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Battered US Oil Firms Scramble to Delay Looming Retirement Wave

by Reuters
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Edward McAllister
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Thursday, May 14, 2015
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Battered US Oil Firms Scramble to Delay Looming Retirement Wave
The Baby Boomer generation that formed the backbone of the US oil workforce mulls retirement as energy firms cut spending and shelve projects.

Reuters

NEW YORK, May 14 (Reuters) - After 20 years in the oil business, Craig Reed, 62, is thinking about winding down his career just as a second downturn in six years rocks the industry.

Reed is part of the baby boomer generation that forms the backbone of the U.S. oil workforce and now weighs retirement as energy firms cut spending and shelve projects. That is a worrying prospect for company executives keen to keep their most experienced workers while they ride out the oil market slump.

"Between the politics and uncertainty and cost cutting, a lot of people of my age are saying that it isn't worth it anymore," says Reed who draws up engineering and construction contracts for major energy projects worldwide.

"Many of us could handle the downturn in 2008, but when the volatility comes back so quickly, and in a different form, it is difficult to take."

For him, it is maybe two more projects and then retirement beckons, with a holiday home in Maine that needs work.

The oil industry has been aware for years of a looming exodus of oil workers who joined in the 1970s in a so-called Great Crew Change.

But a sharp drop in oil prices from June to January that triggered spending cuts and limited opportunities for senior technical staff, threatens to speed up their departures.


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WHAT DO YOU THINK?


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.

