Oil Has a Millennial Problem

Oil Has a Millennial Problem
Oil companies have a problem, and his name is Robert Paver.

(Bloomberg) -- Oil companies have a problem, and his name is Robert Paver.

This 22-year-old graduate, along with his fellow students of earth sciences at the University of Oxford, should be natural recruits for an industry that has a long and lucrative history in the U.K. But instead of contemplating a career at an offshore driller, he’s planning to become a management consultant.

Out of Paver’s cohort of 28 students, only one is going into the oil and gas industry.

“Twenty or thirty years ago, oil was definitely very popular for students, but there seem to be a lot fewer people going into it these days,” Paver said in a phone interview. “A lot of alumni went into BP and Shell in the past, more than currently.”

For decades, science and engineering graduates have followed a well-worn path from top U.K. universities into the oil and gas industry, supplying the skilled workforce that’s needed to discover and develop resources all over the world. In recent years, the flow of talent has slowed to a trickle, raising fundamental questions for an industry that remains a vital cog in the global economy.

The decline began in earnest after 2014, when the price of oil went into freefall and the petroleum industry hemorrhaged jobs. Companies slashed graduate recruitment, with the number of hires halving in two years.

Yet that’s not the whole story. Crude prices have recovered and the industry has found its feet again, but the number of British graduates going into the sector has continued falling to the lowest since records began in 2012. There are growing signs that the once-desirable industry isn’t the employer it used to be.

Future Fears

“People are worried that there aren’t going to be as many jobs in the future, especially geology-related jobs because of a movement away from fossil fuels,” Paver said. “With oil companies making fewer discoveries and not wanting to invest as much in exploration, they’re worried in the future it’s maybe not going to be viable.”

The industry is facing recruitment challenges all over the world. In a survey of more than 33,000 people working in oil and gas conducted by oilandgasjobsearch.com and NES Global Talent, almost 90% said skills shortages were damaging productivity, with gaps widening in every sector of the industry.

To combat this, companies are going further than a high starting salary to attract graduates. Some are grooming talented students before they even finish their degrees. BP offers 3000 pound a year ($3,600) scholarships to science, technology, engineering and mathematics students at Oxford, with the recipients being “fast-tracked” to a job interview at the end of their studies, according to the university’s website.

These incentives aren’t always enough to attract the best talent. Big Oil’s association with climate change and environmental damage is affecting graduate recruitment, said Lucy Williams, geoscience manager for Rockhopper Exploration Plc and chair of the U.K. Geological Society’s Petroleum Group.

Turning Away

“University petroleum courses are being asked to take petroleum out of their name, because people think petroleum is the devil,” Williams said in an interview. “I suspect some people who start on it in their education and then get turned away from it.”

According to data compiled by the Higher Education Statistics Agency the number of graduates going into oil and gas exploration in 2017 was at its lowest since records began in 2012, having fallen by 61% in four years. Trendence U.K., a market research firm, found that 91% of surveyed students cared about working for an ethical company, and 67% considered doing a job that contributed to climate change to be unethical.

“Environmental concerns are the overriding driver putting people off going into the energy industry,” said Mads Huuse, professor of geophysics at the University of Manchester. “A lot geoscience students in the U.K. don’t work in the industry, they work in insurance companies and banks.”

To tackle their recruitment problem, some oil companies have tried to add a youthful sheen to their public image. One example is Connor Tann, a petrophysicist and “data revolutionary” at BP. He stars in the company’s promotional material as a fresh face to demonstrate that it thinks about its future.

At 26 years old, he’s young for the industry, which has an average age of 42.2 according to a report by Oil and Gas U.K., a trade association. As part of the BP’s mentoring program, he gets access to the company’s top executives, including upstream chief Bernard Looney, who hopes to learn how to keep recent graduates from turning instead to cooler startups or tech giants such as Facebook Inc.

With the generous salary and benefits the oil giant can offer, BP should have reason to be confident of retaining his services for a long time. But Looney said earlier this year that he fears the company may lose people like Tann if it can’t find a way to make them enthusiastic about the careers it offers.

“What we’re hearing from young applicants is that they want to be part of the energy transition and to make a difference in working on solutions to the challenges that the world faces,” said a BP spokeswoman. The company isn’t finding it difficult to attract graduate or intern applications, she said.

Oil companies’ recruitment challenges could deepen as the industry returns to financial health after the price slump. Recruitment will start to ramp up and graduates may not fill the gap left by years of job cuts and spending restraint.

