Jobless Recovery Looms For White-Collar US Oil Workers
By the end of July, the U.S. energy industry cut nearly 95,000 jobs compared with just under 70,000 a year earlier, according to staffing firm Challenger, Gray & Christmas Inc.
One reason companies are wary of hiring again is the financial hangover after the shale drilling boom. It nearly doubled U.S. oil output in five years, but left many producers with hefty debt payments that current oil prices barely cover.
Tumbling oil prices also forced companies to get leaner quickly by making greater use of data and computer models, upgrading the techniques and streamlining operations.
Drilling and fracking a new well used to take more than a month; in some cases it now takes half that time, or less, which means fewer drilling crews and specialists.
"There are many people who will never come back to the oil industry," said Gladney Darroh, head of energy recruiting firm Piper-Morgan Associates. He said this latest downturn was the worst he had seen in 40 years.
While many blue-collar workers have already found jobs in construction and other industries, the future looks bleaker for petroleum engineers, geologists and other specialists whose skills do not transfer so easily.
"If you're a petroleum geologist, you don't become a loan executive," says Mike Kahn, a recruiter at Lucas Group in Houston.
Hanging On
Tara Sinclair, senior economic fellow for global jobs site Indeed, says that while search patterns show blue-collar energy workers starting to look for jobs elsewhere after six months, specialists tend to wait longer.
They do not want years of training and experience to go to waste and many have the savings to be patient.
The bad news is that whereas there has been an uptick in blue-collar job postings in the past five months, Indeed figures show that listings of white-collar energy jobs keep falling.
Many analysts expect companies to hold off with large-scale hiring until oil prices eclipse $60 a barrel, despite industry concerns that the retiring baby boomer generation will leave a skills gap that may hurt future growth.
Today, companies can raise production by re-deploying idled rigs and completing unfinished wells, but recruiters warn later on they may struggle to find specialists they will need to find new deposits and further boost productivity.
"If in two years you need a reservoir engineer with experience, where are you going to find that person? It'll be very difficult," said Darroh, the recruiter.
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