Brandon Howell  |  May 18, 2015
From what I can tell, companies in all industries do not see the value in hiring newly graduated engineers. Most recruiters see lack of time spent in industry as a disadvantage. I think that it can work to be a great advantage if the company picks candidates that are competent and ready to learn industry trades from seasoned employees while applying new ideas learned in college to help grow the success of these trades. The advantage is, new employees with little to no work experience have no bad habits yet and it is easier to graft experience and skill sets from seasoned employees onto new graduates than it is for anyone else. Being a newly graduated engineer myself, I noticed that companies are not looking to invest in training a new engineer but to hire one with previous work experience. Short term, this looks better financially. However, companies stand to gain more by hiring new graduates and having a training program that seasoned employees can teach the skills needed to be successful. Otherwise, those skills retire with them.
Angry 38 year old  |  May 18, 2015
As a 13 year professional, I came in on the gas boom and watched it fall apart. Rode the tight oil boom until last year happened. I am still struggling to see when this great crew change is going to begin. Maybe the industry wouldnt be in the shape it is in if the so called experts hadnt spent like drunken sailors. I bet anyone on here complaining about people of my age group could have been or was my mentor when I started. I didnt see anyone in my upper management ever put the brakes on spending. There were many who took junkets and didnt even come to work some day. Who was stuck doing the work? We were. While you were out with the grandkids enjoying your 12 weeks of vacation, or going to some conference that had little or no value other than a party (OTC?, DUG, ATCE, etc) we little midlevel dwarfs had to clean up the mess. So please spare us the whining and get on with your retirement so we can attempt to fix this for our generation. Yes Im tired of hearing this baby boomer whining about Gen X and Gen Y and whatever you want to label us.
Mr. Bill  |  May 15, 2015
Oh well.. Ive been in equipment side of this business since 1970 and Ive seen my share of ups and downs; all have been stressful. As I get older they are more stressful as I trying to load up my 401K and savings so I can enjoy retirement, not just survive it. With our new crop of Ivy League MBAs and their know it all attitudes it just make worse. They strip the companies of experienced personnel to reduce their overhead and get the stock prices up so they get their bonuses and then leave the companies to rot. Then one of the big guys jump in and pick it up for a song and a dance, then strip it further. One day they wake up and cant figure why theyve lost market share and why customer desert them.
Bucky Hearon  |  May 15, 2015
I am another 40 year veteran that was put down by a pipeline company. Part of my job was training the new generation, which I like to do. But the 20 year olds today are different. All they want is promotions without the work. I had guys that had no idea of operating that are now supervisors. Social promotions I call them. I am afraid that the slew of pipeline and related mishaps are going to increase because of this. Then the Old guys will be coming back as consultants at 4X the money.
Ron Craik  |  May 15, 2015
I started in the oilfield service sector in 1974 working as a rig hand for Precision Drilling Rig #2. Paid for my university and have spent all my working life thinking and working 24/7 on different problems in oil and gas. I have several patents and patent pend. in the oil and gas industry. Guys comment had to be one of the best ideas I have seen for the oil patch in the last 20 years! Being a Canadian You wouldnt have to pay me, but if you had a large double double from Tim Hortons coffee shop I would be there every morning - early, on time, no smart phone games or texting! Ron Craik, Calgary, Alberta
M.A. Steiner  |  May 15, 2015
The article is correct in that field personnel are the first to go. After s 25-year hiatus I returned to the field as a logging geologist. I was at it for sixteen months before my release in March. Wall Street investors (gamblers) are calling the shots as to who stays or goes, since when their: investments are withdrawn from service companies due to a lower commodity price, the cash needed for the industry to move forward in a lower oil-priced environment is lost. What I have seen over 36 years of intermittent employment is that loyalty to the petroleum industry begins and ands at an investors bottom lime - all else, including the invaluable experience discussed in the article, be damned.
Tim Pegler  |  May 15, 2015
With the recent downturn so many people with a vast amount of experience who have found themselves seeking employment are being overlooked for young college grads. While I agree these new recruits need a job, a mentoring program should be implemented which transfers the skills of the seasoned pros to these new recruits. The oil and gas industry complains they cannot find good help, but the HR recruiters do not seem recognize the skill sets which are going to be lost due to their keyword search criteria. Companies need to think outside the box and capitalize on the skillsets of the industry pros to train these young recruits, especially during these downturns where many pros will walk away, never to return.
Ken Hardy  |  May 15, 2015
The article is very true and factual, so close it applies to me age 62 North sea and the World for 40 years,but unfortunatly the bean counters have to justify the Books to the Board,do they sell a Drill Ship ,no do they sell a Oil Field no,people are cheap and whatever you believe can be replaced ,I see it in Korea Exxon have more Graduates on a Construction site using phrase like why do we need a permit ,its scary believe me.
Geoffrey Hoffman  |  May 14, 2015
Why not just give those of us with transferable skills in related areas - mine are environmental design, architecture, project management, etc., - from the building trades side of the economy & let us mentor the younger generation coming up? Theres still a place for instituting a work ethic, plus a customer-oriented service-provider outlook, and a holistic approach to integrating education disciplines into the office/jobsite. I myself worked my way through architecture school every summer on a construction site, and to this day, keep up the physical activity to stay sharp. So, all you corporate types, take notice of what brain drain might be disappearing - its the very foundation of your industry....
Peter Wang  |  May 14, 2015
The oilfield services firms are only too happy to take their over-50 employees out in back and pop them behind the ear with a .22 Long Rifle.
Guy  |  May 14, 2015
I have been working in and around the oilpatch since 1977. I have seen so much talent and smarts and expertise walk out the door when folks retire it would roll your socks down. Why doesnt one of the mammoth companies provide a room with tables and a coffee maker, open at 7am [these folks arise early now] and let any and all retired folks from every dept come there daily - like so many groups of folks I see around 10am in McDonalds and Whataburger; but hire them at $100/month or whatever. Give them dry erase boards and a problem; or tell them do you know a problem that no one has noticed; tell them to think both in and outside the box and come up with solutions; write them all down; and, optionally, file Provisional Patent Applications on all the ideas. Give the folks a bonus or % or stock if a patent issues. Otherwise, all their knowledge and experience is buried with them. I will bet that I could gather 10 people from top to bottom in a company - janitors to assistants to managers to VPs,who have recently retired and they would come up with minimum five patentable ideas that might be of value to the company that valued each of them so much for so many decades. Guy McClung, San Antonio

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