“Since the last crash, most of the older people thought ‘Bugger it, I’ll go and play golf and take my retirement package’,” said John Howell, professor in geosciences at the University of Aberdeen. “That creates a vacuum at the bottom. Companies will try to recruit, and I’m not convinced they are going to be able to fill that niche.”

To contact the reporter on this story:
Eddie Spence in London at espence11@bloomberg.net

To contact the editors responsible for this story:
James Herron at jherron9@bloomberg.net
Stephen Voss


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.

Steve Archer  |  August 06, 2019
After reading the posts: An addendum to my original post (scroll to the bottom of the page). Try taking their IT devices away and make them focus on their job, and only their job, for the standard 8 hours. Forget the fact we are paying for work; it is a steel fab shop with overhead cranes 3/4" capacity plate roller, plasma, welders and all sorts of tools that will hurt you in a heartbeat. If they don't go instantly catatonic, you will have to hawk watch them, because as soon as "daddy"or mommy" is elsewhere they're back to their pacifiers. My business partner and I have both had to mid-shift fire people on the shop floor after giving them absolute direct warning to cease and desist.
Billy Bob  |  August 06, 2019
Only generational complaints in the comments. The problem is the industry doesn't pay well anymore. Now as a software engineer you can make the same if not more, with more work flexibility. Simple.
Dr Dave Richers  |  August 05, 2019
I had to adapt to ever changing demands. First uranium, then oil, environmental, again oil, then mining, and finally back to oil. Not to worry. The free market supply/demand will handle it.
Julius Benitz  |  August 05, 2019
Can't get the new faces interested and they can't hurry fast enough to get rid of the old. Not all of us want to go play golf.
Mel  |  August 05, 2019
3600 a year is a joke. That is nothing to a big o&g company and half a semesters tuition. Gap is bc instead of being able to work your way up you have to have a degree not actual knowledge and experience
Paul  |  August 04, 2019
Heck with the millennials. Hire back some of us experienced hands. We'd be glad to do it for the same price or less than the millennials and you'll get a better job done, with no one wanting to leave after 6 months due to social pressure.
KC Liljequist  |  August 04, 2019
I couldn't agree more with the post's above...it all started when petroleum engineers started running the show with zero field experience and never worked their way up.
Lyle Summerfield  |  August 04, 2019
Sounds like we have a generation of, not all, but no one wants to get their hands dirty! Some DON'T want to work, and when they get hired, they DON'T show up to work! It's like this in Michigan. I have been to job fairs where I ask how it's going, same answer, can't get workers!
The Original Oil Whore  |  August 03, 2019
Oil companies and those who service it across the world drop-kicked more than 4.2 million people from the payroll starting around 2008. And then more starting in 2014 and it kept bleeding. Those who had no choice but to keep plugging away at it worked in overloaded, miserable conditions for FAR LESS money and MUCH MUCH SHORTER job durations. Price recovery? You call $50 or $60 per barrel a recovery? And with a short burst of first-wave LNG export work in the USA, using engineering design done in India and China "high value center" sweatshops for pennies, imported equipment... oil industry employees have once again gotten screwed over. And when we go to an interview, some 22 year old is criticizing us for having short employment durations at many companies and constantly being laid off or shopped? Millenials, you're smart to stay away from this that we regret every single day in our 50's.
Kimk  |  August 03, 2019
I worked as a geologist for years. In a recession where commodity prices are low, the geologists are the first ones to receive layoff notices. In one of the companies that I worked for, 8 out of 13 geologists were let go in one unit in 2014. Fortunately there is plenty of work in HES for geologists in oil companies
cowboybob  |  August 03, 2019
A better title for the article would be "Millennials have an Oil Problem"...the brainwashing in certain cultures and parts of the world is almost complete. My son is technically a millennial...although by birth-date only...is a successful PETROLEUM engineer and very happy in his profession. The university he graduated from still proudly offers a PETROLEUM engineering degree...there has been no decrease in applicants or graduates. This sounds like a Euro-thing to me with all the hoopla about carbon footprint, global warming/climate change (a characteristic of climate is that it is always changing) or whatever the latest junk-science du jour may be. This will all come home to roost someday when the parts of the world that have sold their souls to "renewable" energy wake up one winter day to a cold/dark house and are baffled by the occurrence.
Charlie  |  August 03, 2019
Unfortunately in our desire to give our children the best of everything we forgot to create a WORK ETHIC. Snow flakes have become so consistent that we scramble to hire personnel that can and WILL work. I can only hope that when you come across good employees we start treating them as an asset. The O&G is like the ocean, it gives but when it takes it takes everything. Let's remember that when we get a chance to hire good employees. Those same employees will either make us or break us and I don't have time for more snow flakes on my crew.
Bill Flaherty  |  August 03, 2019
1 billion cars, SUVs and pick ups 300 million heavy trucks and countless tractors and heavy equipment says the 22 year old boy is wrong.
Patrick  |  August 03, 2019
Recruiting, but you still have to keep your staff. agree with everything written above. ends the adventure, deletaire atmosphere, cheating at all levels and especially on safety. I strongly advise against all students going into this industry. As things are going, the worst is yet to come. Sincerely to all. Patrick. (Ex Well Services)
Luis Tovar  |  August 03, 2019
...actually not a bad article... Anecdote to explain: In the 1970's I went to best university in the US of A - The University of Life. I learned some of the higher teachings of the times and at the very top was the Armchair Quarterback position on how to make Roger Staubach and Terry Bradshaw much better Field Marshalls...next in line was how to get paid for doing that job. Comforting to know that there will be few Millennials attempting the same feat on their MacBook/Air from the safety of their basements in PJ's...
Gage Hamel  |  August 03, 2019
I am 27 years old and am currently a welder in the oil field. I graduated in 2016 from the University of Colorado with a geology degree. I badly wanted to work in oil and gas but could not for the life of me find a job at that time making more than $15/hr. I worked several construction jobs and finally got into oil as a welder and the money is great for everyone. The communities in the oil field have TONS of job opportunities. I would still like to pursue a career in the geologic/engineering side of oil and gas and am working towards that. These millenials wouldn't know a good opportunity if one jumped up and bit them.
Taylor  |  August 02, 2019
Plenty of students in the US (and around the world) are going into engineering and geology with the intent to work in the industry. This article is simply inaccurate.
20 plus experience Petroleum Engineer  |  August 02, 2019
Big E&P and O&G companies choose young leaders in the last 10 years and they have destroyed the oil industry telling fresh-out engineers, that they can be managers in 3-5 years. In the past, to become a manager used to take 15-20 years but now big corporations seek graduated engineers to make them leaders without experience and most of them behave in an unscrupulous way. Same problems with young recruiters and Human Resources people who do not have any idea of the industry a shortlist personnel discriminating experienced engineers because of their age. Sad but real.
Stephen T Harris  |  August 02, 2019
I think one of the most important considerations as to hiring of millennials is drug testing. Here in California...Once legalization of weed came in it has ruined our employment options. Not so much the same in Texas as there are still a lot of young folks of any background that don't mind the hard work and can pass drug tests. I am not just another old oilman bemoaning the youngins but a fellow who survived two blowouts. Reaction times in the Patch are in micro-seconds and if you are under the influence, you will get killed and most likely cause the death of your crew members.
Jane Moughon  |  August 02, 2019
It's not just the Oil industry that has a Millennial problem. I've got a new training "Train to Retain Millennials" This is the GREAT CREW CHANGE of the O&G industry predicted in 2014.
WorldCommenter  |  August 02, 2019
The oil and gas industries have done a very poor job in showing that their resources they provide are used for many more things then combustion for energy. The general public has no idea of the need for natural gas to make ammonia fertilizers. The need for oil to make some critical lubricants. The use of oil and gas based products in agriculture, medicine, pharmaceuticals, clothing, automobile / transportation interiors and exteriors, concrete, steel, glass and many other everyday thing they take for granted.
Bob  |  August 02, 2019
Been in oil and gas industry 30 years.. Companies use to treat us great. Some had retirement. Since about 15 yrs ago companies suck! Field personel treated like crap. All started when Engineers started running companies. Use to be people whom started as roustabouts and worked there way up. Office, college Pukes with no field experience have ruined the industry for field people and i would not recommend the industry to a single person. No steady growth. Boom then bust. Treat field people like crap now. The industry wonders why no one wants to be involved in it for there careers.
MARTIN BELANGER  |  August 02, 2019
a 22 year-old management consultant. Now that's funny. What past experience will he base his advise on? Schools are failing the kids if this is the career path they are choosing.
Steve Archer  |  August 02, 2019
Society as a whole has a millennial problem. What they seem to want is a Sugar Plum Fairy. We do steel fabrication and share a large former O&G service equipment manufacturer's industrial space with a custom furniture maker, an architectural specialty fabricator, and a custom glass maker. All of us have the same problem: finding good talented technician workers who will be there day-in and day-out staying with us longer than the next Fall breeze.

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