Hiring Trends Favor Regions Where Drilling is Most Prevalent

Hiring Trends Favor Regions Where Drilling is Most Prevalent

It is no secret that the oil and gas industry has (and will continue to have) a propensity for job creation. Domestically, look no further than the top-five drilling states for validation. Texas, Oklahoma, North Dakota, Louisiana, and Pennsylvania (in order of largest to smallest number of rigs in each state) currently control nearly 80 percent of all land drilling in the United States. All of these states have unemployment rates that are well below the national average of 9.1 percent. Combined unemployment of the five states, for the most recent month averaged 6.6 percent.

States With Largest Rig Count Have Lower Unemployment

Globally, the hiring picture over the past twelve months has been clouded by bursts of civil unrest. And while supply disruptions in Libya and quantitative easing in the U.S. (resulting in a weaker dollar) earlier provided catalysts for a surge world crude prices, the uncertainties encumbered within both scenarios, along with a global economic malaise (especially Europe), have kept the demand to staff up in a more somber state.

World Rig Count vs Average Crude Prices (Monthly)

It is against this backdrop that over the past year the industry has experienced a one percent decline in average wages. Typically, when the oil prices fall there is a four-to-six month lag before the impact is felt in the rig count. The correlation between the two (i.e. average world crude prices and rig counts) is quite high at 85 percent. Thus, with oil prices whipping back-and-forth, it is no surprise to see tempered wage expectations.

There is some commitment on the part of operators to continue drilling through the soft patch. However, with a lag of approximately four months baked into the drilling equation for rig demand; we will not know for sure if this is really the case until the winter of 2012. Moreover, OPEC's recent decision to cut its demand forecasts for this year and next suggests there is a growing risk that drilling plans may be curtailed next year.

2011/ 2010 Changes In Compensation By Region

Regionally, South America and Southern Asia have bucked the trend of a modest amount of wage deflation in the past 12 months. Unwavering plans to increase production in both regions, but primarily in countries such as Brazil in South America and India in Southern Asia, are the driving forces behind the improving hiring trends in each.

Average Annual Salaries By Job Function ($000s)

Rigzone's Compensation Tracker Online System continuously surveys job candidates. In the nine major job categories highlighted, careers in Geoscience experienced the highest salary growth over the past twelve months at +8 percent year-to-year. Drilling jobs garnered the highest wages of the various job functions and grew +6 percent versus the prior year. Another job function in high demand was oilfield services, where average annual salaries grew +4 percent compared to the year before.

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Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
WAYNE NEALY | Oct. 20, 2011
There is so big of a gap in the experience level of hands these days with older hands retiring or just shying away from technology,that a lot of injuries and equipment damage are on the rise in a more than ever safe work place.there is no reason for a rig to burn to the ground with all the preventers in place today and yet i watch one do just that just a couple of weeks ago.while i am all for the younger generation to take over where we left off, i just hate to see them hurt and mamed to learn what we have in our years.so i would ask oil companies to instead of just having a body in place to meet demand,have a older man with the experience to lead them.as a rig manager i train a lot of them and would hope for others to do the same. thanks, wayne nealy

Brian Partridge | Oct. 19, 2011
Benn, they aren't ring fenced, but it is something that takes patience. I haven't heard of anything being short term, maybe short term employed if you get fired or quite!! oilfiled is definitely a rewarding career, I have been working on drilling rigs land and offshore for over 7years, that may not sound like a lot, but anyone with 5+ is in it for life. I have hit a point now that i do not wanna go anywhere else, and if I was to quite my current company, I would definitely have to have my head examined!!! It takes time and patience for guys just starting out.

Benn | Oct. 19, 2011
I am happy to see that an industry sector is doing so well but it appears that jobs in this sector is ring fenced and difficult to get in. It would be delightful to read about new intakes into the oil & gas industries, albeit if it is on short term basis.

Brian Partridge | Oct. 18, 2011
Andy, really it just comes down to timing. whether or not a company is hiring or not. Pretty much all your big name companies are gonna be the hardest to get on with. For someone like you just starting out,not much or no experience, try the smaller companies, your mom and pop companies. Do that till you get some good experience under your belt. I have been working land and offshore drilling rigs for 7 years now, that's how I started out. I am currently working for vantage drilling company, they are based out of Singapore. we are putting a brand new drillship to work here in gulf of Mexico. They aren't as big as Ensco, which i have worked for them, or Transocean, who was trying to hire me but I decided to work for vantage instead. A good work ethic is key, and dependability. The thing that I have seen the most though, is the kids that are starting out. Its hit or miss. Just have a good head on your shoulders, take criticism positive and negative, and have a good time while you are working.

Andy Trahan | Oct. 17, 2011
What qualifications do I need to just start at the beginning level of the oil & gas industry? And also is there an age requirement? any information would be helpful thanks-

Glenn Parry | Oct. 17, 2011
I think our industry and its leaders are not doing enough to get this message to the country, to Washington DC and to Obama in particular. Where is the Society of Petroleum Engineers, the American Petroleum Institute and Society of Petroleum Geologists? We need to be expounding these statistics loudly and often. Not just when an opportunity arises, but creating opportunities when none exist!

Gary Olinghouse | Oct. 14, 2011
Hooray, they hit big oil on our minerals in Pawnee Co. Oklahoma!


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