on a frac crew or some part of the production end of things.
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline mirraflake

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Re: After 350,000 Layoffs Oil Companies Now Face Worker Shortages
« Reply #3 on: June 16, 2016, 01:58:47 pm »
Things are picking back up in my area. RV's are coming back to the oil field rental lots, 2 wells have just been drilled near me.

The one RV lot I pass every day had 50 spaces..late last year and early this year it was down to 4-5 renters, now it's back up to about 25

Offline IsailedawayfromFR

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Re: After 350,000 Layoffs Oil Companies Now Face Worker Shortages
« Reply #4 on: June 16, 2016, 02:09:59 pm »
Now, I am going to see if I can get work on a frac crew or some part of the production end of things.

quite a diff gauging wells or a starting up a frac pump than looking at well-logs or cuttings.

Need a bit more muscle, too.
No punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin~  George Washington

Offline Smokin Joe

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Re: After 350,000 Layoffs Oil Companies Now Face Worker Shortages
« Reply #5 on: June 16, 2016, 05:07:17 pm »
quite a diff gauging wells or a starting up a frac pump than looking at well-logs or cuttings.

Need a bit more muscle, too.
I'm in pretty good shape, yet, but after a hernia repair, I'm limited to 75 lbs. according to the doctor. That's the only time I have ever had a lift limit. As for looking at well cuttings, try a sample every six minutes, for twelve hours--and keeping track of GR and surveys in your spare time, everything updated as you go. I could use a paid vacation.
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline Weird Tolkienish Figure

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Re: After 350,000 Layoffs Oil Companies Now Face Worker Shortages
« Reply #6 on: June 16, 2016, 05:23:17 pm »
Good ol' corporate America, never thinking past the next quarter.  :laugh:

Offline IsailedawayfromFR

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Re: After 350,000 Layoffs Oil Companies Now Face Worker Shortages
« Reply #7 on: June 16, 2016, 07:08:40 pm »
I'm in pretty good shape, yet, but after a hernia repair, I'm limited to 75 lbs. according to the doctor. That's the only time I have ever had a lift limit. As for looking at well cuttings, try a sample every six minutes, for twelve hours--and keeping track of GR and surveys in your spare time, everything updated as you go. I could use a paid vacation.


Watch out, I just might keep your note and send your comments to the frac boys you will be working with on easy they have it compared to geologists.  I'd love to be there with all of you when they read it out loud.
No punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin~  George Washington

Offline Smokin Joe

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Re: After 350,000 Layoffs Oil Companies Now Face Worker Shortages
« Reply #8 on: June 16, 2016, 11:11:14 pm »

Watch out, I just might keep your note and send your comments to the frac boys you will be working with on easy they have it compared to geologists.  I'd love to be there with all of you when they read it out loud.
Actually, I was thinking of the pumpers I know. Fracs are fairly hectic, I am sure.
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis